PayPal reviews from startup founders

47 reviews by founders
Sept. 9, 2016

We used PayPal first for pre-orders and it was a disaster. They did not like the concept. It was either “ship the product” or “refund the money” with PayPal, so we had to refund everyone.

Leor Grebler

Co-founder & CEO - UCIC

Sept. 1, 2016

The PayPal API is much more complicated than Stripe’s or 2Checkout’s. We’ve had to try to customize the PayPal API for some clients. PayPal is good for simple things, but once you get into more complicated customization, there is a lot of documentation to go through.

Eyal Katz

Co-founder - ComicReply

June 8, 2016

We use PayPal for the small licensing business that we do. It works fine for us. We just went with it because it is the most popular tool out there.

Sean Murphy

Founder - Andy OS

PayPal - Best Credit Card Processor Tools for Startups

To the general public, PayPal is one of the most well-known payment processors, but relatively few companies use PayPal as their main payment processor, largely due to a complicated interface and reports of iffy customer service. Instead, most Stacklist founders use PayPal to supplement their primary credit card processing tool. But PayPal does have its upsides: It’s easy to set up, handy to have as a payment option for specific clients or customers that can’t or don’t want to pay with a credit card, and virtually ubiquitous among consumers.

PayPal is usually used in conjunction with other payment gateways and tends not to be startups’ main payment solution.

Setting up a seller account using PayPal is very easy, and you can choose from two options:

  • Option A: Choose an e-commerce solution already integrated with PayPal. Needs no programming skills and is typically used in conjunction with e-commerce site builders like woocommerce and Shopify.
  • Option B: use PayPal’s API to add a “Check out with PayPal” button to your site. This option lets you use other payment methods as well, although it does require programming skills.

PayPal allows you to process and send international payments in a wider range of countries than other payment gateways. For example, Stripe is currently only available in about 25 countries whereas PayPal is in over 200.

Businesses tend to use PayPal because it is PCI DSS compliant – since if you wanted to do it, you would need to self-host almost everything to make sure your web hosting is stored secured and maintained properly.

PayPal makes for a great out of the box solution, but it does have some faults. Customers have noted that sometimes PayPal does freeze accounts if they have reason to suspect fraudulent activity, stopping you from accessing your money. More on this below.

PayPal customer service is hit or miss at times. Representatives have different experience, so if you find yourself with one who isn’t helpful, we would recommend calling back and speaking with someone else.

How startups use PayPal?

what is they using?

How much does PayPal cost?

PayPal does not have any setup fees, cancellation fees or annual fees. Although they do have monthly fees if you are using PayPal Pro, which is $30 per month, recurring billing, which is $10 per month, or any of their added services.

PayPal charges 2.9% + $0.30 per transaction in the US.

PayPal gets a bit more expensive when it processes international sales/exchanges. For international sales, there’s an additional 2.5% charge for currency conversion, and then an added 1% international transaction fee.

Standout Features

Large user base

Although there are several other payment gateway options, businesses use PayPal because it’s the industry standard and customers love to use it. One of the most important standout features for PayPal is its enormous footprint. Network effects are essential to a payment tool and, in PayPal’s case, it’s far more the norm than the exception that both a seller and a buyer will have a PayPal account.PayPal is currently in over 200 countries, and there are nearly 200 million active account holders. Entrepreneurs have found that when they add “Checkout with PayPal” options to their websites, that conversions increase.

That’s because of the added security consumers feel when they find PayPal on a site. B2C startups tend to offer PayPal as a payment option, although in the overall tech space Stripe is more prevalent.

Customizable buttons

Using PayPal’s API and button builder, you can create buttons to include on your site to match your business and items you sell. Button text can range from “Buy Now,” “Subscribe,” “Donate,” and more. This makes PayPal a great solution for any business. There also have different options available for e-commerce business to have customers choose what kind of size and color for apparel.

Using the customizable drop down menus, it becomes easy for your customers to make sure they’re choosing the right product/plan. You get a maximum of 10 options using PayPal.

You can also add in mandatory text fields to get information from customers like their names, job titles, etc.

The customizable buttons make PayPal an ideal solution for any business or organization to receive payments from their customers.

Automatic billing

You can use PayPal to customize buttons to get people to subscribe to your product. That way you get paid every month or whatever your period is.

PayPal lets you automatically bill your customers if they sign up for that option. The automatic billing does not need any more confirmation after the payment is set up.

Online invoicing

With PayPal, it’s easy to create and send customized/branded invoices with their invoice builder.

It’s free to send invoices and track payments and manage from your PayPal account. The invoice builder is easy to understand and allows you to attach any related files or references, and bill multiple customers at the same time.

PayPal Here – Mobile Payments App

PayPal has a mobile payments app that lets you process credit card payments from anywhere. They have two types of card readers: a mobile card reader that only accepts credit and debit magnetic stripe cards, and a chip card reader that accepts magnetic stripe, chip card, contactless, and Apple Pay.

This is helpful for any entrepreneurs whose businesses sell physical products and are planning to do pop up shops or sell at events.

PayPal Complaints

Common complaints about PayPal regard its pricing. Many businesses find Paypal’s fees to be insanely expensive. Complaints about pricing rise for international payments. There's an extra 2.5% charge for currency conversion and 1% charge for international fees.

Once you reach a certain point in sales, it might make sense to become a traditional merchant account.

There have also been complaints about implementing and using the PayPal API. Startup founders have found the Stripe API to be much more developer friendly and easier to implement.

PayPal can get more expensive at scale as you do more business. It takes 2.9% from your sale, which can be a lot for large, expensive items. B2B businesses do use PayPal, but for that reason tend to prefer wire transfers or checks.

One of the most common complaints about PayPal deals with how the company freezes accounts without warning. PayPal will freeze your account if they suspect any fraudulent activity. Stories from users who've experienced this have many wary of PayPal, worried they could several thousands of dollars inaccessible.

A situation like that becomes terrible for a business reliant on its cashflows, like a consumer product or commerce business.

Its advised by users to make frequent transfers from their PayPal balance to their bank account in case accounts become locked.

Paypal is known for its buyer protection, and it appears to be a zero-sum game between pleasing buyers and sellers for PayPal. Buyers have a lot of rights when it comes to refunds and cases, where sellers feel like Paypal is leaving them with the short end of the stick. Sellers have complained about limited options when it comes to cases resolving customer disputes, and sometimes having evidence the buyer is laying a false claim.

Useful Integrations

PayPal is a widely used payment gateway, with several integrations already set up with popular e-commerce platforms like Shopify. PayPal is currently working on PayPal Commerce, which will make for an easy turnkey solution to create an e-commerce site.

You can also find other popular integrations with accounting platforms like Quickbooks, Xero, Freshbooks and more. This makes it easy to log and transfer payments, manage invoices and do away with manual data entry depending on the integration.

PayPal also integrates nicely with MailChimp, allowing you to add “Add to Cart” and “Buy Now” buttons to your email newsletters. The integration can also sync new PayPal customers to your MailChimp list.


We give it 4/5 stars. You should use it.

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