Over the last decade, PayPal has become a household name for anyone old enough to place an order online. Recent statistics show over 267 million active PayPal users worldwide. It is largely accepted as one of the most convenient ways to accept payment for online purchases. That being said, it does have its downsides. Here are some of the pros and cons of using PayPal.
Pros of Using PayPal:
Ease of Use
The steps it takes to start using PayPal are minimal. You sign up, verify your account, attach a bank account, and then convert that account to a business account. Within a few days, you can be accepting online payments.
Trusted by Many Consumers:
Most people who do any amount of online shopping or fund transfer already have a PayPal account. Whether they are using the app or a desktop, all of their information is easily accessible without having to dig through your wallet for a credit or debit card.
No Monthly Fees
Signing up is free and there are no monthly fees. This means that even if you have a bad month in sales, you are not obligated to pay for transaction services. PayPal does take a percentage of each transaction. So don’t forget to factor that into your prices.
PayPal will also allow online merchants to process recurring payments. This is great for businesses who have subscription services, meaning that the customer makes the same purchase each month. For those who use services like Netflix or Hulu, the monthly charge is often processed through PayPal.
When a customer uses PayPal they are taken to a separate site. This means that none of their sensitive information, like credit card numbers, ever goes through your site. This means less stress and stronger security for both you and the customer.
Cons of Using PayPal:
PayPal Often Sides with the Customer
This is hardly a con if you are on the purchasing end of PayPal, but depending on the type of transaction (especially for virtual services) it can be hard to prove receipt. Make sure you have a solid system to document your end of the transaction.
Need for Backup
PayPal should always be accompanied by another option for payment. One reason for this is because not everyone realizes they don’t have to have an account to use PayPal, thus they may abandon the checkout process if they think a PayPal account is required.
Not Offered Everywhere
Though PayPal is used in the vast majority of places where online transactions can occur, it is not absolutely everywhere. If your business sells products internationally, you will want to keep that in mind.
PayPal reserves the right to suspend your account without notice if they receive too many customer complaints or if you are selling products or services prohibited by their policies. This can be a problem, especially if it is unexpected.
Summary of the Pros and Cons of PayPal
You have probably noticed that a lot of your competitors use PayPal. For a lot of businesses, the pros outweigh the cons. That being said, you should always have a backup plan and make sure you are complying with their selling policies. A company that has great customer service and documentation will avoid many of the cons of using PayPal.
Is your business looking for the best way to accept online payments? Contact Tree Ring Digital and we will help you choose the best transaction solution to fit your individual needs.