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I'm not advocating using them long term, I'm advocating using them to get yourself off the ground. There's no setup cost, and integration is fairly trivial.

It almost doesn't matter whether you can get your money down from Paypal. It matters whether you can persuade people to hand over their credit card. Not much point worrying about anything else until you can prove that, and paypal is a very cheap & easy way to manage that.

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The reason we did not go for Paypal first was handling the transition from Paypal subscriptions to a different payment gateway would be a pain. We didn't want two sets of funds. Knowing possibly we would probably not get our hands on the Paypal funds for a good 5 months.

Using an "abstraction layer" like Recurly or Spreedly would solve this problem for you (although you would have to convince PayPal to accept payments without CVV numbers, which is an extra couple of hoops)

Why not have both? I wonder if your concern is pre-mature optimisation as well.

I don't have any hard data, only my own experience, but I think some customers prefer PayPal. I added it as a payment option to one site and they now get approximately 30% of their payments through PayPal.

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