PayPal vs Bank Online Payment Gateway


As the Christmas selling season approaches I face the decision with which I’ve been battling for a long while now.

Two years ago newroomsonline was fortunate enough to be asked to be a case study for a Masters project being carried out by Manchester Metrolpolitan University’s Business School. Students from all over the country, and largely from highly respected retail chains, were asked to study and assess our website with a view to providing 5 calls to action.

It was beyond enlightening. In some respects it was terrifying to see how humungous businesses conduct their business, with teams of people to facilitate each step of the process, versus just me….and John the Warehouse.

Many of the calls to action initially required a substantial cash injection to be carried out…….until I mooted that this was not an option…..when they did an amazing about-face and provided me with 5 calls to action which required no cash injection whatsoever. After half a day my brain was fried!

The one major action that I implemented immediately was to take PayPal. Up to that point we had never offered PayPal as a payment option, using only our HSBC payment gateway.

The result is a resounding swing towards PayPal payments. So much so that I’ve just been looking through all purchases made in the last month to find that 99% of our customers opted for PayPal at the checkout.

So it puts me in the position of questioning why we should have the HSBC gateway at all.

Reading up online there are many who are highly critical of PayPal, citing their ability to let you take money but not withdraw it as readily as a real bone of contention. Fortunately we don’t have that problem and have had nothing but good experiences from the process…..fingers crossed.

There’s also the credibility issue. While I use PayPal both personally and professionally, I know of many who are still very suspicious. There again we have the odd call every now and then asking how a customer should pay if they have neither a PayPal nor an HSBC account, unaware that it’s irrelevant as both accept cards from nigh on every major card provider out there.

When the profits from your total monthly sales using one payment gateway fail to even pay for that service, you have to ask the point in offering that service any more.

As a consequence my only real reason for our keeping the gateway is to lend credibility and reassurance. I actually don’t see that we’re getting anything else out of it.

I can see the point if you have a physical shop, are out and about doing fairs and shows and need a PDQ machine but for me as an online only retailer with very little external selling, I’m rapidly viewing my bank statements and seeing nothing but a financial drain.



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