EcommerceBytes-Update, Number 342 - September 08, 2013 - ISSN 1528-6703     3 of 6

Sellers Choice Awards: Online Payment Services 2013

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The results of the Sellers Choice Awards are in for the Online Payments category, and it's nearly a dead heat when it comes to overall scores for the four services receiving the most ratings: ProPay (6.6); Amazon Payments (6.5); Square (6.4); and PayPal (6.3). However, PayPal remains the most popular of payment services among EcommerceBytes readers participating in the Sellers Choice Awards.

That compares to the top four payment services for the 2012 Sellers Choice Awards - Google Wallet (7.1), Amazon Payments (6.9), ProPay (6.6) and PayPal (5.6). (Google dropped Checkout so was not included in this year's survey.)

When considering companies to include in the Sellers Choice survey, we defined online payment services as one that could be used on more than one channel or venue. Many respondents likely judged Amazon Payments as the method they used on's own marketplace, but in fact, merchants can use Amazon Payments on their own websites as well.

Etsy's Direct Checkout is similar to Amazon payment processing - but it is only used on its own marketplace (unlike Amazon, it's optional), so we did not include that in the Sellers Choice survey. However since sellers expressed the desire to rate Direct Checkout, we will consider adding it in future surveys. It would certainly be interesting to see how sellers rate Etsy's payment offering.

Cash and Checks Are Still Alive and Kicking
While many people pooh-pooh the idea of cash and checks for online purchases, it remains a popular method for some shoppers. An amazing 81 percent of sellers said they accept checks, money orders and/or postal money orders, and 56 percent accept cash.

It's interesting to note that Etsy, which one could certainly now consider a "mainstream" online marketplace, allows sellers to accept multiple payment methods including cash and checks, though a recent test that Etsy undertook indicates that may not always be the case - see What Does Etsy Have Against PayPal?.

ProPay has nowhere near the installed base of PayPal, so it's not surprising to learn it earned it a 5.9 in terms of Customer Popularity. ("Everybody knows PayPal but ProPay needs more marketing for their brand," wrote one seller.) But it got good marks in Customer Service (7.6) and Account Holds (7.4). Sellers rated it a 6.7 for Fees, and it earned its lowest mark for Resolution Process (5.7).

Reader Comments - The Good, The Bad, The Ugly:
ProPay was rather high (in terms of fees) and eventually priced themselves out of my business. I couldn't make back the fees. I didn't rate them worse because this was partially due to the type of merchandise I sold, not their fault.

I do not like ProPay's need to charge me a quarter every time I transfer my money into my checking account. I do not use my debit card for them.

I had an issue with ProPay, and promptly gave them the paperwork they needed, but they lost it and I almost lost my money. They resolved it at the last possible minute of the last possible day, and ruled in my favor.

The account holds on ProPay were a bigger nuisance than PayPal, holding up all of my money once (even though it wasn't much). I generally did not encounter these problems with PayPal.

I think people like to be able to use their credit cards, and I am seeing a higher usage of ProPay and Etsy Direct Checkout where people can use their cards, than I am (with) PayPal.

ProPay does not answer emails, but they will help you if you call them.

Amazon Payments
Amazon came in only after PayPal in terms of Customer Popularity at 7.5, and was rated 7.2 in Customer Service. Respondents rated it an average 6.2 for Fees and a 6.1 in Account Holds, and a 5.8 for Resolution Process.

Reader Comments - The Good, The Bad, The Ugly:
Not fond of Amazon but buyers like it as an alternative to PayPal. Fees are ok-ish.

Amazons fees are high.

Prior bad experience with Amazon. Guess the fee is about the best I can do since I cannot afford a Credit Card account.

Never had a problem with Amazon Payments customers.

Amazon took several business days to get back to me. Paypal took less than 24hrs to respond.

We have had zero problems with Amazon's Payment services. We have had problems in the past with fraudulent charges at PayPal, though that has gotten better over the past couple of years.

Only recently started to use Amazon Payments, Pay Pal is a nightmare trying to resolve anything. The customer service people act like they know nothing. Perhaps they don't.

I've had Amazon hold money for a month before releasing it to me. This was done only because I sold a lot of items during Christmas.

Initially the hold for Amazon was ugly on a stick - 2 full weeks but after a call and the CSR saw that I had been an Amazon marketplace seller for over 10 years the hold was removed and all was well.

For Amazon Payments, once you ship an item, they send your money to you that same day or the next day depending on when you mark the item shipped. We have never experienced any of the significant fund holds from PayPal that other sellers have complained about.

I get more clicks on PayPal then I do Amazon Payments. Perhaps because folks don't know what it is or that it acts like PayPal.

Any problems with Amazon have been resolved in one phone call and resolved to my satisfaction.

Square received a fairly high rating for Customer Popularity (7.2) and received a 7.0 for Fees and Account Holds. However, it only received a 5.8 for Customer Service and earned a fairly low score for Resolution Process (4.8).

Reader Comments - The Good, The Bad, The Ugly:
Square is expensive if you do not swipe.

Have had problems with Square.

Switched from PayPal to Square earlier this year and it is working great with a lot more ease of use and lower fees also.

LOVE Square!! They just charge the %. Wish PayPal only charged the % (even if it was another 1/10 percent or something to make up for the lack of a service fee. That 30 cents on small sales ($1 or $2) REALLY hurts!

No problems so far with Square, only good news.

Have not needed to contact Square since we stared using them, this is very good!!

Square's customer service is good, though it seems that Twitter is the only (or at least best) way to reach them. I'm ok with that but not everyone is.

Love my Square for craft fairs!!!

PayPal got the highest score for Customer Popularity of any service at 7.8. Sellers gave it 6.3 for Fees and 6.2 for Customer Service, and it received its lowest ratings for Account Holds (5.7) and Resolution Process (5.7).

Reader Comments - The Good, The Bad, The Ugly:
PayPal charges $.50 to deposit funds <$150 to my account, otherwise their fees are acceptable.

PayPal is my preferred payment process.

Paypal gets a ton of money and they don't try to overcharge you . . . they seem fair for what they are providing.

I use PayPal for processing credit cards because there is no monthly service charge. It is a bit confusing for my customers sometimes, therefore I didn't rate it as excellent. I have never had any problems with PayPal.

PayPal offers good service at a pretty reasonable price. Amazon Payments is not quite as good as PayPal but they provide a good service at a pretty good price.

Their fee structure could be lower, but then again the security PayPal offers and helps with chargebacks is worth some of the extra fee

I've used Paypal extensively. They offer very good support with a stable interface.

Paypal is becoming more of a hassle to use their guarantee of a refund regardless of the situation is a major problem. Switched to Square earlier this year and it is working great with a lot more ease of use and lower fees also.

Paypal should not take a % on shipping. Especially when it is a heavy item or Intl shipping,it really hurts the bottom line.

I like PayPal and have had few problems using them but find that they tend to agree with the buyer 99% of the time when it comes to resolutions.

Paypal requires a $30 monthly membership for Merchant Account, in addition to transaction fees. I've been stuck with it because I take orders from other nations and require Paypal's currency exchange. Now that International sales have dropped drastically due to USPS increase. I may be dropping Paypal for square at the end of the year.

They're a little slow, but I don't feel I've ever been left on the short end of the stick regarding the resolution process offered through PayPal. And when I call customer support, they are always right there and have been able to deal with my issue quickly and to my satisfaction.

PayPal should resolve disputes faster. INR is ridiculous as they can see tracking that shows delivery instead of seller having to copy and paste same info and wait 3 weeks to receive funds back. 30 per transaction fee is greedy, too, since they already take 2.9% fees.

PayPal customer service took a huge plunge last year and now is nearly as bad as eBay's famously poor service. The resolution is now automated, arbitrary and completely lacking the formerly efficient human touch.

Having PayPal shopping cart they rarely hold any payments, but when they do it's only 1-2 days before releasing back to my account

My understanding is the Banking Dept. confronted PayPal which now only freezes funds for an individual transaction not an entire account (which is what is allowed legally). I have never had any kind of problem with them freezing any part of my account.

All my customers use Paypal, both on eBay, most on Etsy and all of them do on my website.

Most people select PayPal as their payment option, but a growing percentage of customers are going for alternate options these days.

PayPal - my customers seem to like it. I don't like offering it but if I did not I would lose sales. And it is convenient, giving me a very fast turnaround time between the actual purchase and shipping my items instead of waiting for mail payment to arrive.

It is time for the Feds to regulate PayPal.

Even with offering cash and money orders as alternate payment options on my website, my customers prefer to use Paypal. I haven't had a money order payment in years and only very local customers use cash, but then they don't buy online.

Sellers Choice Awards
EcommerceBytes kicked off the Sellers Choice Awards in 2010, asking readers to rate marketplaces they had experience using. In 2011, we expanded Sellers Choice to include online payment services, and in 2013, we expanded the feature further by asking readers to rate Storefronts & Shopping Carts, Inventory Listing and Management Tools and Email List Hosting Service. Stay tuned as we bring you the rest of this year's results in future issues.

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About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to

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