To PayPal, or not to PayPal?
PayPal is an extraordinarily powerful tool which lets merchants accept payments with ease.
PayPal manages over 184 million accounts worldwide, making it the dominant force in payments acceptance.
PayPal Pros
1. Pricing- PayPal uses straightforward flat-rate pricing which makes it better than many merchants which use tiered or ERR pricing (huge rip-offs) but not better than merchant accounts that also have flat rate pricing or interchange plus pricing.
2. Cost- For many businesses starting out, PayPal may be the cost effective payment processing option. However, once volume gets higher, it becomes more cost effective to switch to a traditional merchant account provider. Use the PayPal Upgrade Calculator to quickly see whether it’s time to consider a merchant account. Learn more about switching to merchant accounts here.
3. Recognition- PayPal is universally recognized and can therefore reduce customers’ fears of fraud.
PayPal Cons
1. Poor Customer Service- PayPal has been known to be unresponsive and downright evasive when it comes to customer service. Good luck trying to find a customer service phone number on their site. (We found it on this site)
2. Customization- PayPal has standard options that don’t have many of the features of a traditional gateway. For example, some gateways have APIs with more specialized capabilities like tokenization and/or the ability to qualify for industry specific interchange categories.
3. Rules- When you play with PayPal, you play by their rules. They can freeze your account, withhold funds, or take money out of your account for no reason. Also, funds are deposited into your PayPal account instead of a personal bank account which you control.
In conclusion, sometimes PayPal may not be the best choice to meet your payment processing needs. Doing a careful analysis and researching alternatives may save you money in the long run. If you have any questions, please don’t hesitate to reach out to me at Stella@TransFS.com
TransFS.com is the comparison shopping site for credit card processors. Just like getting multiple quotes for airfare using Expedia, TransFS lets business owners compare top quality processors on an apples-to-apples basis and makes sure they get the best deal by not having any cancellation or hidden fees, and only interchange plus pricing.
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Hmmm.
I use paypal for all of my freelance writing payments. I don’t really mind that they take 3% off the top. The service is quick and easy.
My only customer service experience with them had to do with them blocking the debit card for what they had deemed “suspicious” activity. It was a bit of a nightmare and required several calls to different numbers to get the issue resolved.
Other than that, I’ve had no problems with them.
George
George Angus´s last blog ..The Virtual Book Tour For PROJECTMANAGEMENTtweet
I definitely agree, that paypal is convenient, sometimes to convenient for my wife and her ebay addiction
George’s Unsecured Business Credit´s last blog ..Business Lines of Credit Part 2
I use Paypal for one of my information products and have had no problems so far.
However, I’ve heard of reputable people having their accounts frozen. Most recently a very well-known blogger had his account frozen because he apparently had too many sales in a short period of time — right after he released a new ebook.
John Soares´s last blog ..Consolidating Your Online Marketing Base
Wow! I just know that the rules of Paypal are can freeze our account and take out our money without any reason. That’s a serious problem. I think i will not keep too many money in the Paypal account anymore. Thanks a lot for the sharing!
Kok Siong @ Cancer Research´s last blog ..Oncogenic Transcription Factors Involve in Acute Leukemia
I have heard many horror stories about accounts being frozen, and checking accounts having funds withdrawn because of fraudulent activity on the part of someone else. Buyers stopping payment from their credit card company, six, eight months after the purchase without returning the item or filing an ebay/PayPal dispute, and PayPal allows it. A quick google search on PayPal problems is enough to scare me away from using it regularly.
PayPal makes it easy for start up website or freelancers like George. When I do side projects it helps with name recognition. I also agree that if this is how you make your money it would be a concern with playing by their rules.
All in all it is a good solution, just don’t count on it for your food and rent money, you never know when they will put a hold on your account.
Rob
Rob SBA Financing´s last blog ..Financing a Small Business – Do’s and Don’ts
This is another article that touches on this very same topic: http://hubpages.com/hub/A-Merchant-Account-Provider-VS-Paypal
Ahh…Paypal. I have a love/hate relationship with it. I love it because everyone uses it, which makes it easier to setup websites to accept Paypal for payments. I hate it because of all of the rules and the fact of never knowing whether or not one small transaction will get your account frozen.
For example, I have a decent amount of transactions that are very similar each month, but the moment I make a transaction that I usually don’t make via Paypal (like an emergency situation where I use my Paypal card at a gas station to fill up on gas), I have to go through 20 different steps to prove that I was the one who made the transaction. I know it’s “added protection”, but it seems this always happens when I have a BALANCE in my account, not when it’s close to zero. Even my credit card companies don’t go this far. Or how about the random account limitations every now and then? Just another pain of having a Paypal account.
When it all comes down to it, while there are a lot of other payment options, Paypal has been around for years and people are comfortable with it. So, for that reason alone, that’s why I use it the most. Just hate those little hold ups here and there.