Give it to PayPal, it brings some benefits for the customer as well as the merchants when it is placed side by side with the card payments. It is without a doubt the most pronounced alternative means of payment that has a worldwide reach. However, is PayPal the ultimate payment method with the coming of several online alternatives? Is PayPal the only basket that people can their eggs? Taking on facts and figures, we shall make an attempt at answering these questions. There are some top alternatives that can equally rival what you will get from PayPal. That should be the direction of businessmen and Merchants today.
The Biggest Drawbacks Of PayPal
Yes, it might be argued that it is free for personal use; however, it is seen that what it gives with one hand, it takes back with the other hand when it is used for business purposes. Take, for instance, each transaction involving goods/services, PayPal takes close to 2.9% (plus $0.30). When you lose 3% of every transaction made with customers; the figure adds up quickly with the expansion in your business. Adding to these charges, banks also demand transaction fees to transfer funds. There is a hefty chargeback fee of about $10.
PayPal has a bad attitude, they have the penchant of freezing accounts without warning. Whenever her algorithm detects any dubious activity in the account of a client, PayPal will automatically go the length and freeze your account together with the funds in it. For instance, some of the embarrassing criteria are a sudden move in the transaction volume, the situation of products being sold at prices below their costs, or any questionable/vague products being sold
When the widespread acclaim and combined with the fact that your complete financial data is protected by one username and password, PayPal can be classified as one of the most attractive targets for scammers. They use numerous platforms such as email and Twitter, where the fraudsters appear as PayPal’s affiliates/customer support staff and then phish for victim’s PayPal credentials.
It takes 3 to 5 business days to withdraw funds from the PayPal account, which might be a tough pill to swallow if you’re financially tight.
As with any other popular payment solution, PayPal has its share of “sad stories”.
Why do you need online payment methods like PayPal?
If you are a merchant, then offering PayPal a payment method to your clients is not a bright idea.
But should it be your primary payment processor?
Yes, PayPal has the potential to grow along with your business. It will not suffocate you with a mammoth monthly subscription fee (PayPal Payments Standard is free; PayPal Payments Pro will charge about $30/month) or it may be a stringent contract. And of course, it’ll allow you to get payments from anywhere and at any time, it will as well enable you to perform more than that, this is due to its assemblage of partner programs, tools, and integrations.
Where you only receive payments consistently, say in the manner of a freelancer or a consultant, or if you are having a low volume of transactions, it might be you are just starting out, then you will not go through the trouble of getting a merchant account and PayPal will represent the best bets if you are after a one-stop starter solution.
But however, when you hit a certain income mark; making over $10,000 – $20,000 a month, what you will need is a more pocket-friendly option, and a more customized service, which PayPal can never give you. In addition to that, just like every other aggregator service, the account stability is going to form one of your biggest concerns. Though you are capable of creating an account in a blink, you have to take note of the unexpected which are red flags that are bound to happen and it will lead to the freezing or the eventual termination of the account.
Considering the above points, it will not be a wise economic decision to put all your eggs in one singular basket.
The greater the more, the better
In one of the surveys of YouGov; they found out that close to 40% of consumers declared that they were more comfortable purchasing from a merchant who offers a wide range of payment options, this is not the case with a merchant that supports just a single method of payment. Taking it further, 50% of the respondents are of the opinion they will abandon any checkout process that does not support the payment method that they preferred. This is a strong point for diversity that we have been talking about.
eBay is quite aware of the mindset of the customers. They have aligned with the direction of their customers. Today as things stand, they have numerous payment options.
Adyen on its part is in support of about 200 payment methods (PayPal inclusive) and they process transactions in more than 150 currencies.
The summations above are in support of allowing several payment options for the customers. When they have this form of diversity, the customers will be more than happy to choose the particular one that they feel comfortable with. The issue of security and the very stringent rules are all working against PayPal. Customers are looking in the direction of other payment solutions