Overview

If you run an online search on ‘PayPal’ there are countless articles that come up about both the benefits and shortcomings of the payment processor.  Unfortunately, many of these articles are often one sided and inaccurate because they are either commissioned by Ebay (PayPal’s owning company) or written by a rival company looking to discredit PayPal.  Our goal with this article on the other hand is to be as up front an honest as possible with our comparison of PayJunction to Paypal.  We want our merchants to make the most informed and knowledgeable decision about what company they choose for their credit card processing.  In some cases they might even use both.

PayJunction vs. PayPal Round 1 – Features

PayJunction is a 3-in-1 gateway that links to a 3rd party merchant account.  The first part is a real time gateway for e commerce that offers both the quicklink shopping cart (similar to PayPal’s Standard option) and API for integration into 3rd party shopping carts and customized applications.  The second part is the virtual terminal and the third part is the mobile processing either via the Cell Charge system or Easy Swipe.  These are the three essential aspects of Trinity and are available to all users.   There are a ton of other features that make the Trinity system a best of breed product.

PayJunction currently doesn’t allow for ACH processing or gift cards but plans on implementing those features with Trinity 2.0 in the near future.

PayPal has a rather unique business model in that they offer merchant processing without being a bank.  In effect, they use their one master merchant account for all of there customers.  The merchant’s moneys actually route to a master holding account and then are divvied out according to how the merchant chooses (check, direct deposit or credit card).  This has worked out pretty well for PayPal for now (even though they have had their occasional run ins with lawsuits and consumer advocacy group critiques) as they process millions of accounts world wide.  Many merchants like going with PayPal because it is known entity that they feel their customers will be aware of and comfortable with.

PayPal’s services really depend upon the pricing plan the merchant chooses.  Unlike PayJunction, PayPal breaks this up into a number of different options as discussed in the next round.  One major service that served as the foundation for PayPal was its money transfer option.  This allows parties to transfer cash funds between PayPal accounts…something PayJunction can’t do.  They also have a donation button that is fairly rudimentary but often popular for non profits.

PayPal does not offer any mobile processing solution as of now nor does it have ACH processing.

ROUND 1 WINNER – PayJunction as it offers a simpler all in one solution that is more powerful and accessible by any type of merchant.

Round 2 – Pricing

As with any service, it is important to be fully aware of the types of packages the company sells and why the pricing is different for each. PayJunction makes this super simple for the customer by bundling everything into one all in one package that includes a merchant account and all of its services, plugins, customer support, etc.  No aspect of the service is broken up into different pricing or upgrade options.  Thus, every single customer of PayJunction is working with the same product and service.

Because PayJunction uses resellers (who have a standard breakdown for their cost), it is up to the reseller to charge the merchant as they see fit; thus why there aren’t fees listed on the corporate website.  With this type of setup, it really comes down to the merchant/reseller relationship.   This can be very beneficial to the merchant as the reseller has the flexibility to tailor the fees according to the type/size of the merchant’s business, especially if they are looking at PayPal as an option.  Many resellers will do what they can to beat PayPal’s pricing.  This, however can put off some merchants who prefer to simply sign up online and forego the merchant/reseller interaction.

With PayPal there are a number of different packages that merchants can sign up for depending on what they need.  This can be a little confusing for the average person so we will break them down here:

• Website Payments Standard:  This is the most basic option that allows for merchants to use PayPal’s buttons to take transactions through PayPal’s website.  The customer is transferred to PayPal’s website to complete the payment.  Works with all major credit cards.   No up front cost or annual fee at the rate of 2.9% plus 30 cents.  Very simple and basic all around.
• Website Payments Pro:  This is a more advanced version of the previous option that allows for the merchant to process through their 3rd party shopping cart or customized solution.  There is a monthly fee of $30 at the same rate of 2.9% plus 30 cents
• PayPal Virtual Terminal:  This is exactly what it states it is, PayPal’s virtual terminal or credit card machine online.  Once again, no up front cost at $30 a month and at a little higher rate of 3.1% and 30 cents a transaction.
• *Payflow Link:  This is PayPal’s gateway service that allows for merchants to connect to a third party merchant account.  This is the cheaper version that, like Website Payments Standard takes the customer to PayPal’s website to make the transaction.  This includes the virtual terminal.  There is a $179 setup fee, $20 monthly and 10 cents transaction fee on top of the merchant account fees.
• *Payflow Pro:  Same as Payflow Link except that it integrates with a third party shopping cart or has API for customized integration.  Includes the virtual terminal.  There is a $250 setup fee, $60 monthly and 10 cents transaction fee.

*With both of these options, PayPal charges for technical support.  There are 3 options (this is a bit rediculous) that range from $12 to $495 a month!  See here.

In looking at these different options from PayPal it seems to make the most sense to use the first one if you are a small company doing a few transactions a month.  This is great for mom and pop type businesses and we often recommend that to them.  However, if a merchant wants to be able to take transactions through their website and a virtual terminal they will need both accounts which can result in a $60 monthly fee.  That totals to $720 a year in monthly fees alone!  The other option is to go with a Payflow account which can be quite costly as well.

ROUND 2 WINNER – PayJunction because it is once again simpler, more consumer friendly and more affordable.

Round 3 – Customer Support

PayJunction includes its customer support with the Trinity System at no extra cost.  There is phone support available M-F 8-5 PST as well as an online ticket system for off hours.  Unlike most major providers, PayJunction uses in house support staff that are readily available at a direct extension.  They are friendly and knowledgeable and usually completely familiar with the callers account.

PayPal offers email support to all of its customers as well as an automated toll free support line for basic inquiries.   Like most major companies these days, there is a ton of button pushing needed and long waiting times to get to real person.  If using their gateway, any technical support must be payed for as noted above.  Because PayPal is such a large company their support can get a little bogged down and most complaints about the service seem to arise because of poor support.

ROUND 3 WINNER:  PayJunction for it’s straight forward approach to customer service that harks back to the ‘good ol days’ of client/customer relations…that is, you actually talk to a human being on the phone!

Final Round – Overall Customer Satisfaction

PayJunction has a near perfect record of customer satisfaction that is unparalleled in this industry.  We can make such a bold statement after running a Google search on the company.  The product stands up to consumer reviews like no other and the service is undeniably top quality.  The only negative that we were able to find was about 1) the reseller program (Is PayJunction a scam? site) and 2) the merchant service that come bundled with the system.  The first issue is immediately resolved if one reads the scam.com website post.

( 3-15-10 UPDATE!!! – PayJunction is now serving as an ISO to First National Bank of Omaha which means no more issues with third party ISO’s or banks!!  Our service just got that much better!)

The second issue is a little more complex as it takes into consideration the involvement of a 3rd party bank.  As with any merchant account, problems may arrive with issues such as chargebacks, limit increase denials due to bad credit, etc.  While this has much more to do with the issuing bank than the gateway, PayJunction still will act as a middleman to help their customers with any dispute with the bank and do everything in their power to make sure these issues don’t arise in the first place.  Really, it is both the reseller’s and merchant’s job to make sure all of these issues are discussed before the account is set up.  We will do a post on this in the near future.

For PayPal, customer satisfaction seems to be in the eye of the beholder.  Like any massive company of this size, you will have both view points.  PayPal definately did not pass the Google test as there are literally thousands of sites devoted to exposing the negative experiences PayPal users have gone through.

As we stated in the beginning of this post, many of these are obvious ploys to gain business by other rival companies but others  run by neutral consumer advocacy groups do make valid points.  The biggest issues seem to come from customers dealing with chargebacks and how PayPal deals with them.  The lack of direct communication with account managers can be very frustrating as PayPal users are forced to use email to get info on these debited funds.  At least with a merchant account the merchant has the ability to argue their case with someone over the phone and issue a counter dispute with the correct supporting documents.

FINAL ROUND WINNER – PayJunction with the sweep!

So what did we conclude in our comparison?  While being as neutral as possible it was clear that PayJunction beats PayPal six days from Sunday in all categories.  We can say that for those merchants who deal primarily with Ebay sales, small volumes and donations they will probably be happy with PayPal because of its no hassle, affordable Website Payments Standard option.  However, those who process serious volumes, deal with higher risk business models or products, need multiple ways of taking credit cards or run enterprise software are going to run into a lot more issues and fees than PayPal concedes openly on their website and should probably look into getting set up with a merchant account and gateway like  PayJunction.  We hope you found this post informative and useful and as always recommend that merchants do their own research and questioning to find the best service for their credit card processing.

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