SHOULD YOU CONTINUE USING PAYPAL?
PayPal is the first payment processor and was created in 1998. It has more than 100 million users and works more like a bank account than a credit or debit card. But, if it's so old and there are so many newer payment processors, why do people keep using it?
THE MAGIC OF PAYPAL
PayPal has been around for 20 years, and it's the main way the online giant eBay accepts payments. PayPal works primarily as a third party payment processor that connects directly to your credit cards and bank accounts.
Unlike most credit card payment platforms, when you make a payment with PayPal, the money is transferred from your checking or savings account, or from a credit or debit card, to your PayPal account, and then to the other person in the transaction. Similarly, if someone pays you through PayPal, the money goes into your PayPal account and you have to transfer it to your bank account.
PayPal has more than 100 million users worldwide and is used by seven million businesses. It was designed so that with money in this third party account, you can make transactions to other PayPal accounts instantly.
The advantage of using Paypal comes from the numbers and access - PayPal is used in many countries and therefore it is likely to be more accessible to international customers who use different banks and credit cards than those commonly accepted in your country. Payments are made through PayPal's website, rather than through its servers.
PAYPAL ACQUIRED VENMO
PayPal is doing everything possible to stay on the most widely used payment platform lists. When you and your friends go out for a bite to eat or share a cab, PayPal steps in so you can easily send them the $5 you owe them, instead of having to dig for cash. There are a couple of services in different countries that have been doing this for younger users, like Venmo and Circle Pay, but PayPal is used internationally and by people of all ages, so it is becoming quite a popular option. It has also grown so much that it is buying from the competition, including buying Venmo a couple of years ago. This increase in users internationally makes it a good idea to include it in your online stores.
WHY SHOULD WE USE PAYMENT PLATFORMS?
Payment platforms are an effective way to accept someone else's money. These platforms are used to accept credit cards, bank transfers, etc. With Shopify, you have over 70 payment platforms to choose from, and you can accept payments across multiple platforms at the same time to make sure your customers have access to your store. The easiest to set up is Shopify Payments; an internal platform that has lower rates than most. You can also accept gateways such as Apple Pay, Google Pay, and even electronic currencies such as Bitcoin.
HOW DOES PAYPAL MAKE MONEY?
PayPal has relatively low fees to join. Your transaction fees are a little lower for domestic fees, and a little higher for international fees, compared to Shopify payments. They have a large number of users who are accustomed to them, which is a great advantage, but their biggest drawback is that they have no chargeback protection for merchants. This means that when a customer says they didn't receive the shipment, you must succeed in proving that they actually receive it. PayPal is also known to be pirated, as people like to steal customers' identities through PayPal to get credit card details.
SHOULD I BE USING PAYPAL?
It all depends on what your customers prefer. Having the customer's preferred payment platform available maybe what closes a sale. If many of your customers prefer PayPal, you should offer it.
The easiest way to find out how your customers are paying is to offer a lot of gateways (including PayPal and Shopify Payments), and then check the payment platform statistics from your Shopify administrator. If you find that enough people are using PayPal, you should definitely be offering it. However, if you find that only a few are, it may not be worth keeping the fees and the least protection from the sellers that come with PayPal.
What online payment processors are you currently utilizing in your online business? Comment below and let us know!