Information About PayPal

PayPal is an e-commerce business allowing payments and money transfers to be made through the Internet. PayPal serves as an electronic alternative to traditional paper methods such as checks and money orders.

A PayPal account can be funded with an electronic debit from a bank account or by a credit card. The recipient of a PayPal transfer can either request a check from PayPal, establish their own PayPal deposit account or request a transfer to their bank account. PayPal is an example of a payment intermediary service that facilitates worldwide e-commerce.

PayPal performs payment processing for online vendors, auction sites, and other commercial users, for which it charges a fee. It sometimes also charges a transaction fee for receiving money (a percentage of the amount sent plus an additional fixed amount). The fees charged depend on the currency used, the payment option used, the country of the sender, the country of the recipient, the amount sent and the recipient's account type.  In addition, eBay purchases made by credit card through PayPal may incur a "foreign transaction fee" if the seller is located in another country, as credit card issuers are automatically informed of the seller's country of origin.

5 Benefits Of Using PayPal

Here are five good reasons why you should consider PayPal.com as your credit card processing solution and merchant account alternative.

1. Accept Credit Cards Without a Merchant Account

You can accept all major credit cards as well as payments from bank accounts. Your customer doesn't have to be a member of PayPal to pay by credit card.

2. Low Cost for Some

There are no initial or monthly fees to join PayPal. Fees are 2.9% of sales and $0.30 per transaction; rates vary slightly by country and sales volume.

3. Flexible and Easy to Use

PayPal payments can be made in six different currencies for digital or physically shipped products, auctions, services, recurring payments (like subscriptions), et cetera. As well, PayPal is very easy to use and setup.

4. Merchant and Auction Tools

PayPal has a number of automated tools to make your life easier including financial reporting, shipping calculation, sales tax and value-added tax calculation, and much more. Since PayPal is an eBay company, it is designed to integrate well with eBay auctions.

5. Fraud Detection

PayPal claims to have "one of the lowest loss rates in the online retail industry." Their Seller Protection Policy is designed to protect the merchant; their Buyer Protection Policy is designed to protect the customer.

7 Drawbacks Of Using PayPal

You may have been introduced to PayPal through buying and selling on eBay or another online site. If you're new to selling online, you may find it appealing to handle your merchant account services through the provider you already know. However, there are significant reasons you may want to consider alternatives to PayPal for Internet credit card processing on your ecommerce site.

1. If you do use PayPal, be very careful with e-mails that purport to be from PayPal representatives. Many of them are fraudulent.
2. PayPal is authorized to seize money from merchants' accounts in the amount of a disputed transaction until the PayPal dispute is resolved. If the other party fails to communicate, this seizure can last up to 30 days.
3. PayPal's alliance with eBay means that if there is a problem with your PayPal account, your eBay account may also be suspended.
4. PayPal's functionality is limited, meaning you may not be able to organize quantity pricing or shipping options the way you would like.
5. PayPal's verification process is time-consuming and can delay your account's availability.
6. PayPal’s fees can add up for high volume stores.
7. Some website users will have difficulty paying you by PayPal. This occurs especially when the user has an inactive PayPal account associated with their email address or when they wish to use a credit card other than the one listed in their PayPal account.

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