As a Website attorney, Internet marketers are always asking me about the pros and cons of using different systems to sell their products and services online. Here’s my take on the pros and cons of using PayPal v. ClickBank.
ClickBank (not really a bank) is popular for newbies with digital products. ClickBank handles just about everything, including your affiliates, but the fees are relatively high and you should expect many refunds because cheats who want your product but have no intention of paying for it. Because ClickBank controls the refunds, you’re essentially screwed by con artists.
Frankly, I no longer use ClickBank for digital products because of the number of people who cheat the system. If you’re going to use ClickBank, limit it to selling your low-dollar entry level eBooks and special reports.
PayPal offers you more control and many online purchasers prefer to use PayPal. In fact, if you get your own shopping cart with a merchant account, you’ll still want to add PayPal as an option or else you’ll hurt your conversions. Although PayPal doesn’t handle your affiliate program for you, you can use the “mass pay” feature to compensate your affiliates all at once simply by uploading one file each month with the email addresses and payment amounts for each affiliate.
PayPal doesn’t like sudden spikes in traffic that you see with a product launch and can freeze payments because of suspected fraudulent activity. You or your Website attorney may get to deal with client support if you have a big jump in sales or if a client claims they paid you with PayPal but didn’t receive the goods as promised.
To your online success!
-Mike the Website attorney
P.S. My law practice uses a combination of PayPal, bank wires, and business checks. However, my businesses use a branded version of 1ShoppingCart combined with a merchant account from PowerPay … They work well together because PowerPay understands online product launches (many big marketers use them) and handles spikes in sales without freaking out and freezing your account. However, PayPal is always included as an option because almost half of our clients will choose it in the shopping cart.