Good question. Several years ago one would be asking why anyone would choose to use PayPal. It was a young business, there were reports of people having trouble getting paid, or their payments to others taken without receiving their merchandise. PayPal support to help you get your money back was a bit unsatisfying. The tools were fairly primitive, and hard to setup. Even today you still find sellers who are not willing to take PayPal payments on their auctions.
Today, we’re not dealing with a new company that is primitive and immature. PayPal has grown to be a widely accepted company for many websites, even outside of eBay. It has become so attractive and widely used that it was acquired by eBay in October of 2002 and is a standard offering option for Sellers on all eBay auctions.
Before PayPal was acquired by eBay, I went shopping for various Merchant Accounts so that I could take credit card payment for a product line that I was selling at that time. Being a small business owner and competing in a highly competitive area, I quickly discovered that I could not afford what I thought were the “better” options available at that time. As a small business owner, PayPal offered the best value for the money then, and it still does today. Even websites that use more the more expensive credit card processing companies generally offer PayPal as a payment option. Why? It provides yet one additional means for individuals to pay using electronic check, PayPal Balance funds, or by any of the major credit cards. PayPal also offers an option for a small monthly fee that will enable you to take payment by phone, mail, email, FAX, or person-to-person.
If you haven’t setup a business banking account, you’ll want to consider doing that before setting up a PayPal account so that you can transfer money directly into your business bank account, however, if you need to put this off until later, you can always go to your PayPal profile and enter Banking information at a later time.
PayPal has many features that automate the business process. Here are a few of the features that make PayPal so attractive to not only eBay sellers, but internet business owners:
For auctions you can set PayPal up to:
For your website of auction business PayPal offers a Post-Sales manager. With this tool, you can:
PayPal also has a build-in shipping center where you can:
PayPal provides great Reporting Tools which give you the information needed to effectively measure and manage your business. Using PayPal's Reporting Tools, you can:
PayPal also has a nifty tool that you can use to determine how a PayPal account compares to competitor Merchant Account offerings. It’s found on their Merchant Rate Calculator Page. While the Merchant Rate Calculator Page uses a standard comparison value to show you an average of how PayPal stacks up, it also allows you to enter the fee structure of a PayPal competitor to see what your costs for a competitor’s plan will be over a year’s period of time as compared to PayPal’s cost for the same number of transactions.
Generally a business getting started can just use PayPal’s Website Payments Standard option, however once your business begins to exceed $3,000 per month, then it will be necessary to apply for the PayPal Merchant account. This doesn’t cost you more. It actually allows you to receive reduced fees for transactions exceeding $3,000 per month.
Even if you decide to use another merchant account, you’ll still want to offer the PayPal option to your users as it is the most widely accepted method of payment for the eBay auction site today.