I'm building a website that I would like to launch soon and were planning on selling digital goods. My initial idea was to just use the PayPal shopping cart, since I already have a PayPal account and it so easy to set up(I definitely don't want to go through the hassle of setting up a merchant account).
But all these horror stories I have read on HN the last few days have scared me a bit. I also seems that its even worse if you're not a US citizen, especially if you live in a "suspicious' country (I'm South African, not really a country with high internet fraud cases, but all African countries are painted in a bad light for some reason). But are there really any good alternatives?
I run BitBuffet.com where we enable end users to sell digital downloads and we use PayPal exclusively. These horror stories are somewhat uncommon (we've never experienced one or heard of a customer experiencing one).
My advice: go with PayPal until you are making well over $2-4k a month, then switch to a dedicated merchant account once you have proven volume. There are 100 other more likely points of failure than not getting your money from PayPal.
That's what we have done. Paypal horror stories freak me out, so I regularly withdraw to my bank account and then transfer to another account so paypal can't go after the withdraw. Paranoid, yes, but better than nothing.
Now that we have $1.5k a month in donations, we are using Braintree. Wasn't worth setting up before proving financial viability, but definitely worth the peace of mind with a proven business. Great piece of advice.
You'll usually have to pay monthly fees, and some will keep your money for some weeks before they release them, to cover for chargebacks. But as mentioned earlier, as soon as you have enough sales to cover the cost, switch to something other than PayPal. NEVER let it become your only source of income.
Make sure that whatever method you use that you never ever build up a balance bigger than a few hundred bucks, that way if they go south, decide to freeze your account or do any one of a hundred other nasty things you don't have too many eggs in that basket.
Epassporte is in trouble by the way, best to stay away from them.
While you're small, you can use a combination of PayPal, Google Checkout, or Amazon Payments. His mistake is not upgrading to his own merchant account once he started making a bunch of money.
But all these horror stories I have read on HN the last few days have scared me a bit. I also seems that its even worse if you're not a US citizen, especially if you live in a "suspicious' country (I'm South African, not really a country with high internet fraud cases, but all African countries are painted in a bad light for some reason). But are there really any good alternatives?