I used PayPal's Virtual terminal for about a year. I'll list the Pro's and Con's I found using it.
Pro's:
1. Easy signup, if you already have a PayPal account it's even easier.
2. No application fee's or cancellation fee's.
3. The terminal form is fairly simple to us with minimal configuration.
Con's:
1. The terminal is web based and PayPal's site loads very slow most of the time.
2. You cannot force a transaction, meaning most fields are required including the AVS and CVV2.
3. PayPal's rules for verification are very strict and sometimes will not allow a card to pass even when the card is good.
4. By default PayPal sends a conformation E-mail to the customer letting them know a charge has been made through PayPal. Doesn't sound like much of a problem but there are a % of people who hate PayPal (www.paypalsucks.com) and have called to let me know they did not want to have their card charged by PayPal.
5. If the customer disputes the charge PayPal will instantly revoke the disputed amount from your account to be "held" until it is resolved (I felt very power less). The resolution process consists of E-mails which can drag out for a long period of time.
I recently switched to Costco's merchant services (Nova) because of the above mentioned issues. I was also using PayPal's "Website Payment's" which was the main reason for the switch.
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