Should I use Paypal or Credit Card as my payment gateway?

One of the most common questions we get asked when building an ecommerce site is whether they should use Paypal or Credit Card as the payment gateway for their website.

When setting up a credit card payment gateway, you first need a merchant account with your bank as this then allows you to accept credit card payments and have them deposited into your bank account. You also need a payment gateway such as Egateway, SecurePay or Eway to then accept the credit card payments on your site.

If you choose to accept PayPal then it allows customers to pay via their PayPal account or by Credit Card. Accepting payments through PayPal does not require a merchant account as PayPal is essentially a bank and payment gateway all rolled into one.

Our research has found that people who have PayPal accounts prefer to use PayPal is it provides extra security and convenience. If you have a PayPal account set up then you can easily pay on sites that support PayPal without having to find your credit card details and typing them in. However our research has found that people who don’t use PayPal prefer to use a normal payment gateway rather than paying by credit card through PayPal. This is because the process of paying by traditional credit card using PayPal is not as smooth as it is when using a credit card payment gateway.

So to answer the question “Should I use PayPal or Credit Card as my payment gateway”, our answer is both! Sites that provide both a credit card payment gateway and PayPal tend to have around a 30% higher conversion rate than sites that only offer one of these options.