Guest post by MarkupBox.
Now a days when technology is suppressing the world and everything is available online, there are tons of ecommerce stores that cater to different user requirements. Paypal has become an integrated aspect of online business. Every ecommerce store needs to have a robust and flexible payment system which should be reliable as well. Paypal has emerged as one of the best payment gateways. So what exactly is Paypal? Read further to find out.
Paypal allows money transfer and payment to be made online. It acts as an acquirer that processes payments for range of individuals and business houses like online vendors, auction sites etc. moreover, it has a small usage fee. The fee depends on the payments options and the currencies involved. Although Paypal is subject to a lot of rules and regulations which govern financial institutions in USA but it has not been classified as a bank. One of the major reasons for this is that Paypal has its deposits in commercial interest-bearing checking accounts and it does not disburse any of it.
Some of the Important Features of Paypal are:
1. It has more than 232 million registered accounts and allows customers to send, hold and receive funds in 24 currencies in a total of 190 markets.
2. Paypal also provides a Students’ account. It was launched in the year 2009. the main aim of this feature is to let teens have access to tools for educating them on spending money wisely. The account can be set up by parents and then they can transfer money into it.
3. Another great feature is that Paypal lets individuals to start business with a worldwide reach. Here Paypal serves as a third party to ensure secure and easy money transactions.
4. It also informs its merchants about the flaws or shortcomings in their online stores so that they can protect themselves from malicious shoppers who try to shop for free from their store.
Like every other technology, Paypal too has its share of Pros and Cons. Let us now look at the Pros and Cons of this service.
Pros of PayPal
Paypal has achieved immense popularity as it offers ease and security while making transactions. This is why Paypal has grown into a company with excess of $2.2 billion in annual sales revenues. Paypal offers a lot of advantages to sellers as well as buyers.
1. It is Easy to Set Up
Paypal is quite easy to set up and has good customization options. All the price options are fully customizable. You do not need to do much beyond copy pasting the existing code and you can satrt selling online within minutes.
2. Good Price Policy
Unlike other payment services that require monthly or regular payment from customers, Paypal requires you to pay only when you sell. Thus you do not incur any loss in case you do not make nay sales.
3. Brand Name
when it comes to online shopping, customers look for brands. The brand name associated with Paypal boosts customers’ confidence in a business store. Moreover, it ensures that credit card and account details of customers are not revealed to the store owner.
4. It is Easy to Execute
It is very easy to execute and can prove to be of great help especially to small vendors and businesses. Paypal does not require much investment of time and money. Thus it facilitates easy financial transactions.
5. It Offers Multiple Account Options
It offers multiple account options to the users like personal account, business account and a student account. Moreover, an individual can also own multiple accounts in multiple categories. Every account has different rules.
6. It Keeps Track of Transactions
Paypal also keeps track of your transactions. It lets you access every inbound and outbound transaction. The accounts are neatly organized. You can also download the complete spreadsheet files that have the details of transactions.
7. It can Accept International Payments and Cards
One of the best thing about Paypal is that it lets you pay and accept payments in 24 types of currencies. One can also make use of debit and credit card to accept or make a payment. The transaction fee is quite nominal, that is, 3.9 percent.
8. It Integrates Payment with eBay
Now that Paypal has been acquired by eBay, the business and premier accounts provide many tools for better integration with eBay.
Cons of PayPal
Although Paypal offers a lot in terms of ease and features, but it does have some disadvantages. Some of the disadvantages can cause serious problems to some businesses.
1. It has Hidden Fees
Although Paypal provides many services for free and the charged ones have a nominal fee but when it comes to non-Paypal payments, the fees charged can be every expensive. Those who have personal accounts do not need to pay any fees for making or receiving payments to and from other accounts. But there is a catch. They have certain limits and restrictions on the amount of money that is moved. These restrictions do not affect much the big business owners but for small seller it is like a big burden.
2. There are Strict Rules
When it comes to security issues, the US government has quite stringent rules. These rules restrict the number of Paypal transactions. Even if there is a slight security issue, the account us locked. And then Paypal takes quite a long time to investigate and unlock the account.
3. Customer Service is Not Good
The customer service is not good. The customer care number is not easily available and even if one finds it, no one receives the call. Also, there are complaints of emails receiving only automated responses. There are also some reports of bank accounts being automatically debited.
4. Verification Process is Annoying
Although the set up is easy, but when it comes to verification process, it proves to be a big nuisance. You are required to provide your account number and routing number. After this a token deposit is made and you are to wait for 5 days to start using your account. And in case you do not have the internet banking facility then you may have to wait for weeks.
5. It has Bad Seller Protection
When it comes to fraud and threats, Paypal is highly vulnerable thus you can become an unfortunate victim of online fraud. Another loophole is that accounts are locked even on a slight suspicion and many times the funds are refunded to the customer even after the products are shipped. If you happen to be a seller, this can prove to be really bad for you. The complain system do not seem to address the issues.
6. It Requires Scripts
Another disadvantage is that you need to use a script to download e-books or other digital products. And when it comes to setting up a script, it can prove to be a very daunting task for most of the people.
7. The Currency Basket is Not so Comprehensive
Although Paypal offers 23 types of currency options but what is bad is that it excludes some important currencies.
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