There are many different ways to accept payments for your small business, with one of the most popular methods being PayPal. In this blog post, we will discuss the pros and cons of using PayPal to take payments from your customers. We will show you how Paypal works so you can use it successfully for your small business.
Pros of Using PayPal for Your Small Business
1. Easy to receive payments
PayPal is one of the most convenient ways to take payments from your customers. All you need is an email address and a credit card or bank account, and you can start accepting payments right away.
If you own a services business, you can invoice through PayPal and your customer can pay you with just a few clicks. You can then automatically transfer funds to a bank account or use them to cover business expenses.
If you run a products business, you can add a “Buy Now” button to your website or blog by implementing PayPal’s API. Your customers can then pay without ever having to leave your site. PayPal also offers a mobile app that allows you to take payments from anywhere. This is great for businesses that do a lot of traveling or have pop-up shops.
2. Pay employees anywhere
When it comes to paying remote employees, PayPal is a great option. You can send money to anyone in the world. This is convenient for businesses that have international employees. You can also use PayPal to pay contractors or freelancers for services rendered. This is fantastic for keeping track of expenses and making sure that you are only paying for the work that has been completed.
3. Safe and secure
All payments are processed through PayPal’s secure servers, so you never have to worry about your customers’ information being stolen. PayPal also offers buyer protection for purchases made through the platform, which is great for eCommerce businesses. If your customer doesn’t receive the item they purchased, or if the item is not as described, they can file a claim and get their money back. IT security for your business is of utmost importance, and PayPal helps you to take care of that.
Cons of Using PayPal for Your Small Business
1. Fees
One of the biggest drawbacks to using PayPal is its fees. PayPal charges a fee of $0.30 + 2.90% per transaction. This adds up quickly, especially if you do a lot of business through PayPal. For example, if you make $20,000 per month through PayPal, you lose out on at least $580. This could be the equivalent of an entire sale or more.
2. Disputes can delay refunds
PayPal typically takes around 30 days to investigate disputes and issue refunds. This can be a big problem if you are waiting on a refund to pay your own bills. When it comes to customer retention, creating a good customer experience is paramount.
If your customer needs to wait 30 days or more to get a refund, they are likely to be very unhappy. This can negatively impact your business, as unhappy customers are likely to leave negative reviews or take their business elsewhere.
Endnote
PayPal is easy to use, safe and secure, and it offers buyer protection. Its diverse payment and financing options make it a good choice for businesses of all sizes. However, the fees can add up, customer support can be limited, and disputes can delay refunds.