What Is Paypal?
So, what is paypal? Paypal is a merchant account aggregator, in that they accept payments online on behalf of small merchants (you the busness owner) and submit those transactions to the bank networks for others in return for a fee.
Paypal is not a credit card processing company that provides merchant accounts. This is why, when payments are made, the receiving or delivering bank shows a transaction from or to Paypal on the bank transaction statement. When a regular payment is made to a company with a credit or debit card, the receiving company’s name shows up on your bank statement.
What Is Paypal Used For?
What is paypal used for? A Paypal merchant account is good to use if you sell digital products like ebooks, images, software or physical products too. You can also send money to other Paypal members. You will need to attach a bank account to your Paypal account in order to withdraw funds.
It’s also a good option if you sell services or physical products but have a small sales volume. If your monthly sales average is below $3,000 or accept credit cards only a few times the cost per sale is bearable for most people. However, there are many small businesses that use it for much larger sales amounts per month. If a business doesn’t mind paying the higher transaction fees, it’s totally up to them.
Paypal also offers the ability to create website payment buttons so customers can pay online without your help and you receive an email when the payment is generated. Alternatively, Paypal also offers a virtual terminal that allows you to directly enter credit card payment information for your customers.
For a fee Paypal offers credit card processing services for very small businesses. However, if your business generates regular monthly sales and the total sales are above $3,000 Paypal can cost more than a regular merchant account. If you own a restaurant or beauty salon Paypal is not the best solution. Why? This is where you will lose the opportunity to save money in per transaction fees.
How Much Does Paypal Charge In Fees?
Recently, Paypal charges 2.9% plus $0.30 for online sales. 2.7% plus $0.30 for card swiped sales. 3.5% plus $0.15 per transaction when you type in a card number for a customer.
In comparison, with us, merchant account fees for swiping a credit card can be as low as 1.69% plus $0.25 per transaction. Or you could use our zero fee merchant account program and pay zero credit card processing fees.
Paypal also charges $30 per month for a virtual terminal without a contract. You can enter credit card payments on behalf of your customers. Our virtual terminal costs $14.95 per month within or Payanywhere pos software. Your best choice, as to which route you go, really depends upon how long you expect to be in business.
If you plan on generating at least $3000 per month in sales regularly then you should consider a regular merchant account with us.
If you are doing seasonal credit card sales, convention sales or event sales, you may want to consider getting a regular account with us and use our pay as you go merchant account program. You will pay roughly 2.69% + $0.30 per transaction per sale. However, you will not be billed a monthly service fee or pci compliance fees. Contact me for more details.