PayPal has many benefits for the customer as well as for the merchant when placed side by side with card payments. It is without a doubt the most pronounced alternative means of payment with a worldwide reach.
However, is PayPal the ultimate payment method with the emergence of several online alternatives? Is PayPal the only basket, as the adage goes, in which one should place all one’s eggs? — Taking on facts and figures, we shall endeavour to answer these questions.
There are indeed some top alternatives that can equally rival what you will benefit from PayPal. That should be the direction of businesspeople and merchants today.
The 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 minus £0.30). When you lose 3% of every transaction made with customers, the figure adds up quickly, especially if you intend on expanding your business.
Adding to these charges, banks also demand transaction fees to transfer funds. Chargeback fees can add up to a great deal of money.
PayPal has been known to freeze accounts without due warning. If their algorithm detects unusual or dubious activity on your merchant account, PayPal will automatically freeze the account along with the funds therein. — Now, you may think this is a great safety measure, but it is also a burdensome one, especially with the time taken to unfreeze the account and then to hope the customer returns.
When the widespread acclaim that your complete financial data is protected by one username and password, it tends to give cybercriminals the signal that this may be an easier portal to hack.
It takes three to five business days to withdraw funds from the PayPal account, which might be a tough pill to swallow if you’re financially tight and need the funds released urgently.
What should 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 £23/month) or it may be a stringent contract. And of course, it’ll allow you to receive payments from anywhere and at any time.
In the event that you receive payments in the way that a freelancer or consultant would, or if you receive a relatively low volume of transactions, or perhaps even if your business is a start-up within a low-risk industry, using PayPal will indeed offer you the best results. — This is the good news PayPal offers.
However, when you hit a certain income mark, making over £8000 – £15000 a month, what you will need is a more pocket-friendly option, and a more customised 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 easily, you have to take note of the unexpected, which are red flags that are bound to appear, and it will lead to the freezing or the eventual termination of the account.
Numbers don’t lie | The facts
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 they prefer.
eBay, for example, is quite aware of the mindset of its 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 included) and they process transactions in more than 150 currencies.
If you are a merchant, then offering PayPal as a payment method to your clients is not a bright idea.
The summations above are in support of allowing several payment options for your customers. When they have this form of diversity, the customers will be more than happy to choose the one with which they feel most comfortable.
At iPayTotal, no matter if you are a regular merchant account or a high-risk merchant account, we offer the best payment solutions through great acquiring banks offshore as well as secure and safe payment gateways to help you feel safer and to add extra security for your customers.