If not accepted already, setting up PayPal payments can be a valuable addition for small businesses.
PayPal is just one of many ways for customers to pay (a key point that we’ll return to later on). However, it has an established reputation, a generally positive reception, and a large user base. Accepting PayPal payments from those existing users creates a positive and familiar customer experience. That’s crucial when it comes to fighting shopping cart abandonment and securing revenue.
Why should businesses use PayPal? Which type of PayPal business account should your organization create? Can a PayPal account serve as the default or only way to accept payments for your company? Keep reading to learn the answers to these questions.
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PayPal is a major player in the online payments landscape. Statista projects that roughly 429 million PayPal accounts are active, as of the second quarter of 2022. While not all of those account holders will visit your business, there’s a good chance some will.
A customer should have as few roadblocks as possible between selecting an item or service from your inventory and completing the payment process. The last thing you want is for a complex or frustrating checkout experience to dissuade a customer after they’ve already decided to make a purchase.
Ultimately, your goal should be to make the online payment experience easy for customers. That’s true whether they use credit and debit cards, PayPal, or another method of payment. With no startup or monthly fees, it makes sense to incorporate PayPal into your plans.
PayPal itself explains that both business and personal accounts allow users to send and receive payments. So, why should organizations opt for a business account?
A PayPal business account puts your company in a position to take advantage of a variety of business-focused services, as PayPal explains. While you don’t want to sign up for additional services simply because PayPal offers them, having the option can be valuable.
Additionally, a PayPal account for business offers valuable functionality not included in personal accounts. With PayPal for business, companies can:
In our opinion, it’s worth it to set up a PayPal Business account if your company wants to accept PayPal payments. The option to access additional features and support offered by PayPal is valuable. That’s true even if your company only uses a few of them or uses them rarely.
A PayPal for business account gives your company access to a variety of resources that aren’t available to users of personal accounts. Most importantly, a PayPal business account offers a familiar, simple, and trusted interface to a potentially large group of your customers.
Those are excellent reasons to incorporate PayPal into your company’s payments strategy. However, your organization should look for other workflows and processes to handle transactions that don’t originate from a PayPal account, like credit card payments.
Why is it important to go beyond a PayPal account for your business in your broader payments strategy? There are a few key reasons to keep in mind, including:
PayPal is a great payment option for customers who already have PayPal accounts. If they’re looking for opportunities to use their account, they probably trust the provider and enjoy the process.
You also need to consider customers who don’t use this service, however. While PayPal makes it possible for non-members to complete a transaction with a business’s account, it’s not the most streamlined or simple experience.
You could run into concerns with cart abandonment and general dissatisfaction if customers are confused or feel like checking out takes too long. That’s a clear reason why PayPal should be a payment option provided by your business, just not the only option.
Using PayPal to accept most or all of your business payments can lead to higher costs than are common when using a merchant account for the same purpose.
While PayPal doesn’t charge monthly fees for a standard business account, it does include transaction fees. The specifics of these processing fees generally include a percentage charged alongside a fixed fee. For debit and credit card payment processing, for example, businesses must pay 2.99% of the transaction and a fixed fee of 49 cents.
Merchant accounts vary in the exact nature of their processing fees. However, it’s often possible to find lower costs across the many providers of these accounts. Even though merchant account providers tend to incorporate monthly fees as well, only businesses with very low transaction volumes would tend to benefit from using PayPal exclusively.
Selecting PayPal as a standalone provider of all things payment processing can seem like an easy path forward. However, the potential costs to your business mean a more robust strategy can lead to significant savings — and a better customer experience.
By all means, incorporate PayPal as an option and feature it for your customers. But don’t stop there. Open a merchant account to take advantage of the savings on processing payments. Look at competitors to PayPal, like Stripe, and compare their offerings.
Consider including options like Google Pay and Apple Pay as well. These services also have growing user bases that enjoy the payment experience offered. Similarly, working with a Buy Now, Pay Later service provider can offer more customer support and encourage sales.
Swipesum is here to help you develop a complete payments strategy that aligns with the needs of your business. We are platform and provider agnostic, meaning we’ll only ever suggest solutions that make sense for your company.
Ready to learn more about how we can help you build a successful approach to payment processing? Book a Free Consultation!