Accepting payments online can be challenging and expensive. Payment gateways such as PayPal and 2Checkout.com are two great options. This article will review the pros and cons of PayPal vs. 2Checkout.com and let you know how they compare.

When it comes to selling products and services online, you need a reliable method of payment online. But merchant accounts can be expensive – both to set up and to maintain. However, there are plenty of online alternatives to merchant accounts.  There are plenty of ways to help your customers make payments without setting up actual merchant accounts.

Two of the options are PayPal and 2Checkout.com. Both actually incorporate different ways of selling products and services. Depending on your needs, one might work better than the other. Or you could use both – even 2Checkout.com accepts PayPal as a form of payment.

PayPal

PayPal originally began as an escrow-like way to pay for goods bought on eBay. In the young world of online shopping, buyers were wary of giving out personal information to strangers. So PayPal was used. Buyers gave their personal payment information to a trusted third party, which could then pay sellers – without sellers gaining access. Plus, once an online shopper had a PayPal account, he or she could easily pay for products and services anywhere that PayPal was accepted.

PayPal has expanded beyond just eBay; many businesses now accept PayPal. PayPal charges transaction fees, and has two levels of account. There is a regular account and a merchant account. The merchant account allows businesses to accept credit cards – and is actually less expensive than more traditional merchant accounts. There are no fees to set up a PayPal account, and most of the transaction fees are reasonable.

PayPal also offers a range of business features. It is possible to invoice customers and print out monthly statements. You can also transfer money between accounts using PayPal.

2Checkout.com

2Checkout.com is more than just a payment processor. In fact this company is actually a reseller. You sign up for an account, and 2Checkout immediately resells your products and services. 2Checkout.com lets you know of orders, and you fulfill them. Tracking is available, so you can easily keep track of what has been sold through 2Checkout.com

2Checkout.com does charge a one-time setup fee. You have to pay to get everything set up, and then after that, you pay only transaction and commission fees. For example, if something of yours is sold through 2Checkout.com, the company takes a percentage plus a small transaction fee. There are not any other monthly fees or gateway fees, and if you don’t sell anything through 2Checkout.com, you do not pay anything beyond the initial setup fee.

Customers have a range of options when they make payments: credit or debit card, as well as PayPal and Pay Later. This allows customers to choose what method of payment they prefer.

2Checkout.com and PayPal

With 2Checkout.com, you are actually authorizing a reseller to sell your goods and services. With PayPal, you are in charge of selling. For some, having 2Checkout works well because it fast and easy, and it has a shopping cart function that can help you as well. PayPal, though, can be less expensive in some cases, since it does not charge commission; you just pay your transaction fees.

Depending on what you want to accomplish, and what your needs are, you might choose one or the other – or both. In the end, you need to evaluate what would be most beneficial to your customers and do what makes things easier for people to buy your products and services online.

MERCHANT ACCOUNT GLOSSARY TERMS