Proof That a Merchant Account is Better than PayPal

The Following is a Guest Post.

For many new businesses today, figuring out how to accept payment from customers is a lot more complicated than it used to be. There are a variety of payment options on the market, and many allowing customers to choose from all of them can quickly become confusing and overwhelming. For this reason, most new businesses make the decision to just accept one or two forms of payment from customers.

In lieu of accepting credit cards, some businesses have decided to let their customers pay through an online service called PayPal. This service is essentially a credit card processor, but it allows both parties to hide their payment information from each other. While this may seem like a good idea for many new businesses, there are several major drawbacks to relying on PayPal.

To start, PayPal is a credit card processing service that has each user create an account with his or her credit card and/or bank account information. PayPal then charges a steep fee for every transaction it processes. In exchange, customers of PayPal know that they can go through the PayPal service if there is a problem with the transaction.

In many ways, having a merchant account is a better option for most retail businesses. To start, many customers are turned off by PayPal’s insistence on creating an account. This involves going to a separate website and entering in personal financial data. The process is time-consuming, and can be confusing to people who have not set up an account like this before. In comparison, paying with a credit card through a website only requires a customer to enter in their card number and name.

The security features of PayPal are their most advertised feature, but few people realize that most credit cards offer the same security features. Paying with a credit card allows the user to dispute the charge just as easily as disputing a charge through PayPal. Furthermore, most banks that issue credit cards have their own security features built into the cards and accounts. PayPal does little to nothing to protect the actual credit card or bank account of a purchaser; they only protect their own records and mask the buyer’s identity.

Finally, many businesses have reported that the fees PayPal requires are too high for a business that conducts multiple transactions. While PayPal’s fees might seem reasonable to a part-time seller, a business that conducts many transactions will notice that the fees quickly add up. Paying a merchant services fees often results in much lower overhead costs. Furthermore, PayPal has limits on the total amount of transactions it will process for a single merchant. While some businesses are in no danger of hitting these limits, it can potentially limit the growth of a business.

While PayPal may seem like an easy option, many businesses will benefit from establishing a merchant account early on. It will lower their transaction costs, improve customer relations, and allow the business more control over its finances.

*Little House comments – Before selecting any merchant service, do your homework based on your individual needs. Weigh the costs, ease of use, and flexibility before making a choice.