PayPal Review

One of the most popular online payment methods is PayPal. The company was started in 1999 and is thought to be the first of its kind. PayPal is an eBay-owned company, so it is no surprise that the two are very connected. PayPal allows buyers to do so without sharing payment information, and provides businesses – especially small businesses – access to merchant account type services at a low cost.

PayPal has expanded so that it is now accepted at thousands of Web sites, providing payment services outside of eBay. Indeed, PayPal is the most popular third-party payment service, with Google Checkout lagging quite a ways behind.

Using PayPal in lieu of a merchant account

While merchant accounts are still very useful for companies with high volumes of credit card transactions, PayPal offers a viable solution for smaller businesses that are worried about cost-efficiency. Additionally, it is worth noting that PayPal also allows customers to link their accounts to bank accounts, so that credit is not even needed to complete an online transaction. Merchants who offer this attractive PayPal feature can have an advantage – especially with those customers who do not like using credit.

PayPal also has invoicing options. This makes it possible for you to easily create invoices and send them to your customers. Your customers can choose to pay you online, using their own PayPal account, or to send you payment in some other way. You can track payments made to you in the form of eCheck or some other method. It is easy to transfer funds into your business account using PayPal as well.

Another great thing about PayPal is that the company now offers its own debit card, temporary credit card numbers and even an interest bearing money market account. The PayPal money market account can help you grow your business earnings further. By putting your profits into the money market account, you earn interest and still have access to the funds.

With PayPal, it is also possible to accept payment in different currencies. The company will exchange the currency (a fee is charged, though), making it possible to accept payments in local currencies and do business around the world. However, many businesses in the United States prefer to accept payment only in U.S. dollars.

On the downside, our PayPal Review found that PayPal does have problems when it comes to disputes. The dispute process can be lengthy, and scams are becoming more apparent. PayPal also does not offer a great deal of protection from chargebacks. Another issue is that if you do not have a business account, instead relying on a personal account, you may find that you are limited in the types and number of transactions you can complete. You also may have to wait a number of business days for eCheck payments to clear. And it can take a few days for PayPal funds to transfer to your bank account. PayPal’s transaction fees are higher than those offered by Google Checkout. However, the fees are still reasonable and cost efficient in most cases.

Overall in our PayPal Review we found that  with the easy user interface and the widespread use and acceptance of PayPal, it can make a good alternative to a traditional merchant account. It offers a wide variety of services, and for many people, these outweigh some of the risks and inconveniences.