Traditional Merchant Account vs PayPal

Choosing the Right Solution for Your Business

When you’re looking to begin or expand your online business and sales, the first thing you should figure out is how you will accept consumer payments. Will you go with a simple service like PayPal or will you opt for a traditional merchant account? Both options have their benefits, and it will come down to your business needs. Traditional merchant accounts may offer more features, but come at a higher starting rate. PayPal and services like it have grown into their own in recent years and have broadened their offerings. Here are the key differences between traditional merchant accounts and services like PayPal to help you make the right decision for your business.

Startup Cost

Choosing a traditional merchant account or PayPal merchant account should never come down to cost. It can play a key factor, but it should be weighed against the services offered. PayPal is the more affordable option for small businesses, as they only charge a transaction fee, while merchant accounts may charge monthly fees and transaction fees. You may want to go with a system like PayPal if you don’t process many sales.


Traditional merchant account services are the way to go when it comes to services offered. From in-house technology, partnerships with multiple bank tiers, to customizable gateways, merchant accounts offer more for the money. PayPal not only takes the customer away from your website, but none of the action buttons or payment options are customizable to fit your business. Merchant accounts also offer in-person terminals and gateways for traditional, brick and mortar businesses, something PayPal has yet to implement.


Perhaps the most telling differentiation between PayPal and traditional merchant accounts are the security features. PayPal, with its unique system of offering one merchant account for a multitude of businesses, can’t combat fraud, handle chargebacks, or monitor all the unsavory businesses it’s given an account to. This places risk on the customer, and can have your business shut down rather quickly if anything questionable surfaces. Merchant accounts offer built-in security features, have a one-to-one setup, and can aptly monitor your business practices and assist you in the event of a business-critical issue.

Customer Support

PayPal has notoriously bad customer support. They don’t have dedicated account managers, which can hinder you when needing to solve a problem that is hindering your business operations. Added to that, PayPal can freeze your account without a clear explanation. With many traditional merchant accounts, they can appoint one person to oversee your account. This benefits you when a situation arises and you don’t have the time to explain your business and what you need fixed.


When you want your business to grow, having the capability to expand with your current account provider is important. You don’t want to start over somewhere new within a matter of months or a year or two. If you know that you will consistently do a small number of sales and never expect it to increase, PayPal isn’t the worst option. However, services like PayPal are not meant to be long-term solutions. Once you hit a certain level, you may be required to switch to a traditional merchant account. Merchant accounts can grow as you grow, and provide more support along the way to reach your full business potential.

Have All Your Business Needs Met With TOTAL-APPS

As a full-service merchant provider that is PCI-compliant and FEC-compliant, TOTAL-APPS can help grow your business and handle any business-critical issue. Our US-based service team offers a high level of expertise and fast response time to get you back to business. The committed account managers at TOTAL-APPS review their merchant accounts daily to check for of fraud or chargeback indicators. We notify the merchant immediately when we detect any problem to promptly fix the issue.

Contact us to experience how TOTAL-APPS can help your business to grow faster.