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Paypal Basic versus Paypal Pro

For many merchants Paypal is a viable option for accepting online payments. But which version of Paypal is right for your business? According to Paypal, Paypal basic is intend for:

Businesses that want an easier, quicker way to start accepting credit cards online. Set it up in minutes. You don’t need a separate merchant account or gateway.

Paypal Pro is intended for:

Businesses that want the functionality of a merchant account and gateway and more control over the customer experience. Website Payments Pro requires a technical, API-based implementation.

To simplify Paypal’s explanation, Paypal Basic is for small “mom and pop” style businesses who do not plan on growing their online store. Paypal Pro is for merchants who wish to maintain a professional appearance and grow their business.

There are two main differences between Paypal Basic and Paypal Pro: your potential processing fees and monthly fees. Paypal Basic offers four tiers of fees which are based on your previous month’s processing volume:

  • Merchants who process less then $3,000 per month
    • Percentage Rate: 2.90%
    • Transaction Fee: 30¢
  • Merchants who process more then $3,000 but less then $10,000 per month
    • Percentage Rate: 2.50%
    • Transaction Fee: 30¢
  • Merchants who process more then $10,000 but less then $100,000 per month
    • Percentage Rate: 2.20%
    • Transaction Fee: 30¢
  • Merchants who process more then $100,000
    • Percentage Rate: 1.90%
    • Transaction Fee: 30¢

Paypal Pro offers only three tiers of fees which are also based on your previous month’s volume. The fourth tier for very high volume merchants is eliminated. Also, Paypal charges an additional $20 per month to have the Paypal Pro service.

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