Firstly let us say that we are going to split this up into 2 major options, basically whether you want to use PayPal with your customers going to their website or whether you would like to have payment directly on your website. We will look at the advantages and disadvantages of both and give you as much detail as possible.

PayPal Advantages

1. It is quick and easy to set up. Although you will need to verify your account this can be done in a very easy way and does not involve the same approval processes as setting up a bank account.

2. There are no fixed charges. It is free to set up a PayPal account and one you have it you will not pay anything unless you sell anything. This can be particularly useful if you are a new business as while you are getting started your sales volumes may be reasonably low.

3. Cheap and easy to add to your website. When you are getting your website set up you will find that it is much easier for your developer to set you up with PayPal. This is mainly because the secure payments do not need to be processed on your site.

4. No security risk for you. As the buyer will be taken to the PayPal website to have their payment processed it will be them that is responsible for the security of the transaction. This also has the added benefit that you do not have to pay for security certificates.

5. PayPal is known and trusted. As PayPal is used by ebay is means that it has been used and seen by a large section of internet users. This means that most visitors to your site will be comfortable using the PayPal payment process.

PayPal Disadvantages

1. Carries a High Transaction cost. Compared to other options out there PayPal charge a high transaction cost which, as your sales volumes grow, may not be cost effective.

2. People leave your site to pay. As people go to the PayPal website to have their payment processed they will be leaving your site to pay. This is not a major problem as they will be redirected at the end of the payment but may be something you do not like.

Direct Online Payment Advantages

1. Payments are processed in simple steps on your site. This is very consistent for the buyer as they move from page to page on your site.

2. Low Monthly charges. The charge per transaction can be low using the right providers, which if you are selling a lot of products, may be vey cost effective.

Direct Online Payment Disadvantages

1. High Fixed Costs. You will usually have to pay a set up fee as well as an ongoing monthly charge before you sell anything. Obviously when you are starting out it may not be an ideal situation as the costs may be larger than your sales. It may also cost you more to get it set up in the website build phase.

2. Need for Personal Security. If you take credit cards directly on your website you will need to ensure you have a secure server and a security certificate. This will be additional costs for you.

3. Potential lack of trust. Customers coming to your website may have a lack of confidence in the security on your site if they do not know you.

Conclusion

The above are all things that need to be considered before you make the decision of how to accept payments on your website. We would normally recommend that if you are a new business you should go for PayPal and then as you grow and increase your sales you should move on to direct online payments.