Shouldn’t I Just Use PayPal For My E-Commerce Payment Processing?
FastSpring InfoLately a few prospective clients have asked us to explain the benefits of using FastSpring over PayPal. We posted not too long ago on “What Makes FastSpring Different From Cheaper, More General E-Commerce Services?”, but let’s look at the PayPal question specifically. This time around, rather than my focusing on the benefits of FastSpring, I thought I’d ask a few software vendors who had previously used PayPal for their payment processing to list any issues or limitations they experienced when using PayPal for their e-commerce. The following outlines some of the issues that they experienced.
“PayPal’s reporting is extremely limited.”
“Virtually impossible to use for serious businesses without extensive external code or a system to manage customer flow/cross/upsells.”
“You spend too much precious time on e-commerce tasks and way too little time on marketing and dev.”
“For business-to-business products, clients do not take you seriously as a potential supplier if PayPal is your main payment method.”
“No branding on PayPal order pages means fewer purchases! My order page needs to blend in with the rest of my site or too many people will bail on us”
“No fulfillment support”
“Revenue is lost because a decent number of customers are located in countries PayPal won’t accept payments within for whatever reason.”
“Tax responsibilities are on the client, ugh.”
“Huge problems with spam filters on PayPal — we automatically send out logins once an order is processed yet a higher percentage is not received than is received.”
“They have virtually no fraud screening.”
“(PayPal is) more difficult to set up - documentation spread all over the place, and forum answers sometimes misleading”
“There is no support for discount codes/vouchers (this really surprised me)”
“No experience with (PayPal) customer service yet- but I’ve heard bad things”
“Their system is very clunky, as far as looking up orders, pulling reports, checking a history etc…”
“PayPal heavily favors the purchaser not the vendor selling, as in chargebacks or disputes etc.”
“I don’t get notification of orders on a consistent basis, I have to login and check orders daily”
“We sell off multiple sites with the same PayPal account and the reporting to figure out which sites generated which sales is a nightmare”
“Lacks professionalism”
“Their UI stinks, it takes me a while to figure out how to do things in their system”
“I have heard too much about PayPal’s abuses to trust them. When I see something where the only payment option is PayPal, I select a different option: not buying.”
“No ability to offer upsells (at least that I can figure out)”
FastSpring addresses most every issue described above. PayPal appears at first as though it saves a little money in transaction costs, but the big question you discover is…at what cost, in terms of PayPal’s limitations as well as the opportunity cost of using a basic service. People tend to overly focus on the small % increase in fees that comes with using FastSpring over PayPal and they miss the critical figure - the percentage that utilizing a full service solution like FastSpring increases their overall revenue.
When you consider the cost on your business of PayPal’s limitations and the benefit on your business of using FastSpring’s full service features and tools to increase your overall revenue, it becomes apparent that the financial benefits of utilizing FastSpring far exceed the small difference in transaction fees between PayPal and FastSpring.
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January 9th, 2009 at 5:13 am
You don’t say how Fast-Spring solves these issues? Most of these look like “made-up” issues unless you tell us how Fast-Spring will solve them?
January 12th, 2009 at 3:10 pm
I mention that FastSpring addresses most every issue described above. These are not made-up issues, you can learn more about these problems by searching for PayPal customer problem feedback online.
To speak to a few of the specific issues we address:
- You spend too much precious time on e-commerce tasks and way too little time on marketing and dev
**With FastSpring once you’re setup you’re good to go, our full service solution enables clients to focus on building their business and leave the e-commerce to FastSpring.
- No branding on PayPal order pages means fewer purchases!
**We brand your order page.
- Tax responsibilities are on the client, ugh.
**We handle taxes for you.
- No ability to offer upsells (at least that I can figure out)
**We offer extensive cross and upselling capabilities to increase order size.
These are just a sampling. To learn more about FastSpring’s features and their respective advantages over systems like PayPal, visit these links:
Features:
http://www.fastspring.com/services.php
Advantages of using FastSpring to outsource full service e-commerce:
http://www.fastspring.com/services-why-outsource.php
- Dan
February 17th, 2009 at 11:37 pm
Hello,
Do you provide real time statistics on order pages? What I mean, if a visitor initiates a transaction, can we follow the transaction till it is completed (either till the order is placed or the visitor leaves the site).
February 18th, 2009 at 11:37 am
You can get detailed order data using our integration with Google Analytics, following visitors through to purchase.
- Dan
July 17th, 2009 at 3:11 am
“- Tax responsibilities are on the client, ugh.
**We handle taxes for you.”
This is a huge understatement of benefit to using a reseller/e-commerce service that takes care of the tax responsibilities!!
With the EU tax laws as they were put in force from July 1, 2003, which require ALL non-EU businesses to identify EU resident customers for “electronic services” and charge the VAT rate of the EU member state that the customer resides in… and then make the necessary VAT payments to the EU member states applicable (all 27 of them!!) for tax collected in the tax period.
In addition, to provide VAT compliant tax receipts, issues VAT refunds, identify and validate VAT registration numbers for B2B transactions so VAT is not charged…etc.
How more difficult could it be for small businesses to do business on the Internet?
Resellers like FastSpring who take care of this unwieldy administration nightmare allow us to get on with the business of developing and selling.
Payment providers like PayPal, Google checkout and a host of others just abrogate this responsibility to the individual business entity… “It’s not our problem”… Ughhh indeed!!!
Just the “Tax responsibility” alone is the best justification to use a reseller service in my view. FastSpring is not the only service to do this but too few provide a comprehensive professional solution that include this.
My 2 cents on why i won’t use a Payment Provider (PayPal or others) now as the direct selling interface or any other e-commerce service that won’t handle this tax nightmare for me.
August 12th, 2009 at 1:59 pm
Do you have virtual gateways? The reason why I do not use paypal because I do not want my customer to have to sign up with accounts with other companies in order to buy my services. I prefer to take a credit card type it in and get an approval. If this is something you offer please send me an email.
Thanks,
August 12th, 2009 at 8:18 pm
Hi Carlos,
We do not offer virtual gateways. And we can only sell digital products. To answer your other question, your customers would not need to sign up for their own accounts if you use FastSpring.
Dan