Tips for Getting More Out of PayPal
Sep 28, 2011 | ITNews.com
In the last 13 years, PayPal has expanded far beyond its initial growth spurt on auction Websites. According to its second-quarter results, the online payment service busted through the $1 billion-earnings mark and is processing more than $315 million a day in online payments.
PayPal has come up with services to match myriad business needs, and its fees are often much cheaper than those of a merchant account at a bank or with a credit card company for small businesses that do under a certain volume of sales.
Many small to medium-sized business owners rely on PayPal every day, but the service does more than let online shops and shoppers exchange funds, one transaction at a time. Here's a closer look at other ways to get more out of PayPal.
Use Subscription Billing and Recurring Payments
If your business or organization offers ongoing services, such as monthly charges to use your software, you already know about PayPal's Subscription Billing. This frees up bookkeeping time and makes the process of working with PayPal more seamless. Payments are automatic, so you can potentially retain more customers.
Use Recurring Payments for Layaway Billing
Recurring payments can also be a way of allowing clients to make smaller payments on a larger purchase, kind of like an online version of layaway. As any marketer knows, four payments of $19.99 sound a lot better to a potential customer than one payment of $100. Here is an example of one business that is using this feature for layaways. In this economy, every online business should be taking advantage of this.
Use a Virtual Terminal
If you don't want to commit to a debit or credit terminal just yet but still want to accept payments at trade shows, your PayPal account can serve as a virtual terminal that you can use from anywhere. There are no setup fees, minimum transaction amounts, or other charges traditionally associated with merchant credit card accounts. While this is handy, it doesn't handle debit, so it's only good if your business just pops it head into the retail space occasionally.
Handle Rebates and Commissions
If you have a commissioned sales force or are running an affiliate program, PayPal's Mass Payments system allows you to make related payments instantly and in international currencies. Fees are low, at 2 percent per payment to a maximum $1.25, so you won't spend a lot of money to send money.
PayPal for Nonprofits
PayPal offers widgets that allow your nonprofit to receive donations via your website or through Facebook. The widgets go further than acting as a payment gateway by acknowledging top contributors and showing how close your organization is to your campaign goal.
If you don't have your own website, PayPal has teamed up with Blackbaud to create BlackBaud Now, a simple way for a smaller nonprofit to receive donations via email. PayPal offers a special rate for nonprofits of 1.9 percent plus 30 cents per transaction for organizations with over $100,000 monthly volume and 2.2 percent plus 30 cents per transaction for organizations with less than $100,000 monthly volume. You must provide proof of non-profit status to receive the discounted rate.
Use PayPal Reporting Tools
Reporting is something that most of us only care about when it comes to accounting and sales software. Why would you bother doing it within PayPal? There are a couple of useful reports in PayPal that you can access while logged in through My Account, History, and then Reports.
Case Reports are extremely useful if you have experienced any chargebacks or have faced any payment disputes through PayPal. You'll see a record of all actions on the case here. Recurring Payments allow you to see who has set up a recurring payment through your site, so you can determine if you are close to having to ship out a product that you've offered through a layaway program. The other reports are typically items that you'll find in your accounting software, but if you are an accounting geek you can reconcile the numbers in both places.
PayPal Offers Content Resources, Too
PayPal's Merchant Learning Center offers useful articles, like this one on how to prevent shopping cart abandonment, and this one on how to position design elements in your website for better sales. There's even a book, "The PayPal Official Insider Guide to Growing Your Business", which discusses fraud protection, the proper use of PayPal reports, and tips for online marketing.
Get to Know PayPal's Security Policies
PayPal makes protecting itself from security threats a top priority. Despite this, the sheer volume of transactions going through PayPal will always make it a target for hackers. PayPal's buyer and seller protection policies do shield your organization from a certain amount of liability in the event of a breach, but doing business is never without risk. Not surprisingly, PayPal has a lot to say about how it's ensuring safety and security.
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