PayPal comparison: Which PayPal service is for you?

PayPal is not my favorite processor—Stripe is. However, that doesn’t mean that excluding PayPal from your eCommerce site’s payment methods is the best choice for you.

 

While PayPal may not always be the most merchant friendly payment processor available (read this from Chris Lema for an idea), customers trust PayPal
and many merchants see an increase in their bottom line by using PayPal
on their site. Nielsen Online Buyer Insights reports that PayPal Merchants
benefit from a 27 percent increase in total customers after integrating
PayPal, while total amount spent by customers increases 15 percent and
transactions per customer almost double.

 

That kind of trust and those increases are significant enough that
you should be testing PayPal in your store’s checkout to see if you can
duplicate these results yourself. Customers don’t even need a PayPal account
to pay via PayPal—they can use their bank account or credit card to
complete checkout, but can use their PayPal balance with an account.

 

While PayPal Pro requires an SSL certificate while other methods may
not, I’m not going to include this in our comparison. If you run an
eCommerce site, you should be using an SSL certificate no matter what.
Aside from protecting payment information, they protect the login
information for you and your customers from being sent in plain text to
your server, and they usually increase conversions due to increased
trust. You’ll also get an SEO bump for having one.

 

Our PayPal comparison is meant to help you decide
which PayPal service is right for your WordPress eCommerce store. We’ll
describe what each PayPal service can do and the associated fees (in
USD), then we have a list of which PayPal add-ons are available for each eCommerce plugin so you can get started!

 

PayPal Standard
is one of the most popular gateways for merchants, as there are no
setup fees, termination fees, or merchant accounts needed to get set up –
all you need is a PayPal Business account. PayPal Standard is available in 190 countries, so almost any merchant can use it.

 

Transactions via PayPal Standard are processed on PayPal’s site (not
your own), and will allow customers to pay with a PayPal balance or
credit card. They’ll be sent to PayPal from your checkout screen, and
you’ll be charged the standard transaction fee for these payments, which
is 2.9 percent + 30¢ per transaction. Customers are then directed back
to your site after completing the PayPal checkout. PayPal also offers volume discounts if you process more than $3,000 in transactions with PayPal monthly.

 

Since checkout is completed on PayPal’s site, you have to rely on
PayPal send payment success and failure notifications back to your store
for completed orders using something called an Instant Payment Notification (IPN).
Using the PayPal IPN can occasionally be unreliable, which can
sometimes result in the orders not being completed correctly on your
store, which is one of the downsides to PayPal Standard.

 

PayPal Express
is available in the same countries as PayPal Standard, and you’ll be
charged the same 2.9 percent + 30¢ per transaction with no setup or
termination fees. PayPal Express is very similar to PayPal Standard with
one major difference: the checkout flow.

 

PayPal Express avoids the IPN issues that arise with PayPal Standard.
Customers will be directed to PayPal from your site, but they don’t
complete checkout at PayPal. Instead, customers approve a purchase at
PayPal, then they’re directed back to your site with a token (this token is passed to your site behind-the-scenes).

 

The token can be used by your site to submit a final payment to
PayPal. When a customer clicks to finish placing the order on your site
after being directed back, this finalizes the order and sends that token
back to PayPal with the final order details.

 

This is a more reliable payment method than PayPal Standard, as the
checkout is completed on your site, but the payment is done on PayPal’s
servers once your token is returned to PayPal.

 

There are no startup or termination fees with PayPal Pro, but there is a $30 monthly fee
along with a per-transaction fee of 2.9 percent + 30¢ (volume discounts
are still available). PayPal Pro also includes the PayPal Virtual
Terminal to allow you to accept payments over the phone, the ability to
accept bank transfers and in-person payment, as well as online
invoicing.

The biggest difference (and benefit!) to using PayPal Pro is that you can customize the entire checkout experience,
as customers remain on your site during the checkout process rather
than being directed to PayPal to complete checkout or approve payments.

PayPal Pro is available to merchants in the U.K., U.S., and Canada. PayPal also has a comparison available between PayPal Standard and PayPal Pro.

 

PayPal Advanced
is available for merchants in the US and Canada only this time.
Advanced includes online payments and invoicing for merchants along with
a checkout directly on your site like PayPal Pro.

 

There are no setup or termination fees, but PayPal Advanced requires a $5 monthly fee
along with fees of 2.9 percent + 30¢ per transaction. The difference
between PayPal Advanced and PayPal Pro is that the checkout form is on
your site and embedded in your checkout process, but is not something
that you can customize entirely.

 

The PayPal Advanced checkout form is an iframed form, which
means that the form is actually hosted on PayPal’s servers and embedded
on your checkout page. From the customers point of view, they remain on
your site and in your checkout flow for purchasing, but the payment form
is actually hosted by PayPal and payment information is sent directly
to their servers.

 

One of the less popular gateway options offered by PayPal is the Digital Goods
gateway. This gateway can only be used for digital goods, but offers a
really awesome benefit: customers can check out with two-clicks using
PayPal Digital Goods.

 

This gateway can be embedded in an app, game, website, or other
digital content to offer a quick, high-converting checkout. The checkout
process is seamless and can be completed from within your digital
content easily, as shipping information is not needed.

 

PayPal Digital Goods charges only per-transaction fees of 2.9 percent
+ 30¢ or 5.0 percent + 0.5¢ (whichever is lower) to better support
micropayments (payments usually lower than $10 to $12). This can be
really handy if you sell music or other goods on your website that will
either be all-digital or priced at less than $10 so that you can get the
lowest fees possible.

 

The WooCommerce PayPal comparison
has a list of accepted countries for Digital Goods, including the U.S.,
Canada, Australia, New Zealand, China, the U.K., and others, and PayPal
has an FAQ available for the Digital Goods gateway.

 

So which platforms have PayPal add-ons available? Here’s our chart
that provides details on which WordPress eCommerce plugins support which
PayPal services. All eCommerce plugins include PayPal Standard in the core plugin.