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When I spoke to the VP of Marketing for PayPal awhile ago they do offer a referral program but you need to commit to a large volume of signups. I agree that PayPal should have a better partner or affiliate program.

Agreed with the referral bonus, however, the real concern from our perspective is potential for conflict of interest. The hosting company really should make sure they have (in writing) this condition of referring business from whomever they align with before hand.

My ad agency spent several months researching this very topic for a new client of ours launching a web directory. We set them up with a traditional online credit card gateway account. However, one point I rarely see written about is that the set up for the traditional merchant account can be very very time consuming and difficult compared to PayPal, which is close to effortless. Even now that it is set up, some people here wonder if it's overkill and PayPal would have been fine. It just came down to credibility. PayPal looks less credible to many consumers.

Again, great point. As far as perception, it really comes down to person preference. PayPal has either a strong brand or dubious one, depending on who you speak to. With all your research, what were your findings when all was said and done?

Well, some of this may come under the “duh” category. Essentially, from the consumer side: PayPal is trusted for small ticket items, eBay, etc. The consumer is used to seeing PayPal in those kinds of settings. From the vendor side: PayPal is great if you have a small business or home business, small ticket items and don’t have the budget for the programming needed to link to a merchant account. Our modest research showed the mixed perception regarding PayPal that you mentioned. Generally speaking we found that consumers expect that a quality company, name brand, or “big company” will offer traditional merchant payment options without PayPal. This goes to trust and brand perceptions. Our client, though smallish now, wanted to be perceived as a confident and trusted national vendor. So, for now, they have a traditional merchant account without PayPal. Like most online options, there is no one size fits all solution and I think that’s good.

Matt you are right. PayPal is a commonalty for people with small transactions and is becoming a very untraditional merchant to deal with. My company has a partnership with PaySimple, a newer payment processing company that has a great revenue share program and has been extremely easy to work with. When looking at companies to possibly partner with do not forget to look for a partnership that is really mutually beneficial. For example, PaySimple helped my company with some marketing efforts after setting up the partnership and has also allowed me to integrate my own design for the payment system using my own logo, my own website, and my own wording. PayPal likes to control that. There are a lot of payment processors out there other than PayPal that have benefits make sure to compare all the options before settling.

Merchant Service Provider is a great new alternative to Paypal and Google Checkout.

Merchant Service Provider has many different options for merchant services at affordable prices.