PayPal vs. Merchant Account

Yesterday i went to CitiBank to set up a business checking account. If you're like me, you had no idea there was a difference between a regular checking account and a business checking account. I got set up with a flexible checking account that allows 200 transactions a month for 15 dollars a month. Luckily I knew the lady's son from high school and she waved the 15 dollars a month for a year. It's all about who you know.

Before i could get this set up however i had to go get a DBA (doing business as) at the county clerks office. This took like five minutes to do and cost only 15 dollars. The only problem i had was finding a notary who worked there because most of them were out to lunch. Ah i am now legal to start selling shirts.

NOW brings me to PayPal vs. a Merchant Account. I've always heard that unless your selling alot of items, like a whole lot, to use paypal. This is because a merchant account will reduce its rates the more you sell. PayPal takes 2.9% from every transaction plus 30 cents on top of that. Pretty busted if you asked me. So while i was at Citibank I asked the lady about the rates they charge for a Merchant Account. Since I had been with Citibank for awhile they gave me the deal of 2.4% and 19 cents per transaction. I don't know what the rates would of been had i not been a customer there for so long. The only catch was, there is a 199 dollar gateway fee and i think it was a 99 dollar set up fee. These were all one time fees, and the gateway fee could be used for any website i set up from now on.

I obviously chose to use a merchant account instead of the PayPal account. Primarily because I'm in it for the long haul and this will save me a lot more money over time. If you're setting up your own website however check with your bank to see what kind of deals you can get, before you decide on getting a merchant account. And always always always ask them to waive fees. There are a million banks opening up everyday and they are trying hard to keep your business. It's like paying sticker price for a car... DONT DO IT. Hope this helps anyone trying to decide. As always feel free to leave questions or comments.