PayPal tool provides checkout at merchant sites

By Dawn Kawamoto Staff Writer, CNET News.com - The software, Website Payments Pro, allows an individual merchant to control the checkout procedure as PayPal processes the transaction in the background. While the new offering will bring greater customization capability to merchants, it will also be a source of higher fees for PayPal.

PayPal is charging $20 monthly for Website Payments Pro, plus fees of 2.2 percent to 2.9 percent per transaction, along with a flat fee of 30 cents per transaction.

Merchants using PayPal's traditional service pay no monthly fee, and their per-transaction costs are between 1.9 percent and 2.9 percent. They too pay the flat fee of 30 cents per transaction.

Previous Next Merchants using PayPal's new tool, however, will get a break when receiving orders and credit card payments via phone, fax or mail order. These merchants will have access to something called "virtual terminal," which makes these transactions free. The traditional service charges $20 a month for it.

The new product is being unveiled as PayPal's parent company, eBay, undergoes growing pains and looks for ways to keep its revenue stream strong.

In January, after the company reported its year-end financial results, its stock took a 19 percent hit. eBay had forecast slowing revenue growth of approximately 33 percent for the year, compared with the 51 percent growth it posted for 2004.