Money / Payment & Collections

Everybody Loves Paypal

If you randomly walk up to anyone who might fall in the age demographic of 18-34, ask them about PayPal, chances are they know what it is and have a registered account. Most business owners we encounter simply have the PayPal option for their customers and only know this option to be their preference.

PayPal is not your only option, there are as we discussed in our Payment Gateway series thus far. However the company is America’s favorite right now.

PayPal has been in our faces, so to speak, for years. In addition, many shopping carts do not offer other options. Big shopping cart industry company, Big Cartel introduced Stripe as an option for users in 2013. Before launching, they tested it with certain users in beta form, and later implemented in all store fronts.

PayPal was once the monopoly, but now the market is flooded with competition.

What is PayPal an option for my e-commerce?

As we’ve established, PayPal is one of the most popular and recognized payment gateway options with small business owners and consumers. PayPal started off as X.com and was acquired a couple years later by Confinity. The most popular name attached to PayPal is Elon Musk. However there are four other major players that help get Paypal its start too; Peter Thiel, Max Levchin, Ken Howery, and  Luke Nosek. Elon ultimately made the decision to terminate other programs like X.com and solely focuses on PayPal money efforts. The company first got transactions off being tied to the payment option for bidding website commerce eBay.

PayPal operates in 190 markets and manages more than 232 million accounts. The company allows customers to send, receive, and hold funds in 26 currencies worldwide. This allows the company to easily be the most recognized gateway acknowledged and usually the choice for your customers to process their payments through. They have built their trust as being one the first payment gateways of the dot com boom.

In early 2011, PayPal started requiring individuals to verify bank accounts, this way they did not exceed account-spending limits. A plethora of fraud was occurring causing the company to lose money and produce vendors whom were not being paid for merchandise shipped to their customers.

PayPal has multiple options: personal, business, premier and student. For the purpose of the e-book, we will focus on business.  PayPal fees are applied to sellers of merchants. You will pay 2.9% transaction on the total cost of the sale plus a $0.30 fee per transaction.

Your account can be operated under your name, you will be provided with a separate email account for customers to contact you regarding service issues, but also allows your employee’s limited access to your account. Furthermore you have a variety of payment checkout options.

Options include: standard, advance and pro. In addition to this, they offer PayPal here and PayPal digital goods.

PayPal Here Card Reader is their mobile payment option that competes with Square and Inuit, just to name a few. If you are doing pop-up shops, trade shows, or more, your customers can pay you right there with a swipe of their card.

  • 2.7% Transaction fee
  • Funds immediately in your account
  • Register multiple e-readers to account
  • Integrated mPOS system

PayPal Digital Goods is their payment option to sell goods such as e-books, e-courses, music, gaming, media and more. This option is mainly used for content that is online and not a physical product.

  • They offer two different options: express checkout and adaptive payment. Depending on your company’s transaction rate, this will determine the base fees for your company. Ranging from 1.9% to 2.9% for per-transaction and then your micro-payment stays at 5% + $0.05 pricing per-transaction.

Also a point of note, sign up for PayPal Business Debit Card to have instant access to your account plus enroll in their cash back program. All this information can be found on their site.

PayPal Pro’s

  • Most recognizable payment gateway
  • Low transaction fees
  • Standard with a majority of shopping carts
  • Multiple gateways to help you scale your business

PayPal Con’s

  • Tend to side with customer over business
  • PayPal digital goods not integrated with all sites.
  • Most popular way scammers steal money from individuals
  • Accounts can be frozen without noticed if large sums of money are being submitted.

Did you miss our other post in this series? Don’t forget to check them out {Payment Gateway and Direct Payment}. Are you a PayPal user? Did you know they had a card reader and business debit card?

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Imperfect Concepts is the premier destination for the creative women business owners looking for how to guides, tips, motivation & inspiration.

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