What is PayPal ?
Using a billing solution
like PayPal can be a logical choice for small and medium-sized enterprises that
want to conduct E-commerce transactions.
Acquired by eBay in October
2002, PayPal is a real-time payment solution that is quickly becoming the global
standard for online payments. With PayPal, any business or consumer with an
e-mail address can send or receive payments online in a secure, convenient and
Sending and receiving money
through PayPal is absolutely free of charge. In fact, you don’t even need a
PayPal account to send or receive money. If you are requesting money from a
friend or customer, an e-mail will be sent to them from PayPal with instructions
on how to pay you. And conversely, if you want to pay someone who doesn’t have a
PayPal account, an e-mail will be sent to the recipient with instructions on how
to obtain the money you have sent them.
Opening a PayPal account
and depositing funds into it is also free. And you don’t need a credit card.
PayPal users have the option of funding their accounts directly from their
checking or savings account. It takes about 3-4 business days to transfer funds
from your bank account to your PayPal account and the service is free of charge
for all U.S. accounts. Transferring funds from your PayPal account back to your
bank account works in exactly the same manner: each transaction takes 3-4
business days and is free of charge. The same services are also available to
international account holders for a small service fee. For example, Canadian
banks will take about 5-7 business days to complete the transaction and the
charge is a modest (CDN) $0.50 per transaction.
If you prefer, you can
still deposit funds into your PayPal account through a credit card. Registering
your credit card with PayPal ensures that funds will be available for deposit
into your PayPal account up to the personal limit on the card.
All these online payment
services are free to anyone who signs up for a Personal PayPal account. The one
drawback is that they cannot accept credit card payments. However, PayPal
Premier and Business accounts allow businesses to accept credit card payments
online in addition to the standard payment services. Users who accept credit
card payments are charged either a standard rate (2.9% + $0.30) or a merchant
rate (2.2% + $0.30) if the vendor reaches certain minimum volume requirements.
These rates are for vendors that have volumes of $3,000 over 90 days, which
works out to an average of $1,000 per month. These rates will change according
to your transaction volume.
PayPal is flexible enough
to serve as a complete billing solution. It provides a variety of E-commerce
solutions that can be integrated into your Web site in a few easy steps. For
example, a simple “purchase button” can be placed on your Web site. Once a
visitor decides to make a purchase, all they have to do is click on the button
and submit their information. That button sends the request to PayPal’s back end
where it processes the entire transaction for you. And if your business sells
multiple products and services, PayPal can even provide you with a shopping cart
solution free of charge.
There are many
advantages to using PayPal E-commerce solutions:
Easy to implement – no CGI scripting or programming
No up-front costs or monthly fees – use same PayPal schedule of low
Improved buyer experience – PayPal’s simple and easy to use interface, makes
for efficient user experience
Sell with ease – PayPal provides detailed transactions records
No software required – everything you
need – shopping carts, graphics and code - is available free on the Web site and
at no charge.
Billing Solutions –
Advantages for the SME
For the SME, the great
advantage of using a billing solution such as PayPal is affordability. Small
businesses that are selling just a single product and do not conduct a high
volume of transactions can outsource PayPal as their E-commerce solution at a
fraction of the cost it would require to ‘E-commerce enable’ their Web sites.
Setting up your Web site for E-commerce can be a significant expense and this is
especially true for smaller businesses. Merchant accounts require monthly fees
and Web hosting, software and administrative personnel all combine to raise the
cost of conducting E-commerce. With a billing solution provider like PayPal,
simply sending and receiving money won’t cost a penny and you can process credit
card payments without having to invest in the overhead and channeling resources
to administer it.
A billing solution provider
like PayPal is ideal for small and medium-sized businesses. With PayPal, you
save money and reduce headaches. Your only cost is the modest transaction fee
while PayPal takes over the entire online payment process for the merchant –
from taking all the orders, processing the financial transactions to remitting
payment to your bank account. PayPal not only saves your business time and
money, it allows you to take advantage of a first class E-commerce
infrastructure with its robust security systems, efficient record keeping and
customer service. The PayPal name also lends the respectability of a strong
reputation – something that is extremely important in attracting customers that
are somewhat reluctant to engage in E-commerce.
Finding a cheap and
efficient E-commerce solution is critical for success in cyberspace. Credit
cards remain the most popular method of purchasing goods and services online and
PayPal is a cheap and effective way of ensuring your business has that
capability. And if customers prefer, they can still make their online payments
So no matter what kind of
business you are conducting on the Internet, PayPal has the online billing
solution that will fit your enterprise needs. PayPal is not only used by online
retailers but has caught on with many offline businesses such as Web designers,
lawyers, consultants and contractors. With over 20 million users and 3 million
business users, PayPal continues to attract users and build on its strong
reputation as an online payment solution.