Simplify Life, Improve Security with PayPal

By Kevin M

I’ve been a PayPal customer for a few years, and have become so accustomed to its advantages that I hardly notice anymore. But by definition, a service is outstanding when it is so efficient that you use it and never think about it. Perhaps that’s because you never need to think about it!

After all, it’s the squeaky wheel that gets the grease, not the one that’s functioning efficiently.

My wife and I signed up with PayPal a few years back when we wanted to begin selling our kids old toys on Ebay. It’s been a pleasant ride since.

Ease and Security

Make a payment via PayPal, and you won’t need to spend the several minutes it takes to enter your name, address, phone number and credit card information for each purchase you make over the web. An increasing number of web based businesses are using PayPal for all of the reasons I’m writing about here, and all you need to do to make a purchase is to enter your email address and PayPal password, then procede to check out. That’s all there is to it. No account numbers, no expiration dates, no secret codes from the back of your card.

There’s so much concern these days about identity theft, and it’s worth noting that every time you send a check or give out your credit card information, you’re creating an additional opportunity for a would be thief to obtain your information and identity. With a PayPal account, the merchant receives payment from you without ever knowing anything about your bank account or credit card.

Here’s another cool feature: you can send money to or receive money from anyone just by sending an email. The recipient will need to either have a PayPal account, or can sign up for one, which is incredibly easy. If you have a child living away at college or in a distant city, this can make sending money quick and easy, saving you money on bank wire transfers, credit card fees or even the postage it takes to mail a check.

Fees

Many of the services offered by PayPal are free, and others carry only nominal fees. Much depends on the plan you sign up for, and whether it’s personal or business, and which one you take should depend entirely upon your personal needs.

For starters, on the basic plans at least, there are no set up fees and no maintenance fees.

When you make a purchase with PayPal there are no fees to you as the buyer. Of course, if your account is direct linked to your credit card account, there will be the fees incurred through the issuer of the card, but none through PayPal itself.

If you send or receive money to/from another individual and the transaction is run through your bank account or from a PayPal credit balance there is no cost for the transfer. (Fees will apply if you make the same transaction using a credit card.)

See Transaction fees for domestic payments for complete details and variations. Also click on the View Cross Border Transactions Fee link on the same page to view fees on receipt of payment from foreign sales.

If You Need to Take it to the Next Level

With a large number of people starting small businesses, many of them on the web, PayPal offers outstanding benefits.

Trying to run a business without accepting credit cards can put you at a decided disadvantage, but trying to establish a merchant credit card with a bank can be difficult and maybe even impossible for an upstart business.

The application process with PayPal is pretty simple and all you need is a primary bank account, plus a secondary account (bank or credit card). PayPal will validate the existence of your account, which they’ll do immediately, then you’re ready to roll.

With a PayPal account you can easily handle international transactions—which is increasingly important—as well as accept credit card payments directly from customers who don’t have PayPal accounts. (I believe there is a current limit of two credit card purchases received per non-PayPal customer at this time.)

There are a variety of plans available for merchant accounts, but generally speaking, the fees associated with receiving payment on the sale of products or services starts out at 2.9% of the dollar amount of the sales proceeds, plus 30 cents per transaction on total sales of up to $3000 per month. So on a $100 sale, the fees will total $3.20—a small price to pay for a guaranteed payment.

Above $3000 the percentage drops on a sliding scale as volume increases. You may be able to get a better deal through a bank, but when you’re just starting out PayPal has the advantages of being simple and predictable.

And even once you’re up and running, offering PayPal will be a way of transacting business with customers who have PayPal accounts, but no credit cards, without you having to wait for checks to clear your bank.

Again, click through on the link in the above section in order to determine the plan that will work best for you and the fees associated with it.

Concluding Thought

You can go just about as far as you like with PayPal since they offer a variety of merchant accounts (with various terms), and also offer an actual credit card and even a money market account if you like.

If you have a PayPal account would you recommend it to others? If so, why?

Leave a reply