Small businesses (especially new businesses) often struggle with getting paid. Bank accounts, checks, credit cards, cash, etc. The payment options seem endless. For ease of use for the end user many businesses choose to accept credit cards. For a small business this can lead to some roadblocks as you typically need to have a merchant account, a payment gateway, etc. For the non web savvy out there this can be a daunting task. Luckily there is another way: PayPal.
PayPal is a service that, "Allows members to send money without sharing financial information, with the flexibility to pay using their account balances, bank accounts, credit cards or promotional financing." There are nearly 100 million users of the service to date conducting business the world over in 25 currencies. Oh yeah... did I mention that it's free to sign up and there are no monthly fees?
The real beauty of this service for a business owner is that it allows you to accept credit card payments for your business. With a couple of quick clicks, you can create a button to place on your website for a specific product, multiple products, recurring payments, donations, etc. There are no fees to PAY someone with PayPal, but if you're ACCEPTING payment there is naturally a fee schedule. These fees are slightly higher than if you set up a merchant account and accepted credit cards that way, but with PayPal you don't have to worry about any of that... it's taken care of for you.
To see a payment button in action click here.
A Couple Of Considerations
PayPal allows you to link directly to a bank account for easy withdrawals from your account (again with no fees). Additionally, you can request a check from when you want to withdraw funds.
If you're an eBayer you probably already know PayPal. eBay owns PayPal and as such it is the preferred method of payment on the popular auction site. The integration between the two sites is flawless and makes online shopping through eBay a breeze.
If you do a lot of foreign online shopping your PayPal account will be your best friend. You can choose which currency to pay in and the conversion is done for you. Very nice.
Finally, if you're worried about security and fraud protection PayPal is second to none. They really do go out of their way to ensure that your money is protected and they offer many avenues for you to report and fix any potential problems. Purchase protection, seller protection and giving you the ability to buy AND sell without sharing any of your personal financial information are just some of the things they've got in place.
With all of the pros of PayPal I also wanted to point out a couple of cons. Note that eBay/PayPal is not a bank (even though they offer credit cards, and other "savings" type products. As such, they are not governed by the same regulators as banks and credit cards. PayPal is not FDIC insured which will concern some folks. Also, once you link your PayPal account with your checking/savings account, they have the legal ability to withdraw funds from your account in certain instances (charge backs, etc). This could potentially lead to an overdraft on your checking account if you're not careful. What I do is keep my PayPal balance relatively small by transferring money to my linked checking account on a regular basis. I then transfer money from checking into a non-linked savings account. I don't include this info to turn you off from using the service but wanted to make you aware of the potential risks.
If you have questions on using PayPal as your payment gateway for your online business or for personal use please contact us. We'd love to help!