Gotta Love PayPal

Running through a few of my posts over the last few months I realize that I’m coming across as fairly negative towards PayPal (PayPal Has Dropped the Ball, Is PayPal Dropping the Ball), even though those posts are directed at their operation of the VeriSign payment gateway service, it still sounds as though I hate PayPal. One of the reasons I have had the hate-on for PayPal is probably jealousy, kind of like all those Mac users who love to hate Microsoft and PC’s. Perhaps there hasn’t been enough PayPal love-ins, so here goes:

PayPal is unbelievably useful for small business owners. Here are five reasons why:

1. It is very simple to use and easy to setup.

2. You do not need a merchant account – if you don’t know what a merchant account is, consider yourself lucky. Getting one is like a combination of getting your teeth pulled and applying for a new passport if you can’t find your birth certificate…painful, excruciatingly slow and the requirement for your first born to get accepted.

3. It is cheap – ever since PayPal lowered its discount rate (from around 4% to something like 2.9%), PayPal is very economical for a small business with relatively small amounts of monthly transactions.

4. It is secure – since day one, PayPal has prided itself on being at the forefront of fraud and security. Since it has always been a consumer targeted service they get all kinds of questionable merchants, so they have had to be at the leading edge of security.

5. It is flexible – although it may be kind of confusing at first, PayPal actually has a lot of options for small business owners that caters to their requirements. You can choose from a regular account that accepts only payment from other paypal accounts, to a premium account that accepts credit card payments, to Website Payments Pro that is essentially a payment gateway with a built-in merchant account, but unfortunately not yet available in Canada. You can use it to accept payment with their vanilla solution, or use a service like FreshBooks that has it completely integrated.

The fact of the matter is that PayPal is extremely popular, a quick look at all of the FreshBooks small business users shows that a whopping 30% of all active users are completing transactions with PayPal, compared with the next leading gateway Authorize.net at 6%.

Through all the whining and complaining about the PayPal service, let’s face it, millions of small business owners out there are getting a lot of benefit from PayPal and I am sure there are millions more who will use them in the years to come.