PayPal

What we liked:
As eBay is one of the main reasons most people need to accept online payments, it’s a massive boon that PayPal (which the auction giant owns) works so well with the service. If you want to sell the occasional item from your own website, or set up a full shopping-cart system, PayPal makes it easy to do so – you can send money to anyone with an email address in 55 different countries. Setting up an account and sending money is completely free of charge and it’s also free to transfer £50 or more to a UK bank account (there is a 25p charge for transfers of under £50).

Both buyers and sellers are protected against fraud, and because the company has UK offices, it’s always possible to speak to someone should the need arise. For any type of selling, the process of calculating costs, issuing invoices and determining postage information is virtually automated, significantly reducing the amount of time that needs to be spent on administration.

But the beauty of PayPal is that it works efficiently for both buyers and sellers. As with eBay’s feedback system, PayPal provides member information so that buyers can learn a little more about a seller’s track record before committing to a transaction.

How it can be improved:
Disputed transactions can take some time to reach a resolution, while frequent sellers may feel that the fee of 3.4 per cent (for sales under £1,500 per month) plus 20p per transaction is a little high. The total can certainly mount up. The layout of the website could also be improved, as some useful sections are awkward to get to.

Our verdict:
PayPal is far and away the most universally recognised online payment system – and with such a crowd-pleasing level of user-friendliness, it’s easy to understand why it has proved so popular.

Reviewed: Issue 164 (21 June 2007 - 4 July 2007)