Direct Checkout

There's been a lot of talk on the Etsy forums lately about Direct Checkout (DC). Some sellers don't mind it, some refuse to use it and others are hesitant. Across the board, I haven't really seen many people say they love it.

So what is it? 

Etsy wrote up this little help article about DC, but in short it's Etsy's way of bypassing PayPal and collecting the fees themselves. After hearing about Regretsy's experience with PayPal, I was relieved to have an alternate for my business. So let's see what Etsy does different than PayPal.  

DC processes buyers credit cards directly on the Etsy platform. In the past, some buyers got confused with PayPal--not realizing they didn't have to make an account with PP just to pay with their credit card, so it's a good idea. Not to mention sellers no longer have to have a PayPal account to sell on Etsy because you link it straight to a bank account (similar to PayPal).

DC charges a processing fee of 3% + $0.25 per order. 

PP charges a processing fee of  2.9% + $0.30 per transaction. 

DC doesn't give the seller access to funds until 3 days have passed since the order was purchase and until the order has been sent out. If sellers make custom items or made-to-order items their funds won't be accessible until they finish the order and mail it out. 

PP allows the seller to have access to the money instantly. 

DC automatically deposits money in the seller's bank account on Mondays or allows sellers to manually transfer funds to their bank account before Monday, if funds are available. 

PP allows sellers to use the funds directly from their PayPal account or allows sellers to transfer money manually into their bank account (3-7 days). Sellers have instant access to their money to make online purchases or by using their PP debit card--which they can use at ATMs and in stores. 

DC does not offer a way to pay for postage. (They are working on this, if you want access to try it join the Shipping Improvements Team) 

PayPal has a "ship it now" button, making it easy to print postage from home. 

Sellers can send partial refunds but not invoices through DC. 

Sellers can send partial refunds and invoices through PP. 

Overall, the fees are comparable, however, PayPal offers more services that Etsy does not.

The shortest amount of time it takes to get paid with Direct Checkout is 3 days + 3-7 days it takes to transfer into your account. Total 6-10 days if you mail out the order within 3 days. 

With PayPal funds are available instantly. 

This is what it used to look like when sellers accepted PayPal. The visual implies you can pay with credit cards by paying with PayPal:

This shows what it currently looks like when a seller accepts both Direct Checkout and PayPal as a shipping methods. The visual implies paying with a credit card is a separate option than paying with PayPal. I think it's a bit deceiving, and especially harmful for the shops that don't accept DC.

I offer both in my shop, but as a business owner, I currently prefer PayPal. I hope that Etsy listens to its sellers and continues to change Direct Checkout to make it the preferred way to receive money.