PayPal Account.  Good For Business???

POSTED BY: Rhett Baylies
Comparison of a PayPal Account and a Merchant Services account and which one is right for your credit card processing needs?

Before you can decide if you should use PayPal for your credit card processing needs

first ask yourself - What is PayPal?  Well in essence PayPal is a middleman enabling people or businesses to sell items on the web by providing credit card processing for a fee. 
PayPal is able to set individuals up with the ability to accept credit card payments online with nothing more than a bank account and credit card. This is because PayPal is a private company and not a bank.

Among the features that people like about PayPal are:

1. the ease of set up
2. no credit check
3. recognizable name
4. ease of integration with e-bay.

PayPal’s standard fees

shown below are offered with no monthly fee and no contract. In reality these are fair rates for anyone wishing to sell some personal items or those who do very little in the way of transactions.

$0 to $3,000 2.9% + $0.30
$3,000 to $10,000 2.5% + $0.30
$10,000+ 2.2% + $0.30

Now if you are a business owner and need either more functionality or fewer restrictions on your cash flow

you will need to upgrade your PayPal account. Depending on the functionality that your business requires not only will the above credit card processing rates increase but monthly fees will be added on as well. It is noteworthy to understand that most competitive merchant service accounts will have an average gross cost of less than 2.3%.     

To make well rounded decision there are a few downsides to your PayPal account to consider:

1. One of the biggest complaints about PayPal collection process is that PayPal will freeze your entire PayPal account regardless of balance in the event of a Charge-Back and hold those funds until it is resolved.  In some cases this has led to funds being frozen for years!  This practice and the fact that many PayPal account holders have had to fight for years to have funds released has led to long ongoing class action lawsuit that has yet to be resolved.
2. PayPal has notoriously slow and impolite service
3. Many consumers feel unsafe using PayPal since it is one of the most hacked and scammed sites on the internet
4. PayPal tends to set up good protection for its buyers and NOT its sellers
5. Since they are not a bank they do not have to adhere to FDIC regulation.

PayPal did not become the largest online payment collector bringing in more revenue than a lot of major Merchant Service Providers without providing a desirable service. So is a PayPal account the right service for your credit card processing needs?

Here is my opinion,

the ultimate goal of any E-Commerce web site is to maximize the number of conversions from people viewing the site to customers purchasing from your site.  At the same time, the goal of offering customers the capability to make a purchase with their credit card is to increase the number of sales and dollar volume of each sale.  The best way to accomplish both of these goals is to utilize the vast amount of products and higher service levels that a reputable merchant service provider (or credit card processor) can offer while also offering your customers the ability to purchase with PayPal.  It may become very clear, very quickly that a majority of your customers will opt for the traditional card payment method vs using PayPal, however, you will also find that there are some consumers who prefer to use their PayPal account.  Therefore, by using this dual payment approach you will guarantee that you have presented your customers with a payment method that they are comfortable with and this will increase the number of sales conversions on your website.

As always the Merchant Doctor encourages your comments and questions below and remember to join the Merchant Doctor at our FaceBook and Twitter pages.

About the Author: Rhett Baylies

After over 17 years in the service industry not only as an employee but business owner and corporate manager Rhett decided to start his career in the Payment industry with the vision of providing good honest service at a fair price. Rhett now applies his years of service focused business to his daily routine and looks forward to revolutionizing the way you look at your processing statement for many years to come.

Rhett Baylies's avatar
Jual Beli Alertpay Paypal Liberty Reserve
Jual Beli Alertpay Paypal Liberty Reserve | December 11 2011

really good

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