What is PayPal? PayPal is a way of processing payments for your online business. Why should you accept PayPal payments? This article will review more detail about PayPal, merchant accounts, and the benefits of accepting PayPal payments.

When you are running an online business, you will have to decide how you will accept payments. There are many different merchant accounts out there, but they can get expensive. One of the ways many people get around having to pay for an expensive merchant account – at least at first – is to accept credit cards through a PayPal account.

An overview of PayPal

PayPal is a third-party payment processor. It was originally formed by eBay, for the purpose of convenience for auction buyers and sellers to pay with and accept credit cards. PayPal is a secure way to exchange funds, without the involved parties getting personal information. A customer can pay for goods and services without having to share his or her personal information with the seller, but still be able to use a credit card. This protects the buyer from possibly unscrupulous sellers who would steal information.

PayPal has expanded to being more than just a service similar to escrow. It is possible to accept credit cards when you have a PayPal merchant account, as well as accept eChecks and other forms of payment. Additionally, PayPal is accepted far beyond eBay – thousands of online businesses now use PayPal to accept credit cards and process payments.

Why use a PayPal merchant account?

One of the biggest reasons that many online businesses accept PayPal payments is because it is cheaper than most traditional merchant accounts that you would have to use to accept a credit card payment. You can still accept credit cards, but the fees are not usually as high as those you see with the regular merchant accounts. Many customers have PayPal now, and it can be a good way for them to feel comfortable connecting with multiple merchants, without having to give their personal information to several online businesses. Another reason for a PayPal merchant account is due to the features that are available when you accept paypal payments:

• Invoicing: PayPal makes it easy to create and send invoices, as well as help you keep track of who has paid their bills.
• Statements: Monthly statements are offered by PayPal to help you keep track of transactions during the month.
• Inventory: It is also possible to coordinate your PayPal account and invoices with your inventory.
• Transfer money easily: Using PayPal you can easily transfer your PayPal payments to your account.
• Fraud protection: There is a certain level of fraud protection with PayPal that can help you protect your business from fraudulent customers. However, it is important to note that in some cases it can be difficult to get issues of fraud straightened out when you accept payments through PayPal.

A PayPal account can have a number of advantages to you and your online business when it comes to accepting credit cards. However, you should be aware that some of your customers might be confused when they try to pay with credit card and are redirected to the PayPal page. (Those who have PayPal accounts and wish to pay with them will be expecting the transfer.) It is true, though, that more people are getting used paying with PayPal and other third party payment processors (like Google Checkout and Amazon PayNow) so that should help with accepting credit cards through PayPal.

PayPal offers many advantages to an online business owner. It is widely accepted, it is cost-efficient and it offers protection for you and your customers when you need to accept credit card payments.

MERCHANT ACCOUNT GLOSSARY TERMS