These days, PayPal is everywhere. As an online business, it can be hard to avoid them. For millions of people across the planet - PayPal provides an easy to use platform that has helped revolutionalize payment systems online - but it could be costing your business a considerable amount of money. We're going to look at why.
How transaction charges are hurting your bottom line
PayPal isn't free. As a business, they've got to make money somehow. PayPal charges a small percentage for each transaction. While this would only be a tiny amount for those making the occasional transaction - it really adds up.
Profit margins are now as important as ever and you could be paying a percentage simply for receiving your money. Although the percentage is small - for someone doing hundreds or thousands of transactions, this will undeniably add up. Such transaction charges could potentially cost your business a fortune in the long run.
Limited protection
Most credit and debit card purchases are protected against fraudulent transactions, adding an extra layer of security when shopping online. Unfortunately, PayPal isn't covered in the same way - anyone who makes a purchase with PayPal is waiving their right to protection under Consumer Protection Rights. For a business that makes a lot of online purchases, this could spell disaster if one of them goes wrong. And that's not all you're customers might be more reluctant to make a purchase at a site that only accepts PayPal - so this is costing you two-fold as it both affects your purchases as well as potentially putting off new customers.
Customer service and dispute resolution
PayPal isn't a bank - and some users have complained at their limited customer service. As a massive multinational company, PayPal's response time is sometimes limited, and people have felt that their dispute resolution has been lacking. They don't act under any financial regulation authority so are free to make decisions of their own choosing.
Account freezes
PayPal also has a reputation for freezing accounts - sometimes seemingly on a whim. Thousands of users have complained that their PayPal account has been closed for no apparent reason - and this puts off a lot of people from using the system. Not only could your business be crippled if your main account is unnecessarily closed - but you could be losing business if it happens to one of your major customers.
Only accepting PayPal could lose you customers
We've seen some of the many ways your business could be affected if something happens to your PayPal account - but that's not all. If PayPal is the only method you use to receive payments online, you could be putting off some customers. Although PayPal is generally well regarded, it does have a certain reputation in some quarters and this could mean it's losing you business. Customers want to see a selection of payment methods and if you only offer PayPal - you might lose them.
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