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Merchant Account vs Stripe and PayPal for eCommerce

  1. What is a Merchant Account? 01:18
    • This is basically an agreement with credit card companies. You have your own credit card processing agreement with a specified bank account and everything all set up for your business.
    • This comes from the early days of eCommerce.
  2. PayPal and Stripe changed up the payment methods for eCommerce 01:58
    • You don’t need a Merchant Account anymore. Now, you just need an email account. Stripe and PayPal assume the risk for you.
    • These services charge a flat rate, which is good when you are first starting out.
    • However, as you start to sell a high volume of product, you might want to consider looking into a Merchant Account.
  3. So which should you use? 03:21
    • It depends on your business.
    • If you’re first starting out and you don’t know how much you will sell, then PayPal and Stripe are an easy way to go.
    • However, if you know that you have a high volume of sales, you may want a Merchant Account.
    • If you’re a business with high volume sales, you may have trouble with payment disputes with using services like Stripe.
    • You can always start with PayPal or Stripe and then migrate later. Just know that if you do this, it may be difficult to switch over, if you have many recurring payments coming through your system.

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