The Pros and Cons of PayPal for Small Businesses
PayPal is one of the surest, fastest, and most efficient modes of payment you can use for your small business, but it’s also so much more.
PayPal can help you attract the attention of existing companies, increase your bottom line by managing costs, and extend your marketing options. It can also help your business to make payments for goods and services online.
To date, there are more than 87 million activated accounts linked to PayPal. That’s 87 million potential customers who can purchase products and services from you at the touch of a button. As incredible as this sounds, some retailers and other small business owners have reported drawbacks.
Below, we discuss the advantages and disadvantages of using PayPal as your online means for your upcoming business.
The Pros Of Using PayPal
The following are some of the reasons you should consider using PayPal for your small business.
1. Some Features Are Free of Charge
PayPal is completely free to use when you send money to friends or family anywhere in the world. Many options like Western Union and MoneyGram will charge a service fee for sending money to your loved ones, but with PayPal you can do it instantly and it won’t cost a cent.
2. It’s a Secure Means Of Payment
PayPal users are safeguarded against any form of online theft and irregularities. PayPal encrypts the end-users because it has access to all the customers’ data, and the data is updated frequently. Servers are entitled to check your browser and ensure that your details are up to date with their system.
PayPal users are safeguarded against any form of online theft and irregularities.
3. It’s Easy to Use
PayPal has easily set up options that enable their customers to do their shopping without facing any challenges. What makes it even more exciting is the availability of the PayPal iPhone and Android apps. Transfer of money is just a touch screen away. The vendor price options are customisable and easy to navigate.
4. PayPal Gives Massive Discounts
Yes, you heard it right. PayPal gives tons of discounts and freebies when you stay loyal to them. If you link your business’s PayPal account to your credit cards, every time you pay for expenses like airfare for business travel or lunch with a client with the linked cards, you’ll earn PayPal rewards.
The Cons Of Using PayPal
Everything that has advantages will also have disadvantages. PayPal isn’t an exception.
1. You Will Be Charged When Receiving Money
Paypal charges a whopping sum of 5-10% of the total price when you receive payments, primarily when you use PayPal to receive money from online retailers like eBay and other shops that use PayPal options.
2. Your Accounts May Be Frozen
PayPal may freeze your account, which means you won’t be able to transfer money to your bank account until you jump through hoops to prove your identity. If you have a large sum of money you’re counting on receiving to keep your business afloat, having those funds tied up can do damage to your company.
3. PayPal May Hold Your Money
PayPal may hold your money for up to 21 days to safeguard transactions. For some businesses, this will be an inconvenience, but for others it could be catastrophic. This is especially true if you’re counting on these funds to invest in more inventory.
4. Additional Bank Charges
Banks can be annoying at times, just saying it on a lighter note. Not all, but you might incur charges when transferring money to other banks. It is usually a fixed amount even if you receive a dollar in your PayPal account.
One of the things I like most about using PayPal for my small business is their business credit card. You can use it to make withdrawals directly without having to wait days for a bank transfer.
If you have subprime credit, you may be worried about qualifying for a PayPal business card. You can also learn more about PayPal business debit cards, which have options for those with low credit scores.
