PayPal is best known as a safe third-party escrow system used mainly by individuals as a means of paying for items bought on eBay. There's another side to PayPal, though - the merchant side which can be used by businesses to accept payments on e-commerce sites. And you're not just limited to accepting money from other PayPal accounts - it'll quite happily process card payments too. Add to this the ability to integrate PayPal's merchant tools into your own Web site and it becomes an attractive proposition.
After you've signed up as a PayPal merchant - a relatively pain free exercise that involves filling in a few forms and supplying your business registration number - there are a couple of different approaches you can take to hosting your product portfolio and shopping basket with PayPal. One is to have the "buy one of these" buttons on your own site and simply use PayPal to process the payment. It's a good approach if you sell the kind of product that people are going to buy individually and you don't want people to be able to put loads of items in a shopping basket and then check out with it all cartload at the end. But bear in mind with this approach that you do have to develop and host your website separately.
The alternative is to put your product data on PayPal's system and have it deal with the whole shopping cart concept for you. When the customer comes to pay, they can choose to use their PayPal account or can hit the "I don't have a PayPal account" button, which will then lead them to a card details input screen.
Whichever approach you choose, it's all very straightforward and easy to set up, and that really is PayPal's strength. Everything is done through a browser, which though not as slick as a Windows interface such as Actinic's or EROL's, does have the overall effect of enforcing a certain degree of simplicity on proceedings. And as an extra bonus, there's no need to set up separate merchant services with your bank - PayPal deals with all of the payment processing for you.
But there are drawbacks. Using Buy Now buttons, in particular, on your own site is a clunky way of getting into e-commerce; it's fine for very small businesses with a restricted product portfolio, but as soon as you start thinking about more than three or four products, your site is going to become unwieldy and difficult to deal with. Taking the HTML that PayPal generates for each button and plugging it into the code on the page next to each and every product is a laborious process.
And then there are the dreaded transaction charges. Though you'll be faced with these whichever e-commerce solution you choose, those levied by PayPal are higher-than-average and there are other restrictions too, such as a 500 limit for new buyers, which could prove to be a problem for vendors offering medium to high value goods.
Verdict
A simple but flexible offering with a number of variants to suit most small- to medium-sized online stores
No server requirement except for your basic web pages - the shopping cart and payment screen are both hosted by PayPal
