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Many new ecommerce sites need to minimize their upfront expenses and certainly one way is to process payments using PayPal. A Pay Pal shopping cart allows the purchase to be processed via PayPal.
 The first version of PayPal appeared in 1999 and offered an alternative to the traditional methods of credit card processing. PayPal made it possible for virtually anyone with a bank account to accept credit cards and also established a new convenient way to transfer cash using PayPal to PayPal money transfers. In 2001 PayPal went public and in 2002 Ebay purchased PayPal for $1.5 billion.
PayPal Safety
MERCHANTS
Millions of transactions are processed via PayPal. Merchants offering PalPal as a payment option are NOT putting themselves at risk any more than any other type of merchant processing account. PalPal users (including merchants) can be the target of scammers and this typically happens via emails that tell the user that he needs to update his account and then provides links to sites that look exactly like PayPal where your information is copied and used for illicit purposes. LESSON: Never click a link to PayPal even if the email looks legit. If you think the email is legit, go directly to PayPal using your web browser, login and manage your account directly.
ARE BUYERS PROTECTED?
A PayPal transaction is equivalent to writing a check and offers about as much protection. A PayPal to PayPal money transfer offers the least protection and PayPal can't always process a charge-back if buyer feels he got ripped off. My advice to consumers is whenever possible to make your payment using a credit card as the payment source within PayPal. If you have a debit card, that is a good second choice. You then have the protection of your credit card if and when you choose to dispute the purchase or don't receive your goods or services that were paid for.
PayPal Benefits to the Merchant
NO MINIMUM PAYMENTS
A standard PayPal account has no costs relative to signing up. ZIP - ZERO! This makes it very attractive to start-up ecommerce businesses. A standard merchant account can have setup charges, monthly minimums plus a percentage and per transaction fee. Standard PayPal only has a percentage and per transaction fee.
PayPal charges for merchants selling less than $3,000 per month 2.9% + $0.30 for each transaction. For something that costs the buyer $10, PayPal gets 59 cents.
ACCEPT ALL MAJOR CREDIT CARDS
 PalPal allows you to accept all major credit cards (including American Express). By contrast, a standard merchant account usually allows you to accept Visa and Mastercard. You must establish a separate relationship with American Express to be able to also accept Amex and this also means additional monthly charges.
Paypal Drawbacks
The major drawback for ecommerce owners using standard paypal services is how the processing of the transactions occur. Once a client is ready to buy and clicks "checkout", the transaction moves immediately to the PayPal site and the buyer is required to essentially sign-up for a PayPal account whether he wants one or not (or sign in if he already has an account). There are two things that intimidate the buyer at this point.
FIRST
The transaction is not happening on the site where the client was shopping. Jumping to the PayPal site can be a little startling to the buyer who isn't necessarily familiar with this process. At the very least, it appears to be a "hassle" for someone who just wants to checkout. Another consideration is what if the buyer wants to go back. It can be done but navigationally, it is a little more cumbersome. ANYTHING that diminishes the buyer online purchase experience can affect your bottom line.
SECOND
The buyer provides information to PayPal, not the merchant. In the process, the buyer is actually establishing a PayPal account if one doesn't exist, or signing in if he does. That may not seem so bad but it is a factor that affects conversions for ecommerce sites. It also robs the merchant of valuable contact information associated with the buyer.
COMPROMISE SOLUTION
PayPal does offer a PayPal PRO account for merchants (which our carts are compatible with). This eliminates the two objections listed above and is still a good deal for merchants who aren't ready for full-blown merchant accounts. Using PayPal Pro lets you accept credit card purchases ON your site and appears as a more routine online purchase. PayPal Pro accounts cost $30/month. Transaction fees are the same as a standard account. If you are not comfortable with your buyers having to sign up for PayPal and complete the transaction on PayPal's site, PayPal Pro is a good option. There are other features you might also find useful in PayPal Pro (such as a virtual terminal) that could also tip the scale if you're on the fence.
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