The Most Widely Recognized Online Payment Methods
Although PayPal originated as a venue for one-on-one transactions like EBay auctions, the payment solution has evolved into one of the most widely recognized and accepted methods of online money exchange. It offers easy integration of onsite tools ranging from simple “buy” buttons, to full shopping carts, and donation features like “tip” jars.
The payment and checkout process is generally fast and seamless. Many buyers use their PayPal accounts as a way to avoid entering personal credit card information online, and thus the service is perceived as a protection against identity theft. Because PayPal accounts can be linked to a bank account, private users can easily transfer funds to and from that source.
It’s a common practice for people to leave a standing amount in their accounts and to treat PayPal as a rechargeable debit “card.” Users are also attracted to the fact that the only information they need disclose at the time of purchase is an email address.
For businesses and vendors, PayPal has a fully integrated invoicing system, and a means for friends and family members to exchange funds with no fees attached. Business users may obtain a PayPal debit card, and the company has a “real world” mobile payment solution via its “PayPal Here” product. Subscribers receive a dongle for attachment to a smartphone and are thus able to accept credit card swipes in any location.
Three-Tiered PayPal Account Structure
PayPal operates on a three-tiered account structure:
- There is no monthly fee for the standard, personal PayPal account.
- PayPal Payments Advanced, which allows users to accept Visa, MasterCard, Discover, and American Express payments on their websites is $5 a month.
- At the Advanced level, for sales of $0 to $3000 the transaction fee is 2.9 percent plus .30 cents.
- For swiped and PayPal transactions at the Advanced level, the rate is 2.7 percent; typed and scanned 3.5 percent plus .15 cents.
- The PayPal Payments Pro account, at $30 a month includes the same fee structure. On both accounts monthly sales volumes of $3000 to $10,000 are 2.5 percent plus .30 cents. (Above $10,000 the rate is 2.2 percent plus .30 cents.)
- The Pro option also includes a virtual terminal with a rate of 3.1 percent plus .30 cents up to $3000; 2.7 percent plus .30 cents up to $10,000; and 2.4 percent plus .30 cents above$10,000.
- Currency conversions carry an additional 2.5 percent charge with a 1 percent charge on payments received from another country.
For merchants selling less than $2000 a month, PayPal offers cost effect processing. Above that level, more competitive merchant service account rates are available. Still, many online vendors are attracted to PayPal for its widespread name recognition and ease of integration into a variety of website models.