Paypal - an alternative for payment processing?

Over the last 12 months we've done quite a few e-commerce integrations with the Paypal service and found that its payment processing interface has come a long way from the old one-way 'Buy Button' type of integration.

Originally, you used Paypal as an electronic 'wallet'. You needed to create an account, then deposit funds into it, which would then allow you to purchase things from other people/businesses with a Paypal account or transfer monies to them.

All well and good, great for buying something on eBay maybe, but not really smooth enough to work as a generic payment processor.

But that was then. Now, Paypal provide a range of programming interfaces that allow developers to integrate their website shopping carts to Paypal for the single purpose of processing the payment.

What is key in this is that a buying customer no longer needs to have a Paypal account to make the transaction. This means that an online buyer can make a purchase with their credit card without hitting the 'account roadblock' that used to exist (and still exists with comparable systems like Google Checkout and Amazon Payments).

For the buyer, the experience is similar to using any of the heavyweight payment processors like Worldpay. They click 'Checkout' on the merchant site, Paypal asks for payment method details, and are then returned to the merchant's site which will inform them of success or failure of the payment through an authorisation dialogue with Paypal that requires exchange of a security token.

For the merchant, acquiring an account is quick and easy compared to many other types services. The charges aren't insignificant, but they can get their funds relatively quickly.

It's not perfect; they still (understandably) push the Paypal login over the credit card payment method, the return to the merchant's site is a little clunky and the Paypal Sandbox testing environment is hard work. There's also the prestige, or lack of it, of the Paypal name. It certainly has had an association with the 'amateur hour' of eBay, but in the internet world, these things don't necessarily stick.

But if you're looking for a known name payment processor with no setup fees and no monthly set payments, then maybe Paypal is worth a shot.