When you use PayPal, they are your "middleman" -- you don't have a direct relationship with the bank. You have an account with PayPal, and when someone pays you by credit card, they are actually paying PayPal.

After the 2-4 business days it takes for the transaction to be processed and received by PayPal, it's deposited into your special PayPal account. It then takes another 2-4 days for the electronic transfer of funds from this PayPal account to show up in your bank account (some banks charge a fee for this service.) Can you afford to wait up to 10 days to receive payment? Sometimes longer. for example, it can take 6-8 business days to transfer funds from a Canadian account, in addition to the initial 2-4 business days.

When you have a merchant account, YOU process the transaction directly with your customer, and the funds are deposited DIRECTLY into your bank account in 2-4 days.

Here are some important points to understand about the PayPal arrangement.  NOTE: All quotes are from the PayPal site (mostly from the Terms of Use Section).

1. If there is a dispute about payment, with PayPal you have no legal standing or recourse, since you aren't an individual merchant.

When you have your own merchant account, such as those offered through Practice Pay Solutions, the processing bank defends your rights.

As a merchant, five points of identification are required for each transaction -- name, address, zip code, cc # and expiration date.

3. "You acknowledge that (i) the Service is not a banking service (ii) Service accounts are not insured by any government agency of any nation, (iii) the Service is not subject to banking regulations..."

4. Security is an important consideration. When you deal directly with the bank as a merchant, the highest security protocols are available to you with every transaction. "PayPal.com strongly suggests that you use a web browser with 128-bit encryption. Regardless of whether you use a web browser with security features, PayPal.com is unable to ensure that data transmitted via the Premier/Business Service is secure and/or will not be intercepted by third parties."

While encryption is an obvious security measure, how many times have you received an email allegedly from "PayPal" only to find out that it's a hoax? Unfortunately for them, their name has been spoofed and used in emails containing viruses or links to fraudulent web pages. Some of these fraudulent pages attempt to capture your username and password information if you are subscribed to the PayPal service, and as a result they now have a web page devoted to "Report Fraud/Spam - Fake Site" which notes that, "If you think you have received a fraudulent email that looks like it's from PayPal, forward the entire email to spoof@paypal.com, and then delete it from your email account." At the very least this is a distraction to your business day if you have to sift through emails and determine whether they are real or fake.

5. PayPal's service is useful ONLY if everyone with whom you are going to have financial transactions is also willing to sign up for the PayPal service.

With a merchant account, you can do business with anyone who has a major credit card... the only limitations are those you impose on yourself, i.e. you need to choose which cards you'd like to accept and complete the appropriate applications. Your customer need only to provide you with their name, billing address, credit card number and expiration date - no further action is required.

Note: PayPal "may limit withdrawals and require additional information from you depending upon your location (U.S. or international), credit rating, and other factors. Generally, in order to withdraw more than $500 per month, we require you to complete some authentication procedures, such as confirming: your email address, your bank account, and your social security number."

"Business and Premier account holders receiving payments in U.S. Dollars will be charged the Standard Rate of 2.9% + $0.30 USD on each payment unless they qualify for the Merchant Rate of 2.2% + $0.30 USD." Add to that, "If you receive a payment from a user in another country, you will also be assessed a Cross-border fee of 1% of the payment amount for U.S. Dollar payments and 0.5% of the payment amount for Canadian Dollar, Euro, Pound Sterling, and Yen payments."

And, "If your transaction involves a currency conversion, it will be completed at a retail foreign exchange rate determined by PayPal, which is adjusted regularly based on market conditions. This exchange rate includes a 2.5% spread above the wholesale exchange rate at which PayPal obtains foreign currency, and the spread is retained by PayPal." So, in some instances you'll be paying between 3.2% and 3.9% plus $0.30 USD per transaction. Or more!

This compares to between 2.15% and 2.20% plus $0.25 USD per transaction as offered by Practice Pay Solutions.

If you plan to sell ebooks or other digital products beware. PayPal's policy is such that "the Seller Protection Policy does not cover digital goods and other electronically-delivered items."

A great number of Practice Pay Solutions clientele offer digital products.  In combination with our shopping cart, there is a digital product delivery feature which ensures that if a payment is not immediately accepted, the product will not be delivered until you have an opportunity to complete the transaction.

And if you have an International client base, also note that "If you choose to ship internationally outside of the Seller Protection Policy, you do so at your own risk. Furthermore, shipping to a country not on the list of PayPal approved countries is a violation of our service and may result in termination of your account."

If you want to learn more about www.PayPal.com, be sure to read over the Terms and Conditions carefully. Visit www.practicepaysolutions.com to learn more about the PPS program.

See an explanation and comparison of fees for PayPal vs. Practice Pay Solutions...