PayPal sent out a mail blitz today regarding their new PayPal Payment Pro merchant services. I got email from about 20 people today asking what I think of it.

I hadn’t taken a look at this stuff before, so I went and took a quick look at the developer documentation. Even before looking at this I was trying to figure out what makes this PayPal solution different from other Merchant Services.

The numbers for merchant rates look reasonable – with merchant percentages from 2.2 to 2.9. I’m not sure whether this is for all transactions (including AMEX which with traditional providers is 4% as are business card transactions) or whether this is just for MC and Visa as usual. Plus a $.30 per transaction charge + a $20 a month fee (waived for a few months after signup. No other signup fees. This doesn’t sound very different than other merchant provides with the exception of the flat rate if this truly applies and might be appealing to people heavily taking AMEX and business cards.

However, looking at the API I was disappointed to see that PayPal doesn’t really support straight through merchant processing. Instead this mechanism still requires redirection to PayPal for entering billing contact information. It’s easier than standard PayPal payment redirection because there’s no requirement for verification like with standard PayPal payments.

The process apparently goes like this:

• You click a button on your site to check out
• You send your user to PayPal and have them fill out Billing and Shipping Info
• (they login with PayPal and that’s the verification)
• They are re-routed back to your Web site to the final order confirmation page
• User clicks Make Payment (or whatever)
• You use the PayPal API/Web Service to finish the transaction

I don’t know about you, but this doesn’t seem much of an improvement over taking standard PayPal payments. For a professional site, having any sort of re-direction to another site is just not cool. It feels mighty clunky and makes for a discontinuous shopping experience.  And from the developer point of view – if you have to set up redirection of transactions anyway you might as well do the full PayPal walk through, which is not a whole lot more involved. Worse, if you go with this mechanism as a supplemental payment option you end up with potentially a whole lot of extra logic because now PayPal has removed your contact information and all the other information that's probably quite useful to you.

Of course PayPal is baiting with the rates and blitz. Doing the math though, I still come up with pricing that’s very similar to what I pay with MerchantPlus and Authorize.NET. But that solution (or others like PayFlow Pro etc.) provide much smoother integration into your own Web Applications.

Not impressed even if the rates turn out lower...