posted by WEBSITES.COM // March 24, 2009 // Build Your Website

For most companies just starting down the road to a successful, profitable e-commerce site, the viable options for setting up a robust and secure payment gateway will be limited. While the optimal solution would be to open a merchant account with one of the many companies offering this service, for smaller on-line vendors the costs involved can be prohibitive. By using PayPal as the payment gateway costs are kept to a minimum and integration is easy and painless.

So how does a new e-commerce site begin using PayPal? The simple steps below will provide the roadmap for setting up PayPal as a payment method for your e-commerce site.

1. Register an account with PayPal – For smaller businesses it may be possible to use the PayPal account of a private individual, although it should be noted that for tax purposes and easy expansion it makes sense to register a company PayPal account at the very start.

2. Set up an email account – PayPal requires funds to be sent to a specific email address which is associated with the PayPal account. Set up a specific email address such as payments@companyname.com to be uses specifically for all PayPal transaction through your e-commerce site. Add this email address to your PayPal profile.

3. Add your bank – Once your PayPal account is registered add your company bank account to your PayPal profile. This allows you to withdraw funds from PayPal into your bank account once e-commerce sales have been made.

4. Integrate with your e-commerce platform – Almost every e-commerce platform including the open source solutions such as Magenta, ZenCart and OsCommerce all contain built in functionality to integrate directly with PayPal. In many cases this will be as simple as specifying the email address associated with your PayPal account within the admin area of the e-commerce system.

5. Administer transactions – Once you have begun receiving order through your e-commerce site and have funds available in your PayPal balance you will need to monitor things carefully. Depending upon the type of business you are involved in and the types of products you sell you may find your PayPal account needs attention. The two most common situations which arise when using PayPal as a payment gateway are customers filing billing disputes due to goods not being received or being faulty and dealing with refunds to customers who have contacted you directly.

6. Cash out – Once you have reached a suitable balance, simply withdraw your PayPal funds to your company bank account. Once a certain level of transactions are being processed per month you may be eligible for better rates on transaction fees, so be sure to check the current PayPal rules regarding this regularly.

All in all PayPal is a simple, elegant solution for many small to medium sized e-commerce sites, simple to set up, easy to administer and of a fairly low cost. PayPal is also extremely secure, protecting not only your customers, but your own business.

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