[Merchant Account] Amazon Payments or PayPal?

PayPal and Amazon Payments are 3rd party processors, not merchant accounts.

A merchant account is something you get from a bank (or a merchant services provider underwritten by a bank). It lets you accept credit cards directly, not through any third party.

A merchant account is more complicated; typical fees include:

* Monthly statement fee
* Monthly customer service fee
* Monthly payment gateway fee
* WATS fees
* Cross border fees
* International service fees
* Non-qual/mid-qual downgrade fees
* AVS fees
* Batch settlement fees

In addition to over 200 different interchange rates for the regular transaction fee depending on what type of card is presented to your business.

The upside is that if you transact at least several thousand a month in payments, you can negotiate better transaction fees than a 3rd party processor might offer you. The downside is that figuring out what rate you pay is difficult, the rates can go up over time, and by accepting payments on your own site you're liable for compliance with PCIDSS (Payment Card Industry Data Security Standard).

That means at least having your own servers and quarterly audits of your server for security vulnerabilities. If you are not and don't employ a proper system administrator, you are not qualified to accept credit cards directly -- not that this stops some people. It's not something to take too lightly, though -- if you take credit cards directly, store any of the payment data in violation of the PCIDSS, get hacked and Visa finds out about it, your merchant services agreement allows Visa to fine you $500,000 per incident. That's half a million bucks.

As for your original question, use PayPal. More people in more countries will be able to pay you than if you only accept Amazon Payments. If you're worried about having your account frozen, actually read the entire user agreement, make sure you're not doing anything prohibited, provide excellent service so you don't have an unusual refund/dispute rate, and don't carry a large balance in your account.

There's a reason a quarter billion (with a b) people use PayPal. It works in more places than any other payment option, it's easy to use, you can get started immediately, and the pricing is actually great.