I have to disagree with this statement. The difference is although this information has to be entered, one is stored in an account and the other is not. Many customers feel that creating an account with their personal information "stored" somewhere poses a security risk or hassle and turns them away from a sale. This happens whether its Paypal used or not.

I certainly understand this as a customer. I'm sure that most of us have purchased items online and have seen that some vendors require you to set up an account with their store before allowing you to complete your purchase. I don't know about you, but this turns me off unless I just can't get that item somewhere else. There's really no reason for that vendor to hold on to your personal information except for their convenience. The better vendors in my opinion provide you with an option to create an account or skip it. What I'm describing here has nothing to do with Paypal, it has to do with the customer's experience and their perception of what is taking place.

For example, a wonderful company I often deal with is B&H Photo which happens to be the largest photography gear retailer in the nation. When you make a purchase on their website it gives you the option during checkout to create or login to an account, pay with Google checkout, or skip login and pay with a Credit card, Paypal, Google, or money order etc. The orders can be even tracked without creating an account with them. I happen to have a PayPal account, but I do not create an account with B&H to use it, or is it even necessary for me to create a PayPal account for me to pay for the item. This is a great customer experience. If the customer purchases from this vender often and wants to create an account so that future purchases are quicker and so they don't need to reenter their information every time, that is purely up to the customer.

Any company that creates the perception of placing its customers first will always have an edge over those that do not.

I happen to like this software and the ease of use. I purchased it and I think it’s a great product. However, I cannot use it because of this issue and its potential to drive customers away.

I must agree with BF here. As a customer who does the bulk of his shopping on the Web, I would avoid a vendor who insists on retaining my credit card info unless I had no other option (and not buying an item at all is certainly an option in most cases).

On the flip side, I consider PayPal to be at least as secure as any company (just using my debit card at a grocery store resulted in my number being compromised by a database hack, so online companies are no riskier than any other) and use it whenever possible to minimize my actual card number floating about. I also understand PayPal had some bad early press, and many do not trust it at all, so forcing it on potential customers can be another big red flag.

To flip sides yet again, methinks CF software is geared towards the do-it-yourselfer who needs basic functionality without spending big bucks on a professional coder to set things up for them. It's not going to work for everyone, no matter how many bells and whistles they add.

Keep in mind you have other options here, Google checkout does not require an account. So I recommend this option to you if you are concerned your customers would shy away from Paypal. That's why I bought the module.
You sort of made my point though when you said you have a Paypal account. Most frequent buyers on the internet do have a Paypal account for the protection and ease of use it provides. Personally, the reason I use it myself is because I can have the money drawn from my checking account instead of a credit card. I read that 85% of frequent internet shoppers have, and use, a Paypal account, including myself(and you).

The rest of the world doesn't have the luxury of the Google Checkout.

That may be, but I would bet a lot of them have Paypal Accounts already. I understand a lot of you aren't from the US, but take it from me, a paypal payment is your best bet to not have a payment reversed due to fraud. I went through an incident last year with a couple of fraudulent transactions that were approved by my CC provider and then reversed, even though I had an agreement signed by the buyer and used address verification and the CVV security number from the back of the card. After going through that and losing $2000 I determined that I wouldn't accept payment through anything except Paypal or google checkout. They are your best bet to not having any charges reversed.

Agree with BF regarding B&H Photo - I've used other vendors who provide the same type of option (create an account or purchase without) and it's customer friendly. I use Pay Pal as well Craig, for the reasons you describe, but requiring someone to use Pay Pal is not a good business practice. I don't want to restrict myself to the "85% of Pay Pal frequent internet shoppers" but to 100% of ALL internet shoppers. I haven't looked at Google Checkout but I will - thanks.

I have had e-commerce sites for ten years and only about 15% of my customers choose Paypal to complete their transactions...and I offer a 2% discount when they do! I have a Paypal debit card and like getting paid quickly...and my costs with the 2% are often almost equal to the high fees us merchants pay for those "bonus" air mile and gasoline cards. Seems more and more people are using those "special" cards these days!

Still, if you are collecting credit card information, yes, it must be secure...and even more so now with PCI-DSS compliance issues.