The increase in net penetration has led to a phenomenal increase in online trade. Experts believe that online trade has doubled in the last 3 years and is expected to increase at least 7-fold in the next 5 years. In order to keep up with the growth of online trade, there is a growing demand for merchant accounts, card processors, payment gateways, etc. The growth of online trade has been accompanied by a parallel growth of the profession of internet fraudsters. The legal infrastructure to address net frauds in most countries is still in its early stages. The electronic contracts that were issued have not yet been tested in the courts. It is not easy to get a merchant account. It is a costly proposition in terms of the initial set up cost to have a well-secured hole proof network, and security levels need to increase to meet the growing threat perception.
So how do you show consumer interest to transact online with peace of mind? First, you need to study the user’s opinion and terms about the credit card processor. In fact, you can find a summary of the different credit card processors here. In such situations, PayPal is a simple solution. With over 85 million active PayPal accounts and a presence in over 55 countries, PayPal is the fastest, easiest, most cost-effective, trusted and world-class method for online shopping. It’s like having a single merchant account, a credit card processor, and a payment gateway all in one. You don’t have to worry about recurring fees or anti fraud tools. You don’t need to set up or pay any set up or payment gateway fees. You get free merchant and ebay tools, and you can start from zero transaction fees. For small merchants, PayPal does offer virtual merchant accounts at a fractional cost. For small customers, PayPal may seem higher than its merchant account rates. For high volume customers, PayPal can be about 10% cheaper than merchant account rates.
For instance, let’s say a merchant has a $1 million turnover through PayPal. The merchant’s typical merchant fees are $29,520 (including various annual fees) and PayPal charges are $26,550.
PayPal - The Best Online Payment System for SMB’s and Professionals
With PayPal, you don’t need a web site, you can receive payments via email, and your customers don’t even need a PayPal account. If you’re auctioning something online, PayPal can automatically notify the winning buyer of the end of listing with a backlink to listed item. PayPal takes care of all your shipping needs, including helping you calculate shipping costs, creating shipping labels, tracking delivery, and paying for insurance on shipped items. Also, PayPal has partnered with Yahoo, allowing you to build, set up, and manage your own Yahoo e-commerce website using Yahoo Merchant Solutions, which includes tools for site-building, easy order and inventory management, and more. PayPal also helps you fight unfair charge backs by buyers.
Restrictions to Accept PayPal
There are some limitations on what you can trade with PayPal, such as selling fake products, gambling, child pornography, and so on.
Sending money through PayPal is simple. You can send money for free to recipients in 55 countries where PayPal accepts USD, CAD, Aussie, GBP, Yen or EUR.
It Helps You Earn from Referrals Too
PayPal also allows you to earn referral fees by recommending it to friends. You can add a referral link to your email or website, and every time a merchant opens a new PayPal business /premier account through PayPal, you will receive a commission of $0.5% of the total payment value, capped at $1,000.
Working with over 1000 employees, PayPal’s strong protection system includes encryption, CVV2 controls to protect against identity theft, and PayPal claims 100% payment protection. You can install a security bar for free for one month to protect against spam and phishing emails claiming to be from your PayPal account. However, after the first month, you’ll need to pay for the security bar. If you have a dispute with a seller over quality or content, you can turn to PayPal’s dispute resolution specialists to resolve the issue. PayPal has also acquired the leading Verisign payment services and added industry’s leading payment protection tools.
PayPal has Its Critics Too
While PayPal has a loss rate of under 0.5%, which is very low when compared to Master Card and Visa, PayPal also has a lot of critics. One of the main reasons for this is because with PayPal, you lose your consumer protection rights. PayPal wouldn’t let you issue a charge back in the event of unauthorized activity from your credit cards or PayPal accounts. They also claim that PayPal has added a term to allow funds to be withdrawn from your bank account for a recovery. The worst charge against PayPal is that if your credit card is stolen, your account will be immediately flagged as “criminal behavior” and all the money in your account will be seized! PayPal settled out of court after a long public trial, paying $9,25 million and walking away from the whole claim because they feared that the judgment would force them to change their unethical practices.
Fraudsters are everywhere on the internet, and if you’ve fallen victim to one of these card processors, you need to act fast before it’s too late. Despite the allegations and criticism, there’s no denying that PayPal has established itself as one of the world’s leading online payment solutions. With a renewed emphasis on customer satisfaction, PayPal should be able to recover its lost ground.