PayPal started in 1990s and launched an expedient digital payment system that supports online money transfers, revamping the traditional payment processing methods. You might have used PayPal services as a consumer to wire money to friends or pay for online shopping.
Since PayPal launched, more and more contending merchant services have come up to help businesses of every size with payment processing products and services. With the latest payment processing system surfacing, PayPal has evolved too, with more personal and business options for online and offline transactions.
Currently, PayPal is offering a complete suite of financial products for small businesses and large enterprises. Here is a detailed guide on how to set up and use PayPal for your business based on your needs along with its pros and cons.
Setting Up PayPal for your Business
Every payment processing service understands that small businesses rely on them to collect and transfer payments rapidly and conveniently. For that reason, PayPal has rolled out numerous features for a business account that cater particularly to small businesses.
The first step is to create a free PayPal business account by providing your basic information about your company: confirm your email, provide your business name, and access your funds. It’s that simple!
The benefits of creating a PayPal business account include the following:
- Carry out business activities under a name (Company or Group)
- Accept all types of payment at little fees
- Increase checkout conversion by setting up a payment gateway
- Receive payments from customers without PayPal accounts
- Enable subscription payments for your services
- Give employees limited access to your account with multiple logins
- Explore PayPal business loans and PayPal working capital solutions
- Integrate your PayPal account with many other shopping carts
- Set up recurring payments with your PayPal account
- Propose financing options to your customers
Among PayPal’s small business products, it also offers PayPal’s Business as an all-in-one solution for small business with features like payments processing, payment gateway, PayPal lending, e-commerce integrations, invoicing and software to manage your sales and costs.
PayPal Small Business Solutions
PayPal provides all-inclusive solutions to small business. Here’s an overview of PayPal’s small business solutions:
- Payment Processing
PayPal is the pioneer in the payment processing system and is being used by many B2C and B2B businesses. The most popular payment solutions for PayPal include PayPal Payouts, online payments, and PayPal Here. Payment processing service is universal and offers plentiful integrations with other systems. You might have seen PayPal as an option in many checkout processes.
The setup is quick and you can send and receive payments in a matter of few minutes. Moreover, the conversion rates of PayPal is high and being it a trusted payment platform, customers count on it for any additional information or request when a transition interrupts or help is needed.
The only drawback of using a PayPal for business is high fees than other traditional credit card processors.
- PayPal Payouts: Mass Pay Options
PayPal Mass Pay Options also called PayPal Payouts is an extremely expedient way to send up to 5,000 payments to multiple people at the same time in one fell swoop. This feature can be integrated with a robust Payouts API (application programming interface) and it is the most suitable option especially for those merchants who have to pay to masses without originating ACH drafts or cutting checks at a flat cost of $0.25 per transaction or a 2% transaction fee for domestic payments made via PayPal website.
Using this feature not only saves time and efforts but also simplify international payments for merchants, help reduce the risk and manage all kinds of payouts. The fee for the sender is low, and a recipient doesn’t pay anything. If a recipient claimed the payment, canceling it can be tricky and the recipient must already has a PayPal account or create one and receive approval to retrieve funds.
- PayPal Here App: Accept Payments in-Store or On-the-Go
PayPal Here App is a mobile payments solution with a free Mobile Card Reader or Chip and Swipe Card Reader, used by retail merchants to accept credit and debit card payments from customers anywhere. The app allows secure processing of credit card payments, sales tracking, and invoices creation, all right from your smartphone or tablet. The benefits include no setup fees, monthly fees, cancellation fees, monthly minimums, live customer support and no long-term commitments. You only pay a 2.7% fee on most transactions. The fees for key-in cards, invoice payments, and cross-border transfers are expensive.
- Online Payment Services & Solutions
With PayPal secure online payment solution, all you need is to use your email address and password for checkout. You don’t have to provide any credit card numbers or financial information to make the online payments – giving your customers more options and reasons to buy. The integration can be made by adding a PayPal button into your existing website or build a custom checkout process page to make the online payments. The customers make the payment with their PayPal balance, credit card, debit card, or a linked bank account. They also provide purchase protection to customers in case a purchase doesn’t appear, broken in transit, or is different than what was ordered. The fee per transaction is 2.9% plus $0.30.
PayPal has made requesting payment easy and interactive with their customizable invoicing templates with the option to add your logo, contact information, and custom fields. The major benefit of PayPal Invoicing is that the customers can securely make payments in just a few clicks and merchants can receive payments in minutes. The merchants can also view billing history online, track payments, and send reminders. Moreover, there’s no setup fee or monthly fee and you only pay when you receive a payment from your customers. The fee per transaction is 2.9% plus $0.30.
- PayPal Payflow Payment Gateway
PayPal’s Payflow payment gateway is another payment processing service for small businesses with up to a 44% higher online checkout conversion. The payment gateway focus on mainly on the online transactions. It allows merchants to accept credit card payments directly from a website, irrespective of the payment processor. While using the PayPal payment gateway, you can use PayPal or any other credit card processing service. PayPal Payflow payment gateway is PCI-compliant and complies with fraud determent protocols for online payment processing.
The major benefit of using PayPal payment gateway is low rates and incremental sales boost by offering PayPal Credit* payment options on your site at no added cost. It also works with many merchant accounts, major payment processing services, and shopping carts. It has two gateway options with different levels of customization: Payflow Link at $0/month with PayPal-hosted checkout and Payflow Pro at $25/month with unlimited checkout customization.
There are optional features like advanced fraud protection, recurring billing, and buyer authentication for a low additional cost per feature. This service is only available in four countries: U.S., Canada, Australia, and New Zealand.
- PayPal Lending
PayPal offers faster, simpler ways to secure lending for your small business. There are two main types of lending products:
PayPal Business Loans – PayPal Business Loans are fixed-rate business loans from $5,000 to $500,000 with tailored terms (13 to 52 weeks based on loan amount), and predictable weekly payments.
- You need to have a PayPal Business account to fund your loan
- Your time in business must be 9 months at least
- Your business annual revenue should be $42,000 or more
PayPal Working Capital – PayPal Working Capital is cash advance for PayPal sellers that is repay with a percentage of daily PayPal sales. The loan amount is based on the PayPal sales history and the maximum you can secure is 30% of your last 12 months’ of PayPal sales. The fees are $0.01 to $0.60 for every $1 borrowed.
- You must have been a PayPal seller for at least three months
- Process annual sales between $15,000 and $2 million
- PayPal Credit – Line of Credit
With PayPal Credit, offer more financing options to your customers so they can pay for goods or services over time. You’ll receive the payment immediately at no additional cost, but your customers can put off payment.
The best thing about PayPal Credit for your business is that it brings about increased sales and better conversions. Get 6 months special financing on purchases of $99+ with no cost to you. In addition, PayPal makes billing to your customers.
- PayPal Business Debit MasterCard
PayPal offers a Mastercard business debit card with no annual fee and 1% cashback on eligible purchases. The card is linked to your PayPal account, allowing you to use your PayPal balance online or in-store whenever needed. You can also make the cash withdrawal with an ATM from your PayPal balance. You don’t have to transfer money from your PayPal account to your bank account. Just quick access to the cash you need to restock, make purchases or pay vendors – whatever you want to.
- PayPal Shipping Service
Get PayPal Shipping service right from your PayPal business account and saves on shipping. With PayPal Shipping Center, you can send shipping notifications, print shipping labels, packing slips, customs forms and shipments tacking. The major benefit of PayPal Shipping service is that you get discounts because of PayPal’s partnerships with UPS and USPS. There’s no subscription or monthly fees!
- PayPal Integration Software Solutions
Almost every e-commerce business is using PayPal services to facilitate transactions. They also have detailed software development kits (SDKs) with support for developers. The SDKs combined with your business Point of Sale (POS) software enable you to offer secure and steadfast payment processing to your merchants. The benefits include integration with many platforms, supports several programming languages and widespread use enable easily availability of developers to tweak your integrations.
A One-Stop Shop for Business Services
PayPal is a one-stop-shop for small business payment solutions. From payment processing solutions to full-scale POS solutions and software integrations, millions of customer that are using PayPal around the world to compete. Along with one-time purchases, it also the quicker, easier way to make periodic payments to all your monthly bills and subscriptions.
Getting started is quick and easy but it might cost you in higher transaction fees and for custom additions. As a startup, it’s worth a try just to get going. Once you’re start growing, you can reassess your options for better terms and affordable transaction fees. Overall, using PayPal for your business model is a good fit considering 87 million active accounts in 190 markets and 24 currencies around the world.