If you'd like to sell online without having to obtain your own merchant account, using a payment processing service like Google Checkout or PayPal can be a lifesaver. Both services allow you to accept credit card payments over the Internet for products, services and subscriptions that you sell. They both process the payments, taking a percentage from each sale. But that's where the similarities end.
As of September 2009, sellers who want to use Google Checkout must be based in the United States or the United Kingdom. It may become to other countries in the future. PayPal merchants can be in the United States, Australia, Canada, France, Germany and several other countries. PayPal is available in 190 countries, with specific guidelines for each one.
Google Checkout permits you to sell products, services and subscriptions. You can also accept donations if your company is registered as a 501(c)3 tax-exempt organization. With PayPal you can do all of the above, with two additions. Donations can be accepted through your PayPal account even if you don't have a tax-exempt organization. Plus PayPal has person-to-person payments, allowing you to receive payments, even if there are no transactions. For example, if you'd like to send money to a friend, you can do it with PayPal.
No matter which service you use, you'll have to pay a percentage for each transaction. Google Checkout bases that fee on the amount of sales you generated the previous month. For instance, if your sales totaled less than $3,000 in May, you'd pay 2.9 percent plus 30 percent for each transaction in June. The larger the monthly dollar amount, the lower percentage you'll pay. As of September 2009, PayPal also charges 2.9 percent plus 30 percent per transaction.
Shopping Cart Integration
Whether you're selling a single item or a selection, both Google Checkout and PayPal provide order buttons and shopping carts that you can add to your website. When a customer decides he's ready to make a purchase, he clicks on your order button and enter his address and credit card information. Both services provide this order mechanism. You don't collect the credit card information in either case. This typically makes customers feel comfortable about buying from you.
Obviously you'll want to receive your money once a transaction is complete. That's where payout comes into play. If you've been with Google Checkout longer than two months, it generally transfers the money to your bank account two days after the transaction is complete. It may take up to an additional three days for you to actually receive the money. However, new merchants must initially wait 10 days before payout is initiated. After a 60-day probationary period, Google Checkout will analyze your account to determine your new payout schedule. With PayPal you can transfer money to your bank account whenever it's available. If you prefer, you can pay $1.50 and have a check sent to you. Or you can apply for a PayPal MasterCard debit card so that you can withdraw the money from any ATM.
- Photo Credit TPopova, iStockphoto.com
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