Home > Finance > The Pros and Cons of Using Paypal for Your Business

The Pros and Cons of Using Paypal for Your Business

By: Rachel Newcombe - Updated: 24 Mar 2011 | comments*Discuss
 
Pros Cons Business Craft Business Paypal

For craft businesses involved in buying or selling goods or services online, finding suitable payment methods is essential. PayPal has become one of the leading players in online payment services, but like any payment method, there are pros and cons involved. We take a look at the positive and negative aspects involved in using PayPal for your craft business.

The Pros Of Using PayPal For Your Craft Business

One of the main benefits of using PayPal on a craft business website is that it enables you to accept credit card payments easily and securely. It’s free to use and you don’t have to directly deal with your customers credit or debit card details. Your customers don’t even necessarily have to have a PayPal account – they can make a one-off or occasional payment without registering for an account.

When you’re selling products or services, you need to create invoices or bills for customers. PayPal is beneficial for this, as it makes it quick and easy to create an itemised invoice and then send it to your customer. All they need to do is click on the link within the email they receive to pay the bill – even if they don’t have a registered PayPal account.

For the purposes of accounts, you can print off the invoices to file away in your monthly accounts folders, helping you keep track of everything you’ve invoiced for and been paid for.

When you’ve received payments from customers, it goes straight into your PayPal account – in many cases, it shows up almost immediately. Money can then be transferred back to your business bank account; this transaction takes an average of three to five days.

As well as helping you with easy payments and invoicing, PayPal can also be used to easily print off postage labels, which can help speed up the parcel sending process.

If you’re running a monthly craft kit club, or providing any other service that requires a regular subscription, PayPal can be set up a bit like a direct debit, automatically taking a recurring payment each month, which can be very useful.

In addition, PayPal accepts numerous payments made in numerous currencies, so you can open your business up to international sales if you wish.

The Cons Of Using PayPal For Your Craft Business

As is the case with using any payment method for a business, PayPal isn’t to everyone’s taste and there are some cons, or downsides, of using it for your online craft business.

Not surprisingly, for people registered to use PayPal for business purposes, all transactions received are subject to fees. This means you lose a small fee for every payment you receive. If you subsequently also have to pay fees for all payments going into a business bank account, then you may lose out a fair bit for each payment, which is not always worth it for a small business.

It’s also worth bearing in mind that not everyone likes paying via PayPal. If you don’t want to put any customers off, then you may want to offer several payment method options.

PayPal has been known to suddenly freeze users accounts without any prior notice – if you’re relying on the payment system, or have funds in your account, this can cause major problems. There are various reasons for account freezes and sometimes it’s simply because you’re suddenly receiving more money in your account than usual. Although the freeze can usually be reversed, PayPal may want to do security checks or updates on you, which can take time to resolve.

Using PayPal For Your Business: In Conclusion

So, to sum up, when you’re deciding on payment methods for your craft business, it’s beneficial to do your research and weigh up all the pros and cons. If you’re not familiar with PayPal and haven’t used it before, then it’s a good idea to give it a go – perhaps by registering for a personal account first and using it to pay for goods that you by – and seeing how you get on with it.

If you’re uncertain about opting for only one payment method, then choose several. This will not only be good for your peace of mind, but also add to the options for your customers, which can only be a good thing.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
Why not be the first to leave a comment for discussion, ask for advice or share your story...

If you'd like to ask a question one of our experts (workload permitting) or a helpful reader hopefully can help you... We also love comments and interesting stories

Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Topics
Further Reading...
Our Most Popular...
Add to my Yahoo!
Add to Google
Stumble this
Add to Twitter
Add To Facebook
RSS feed
You should seek independent professional advice before acting upon any information on the StartACraftBusiness website. Please read our Disclaimer.