MarkT, PaulEvans, support

Monday, Apr 28, 2008 at 2:05 PM (Public Entry)

For many internet marketers, online auctioneers and e-business owners, performing sales transactions online can be a nightmare. Many buyers, for example, are wary about paying through credit cards and while business owners would prefer cash, it also exposes their bank account details. Using checks for payment may seem relatively safer but checks take too long to process and generally frustrate buyers who are in a hurry. But then came PayPal, which solved the problem for millions of buyers and sellers. But what is this issue about PayPal being unsafe for internet marketers? Can it be that the solution is far from perfect? We examine the pros and cons.

The convenience of PayPal
PayPal is one of the largest third party processors of online payments. It is also the brainchild of eBay, that giant in online auctions and sales. It functions essentially as an online payment processing service using credit cards and is designed to be used by online business owners who do not have the convenience of a merchant account. It's also relatively cheap, thanks to low transaction fees and free account sign up.

Why PayPal is unsafe for internet marketers
There are several reasons why an internet marketer may feel PayPal is unsafe and may want to rethink its use. These include:

When PayPal is in doubt, they freeze.
PayPal has been known to implement very strict control measures in order to protect its customers (both internet marketers and their buyers). If there is but a hint of fraud suspected on your part as internet marketer, your account could get frozen.

When this happens, forget about making any further transactions involving PayPal. Worse, whatever money is there in your PayPal account that you haven’t withdrawn yet will remain untouchable during their investigation.

In a few cases, internet marketers who have come under suspicion may even have their own bank accounts frozen by PayPal. This is a huge inconvenience if it happens to you, rendering you helpless and your bank account essentially useless – at least for the time it will take to complete the investigation which, by the way, can take a while.

Inconvenience to customers and loss of sales for the internet marketer
Without a merchant account, an internet marketer will have to use PayPal in order to accept payments online. To make this possible, every customer who decides to buy from the internet marketer must then sign up for a PayPal account or have one.

If the customer doesn’t have a PayPal account yet and must apply for one, he will have to wait for approval from PayPal before he can use his account. This process can take several days. What this means to the customer is inconvenience. To the internet marketer, it simply means sales loss due to the delay.

Too much information
Signing up for PayPal means giving away bank information, something that many internet marketers feel is unsafe for them. To protect themselves, they open a low-average monthly savings account just for use with their PayPal account.

Limited payment options
PayPal accepts VISA or Mastercard credit cards but will not process American Express or Discover.

What to do to address the unsafe option of PayPal
Not every one of your buyers may feel comfortable with electronic payments, such as those offered by PayPal. Some of your more important ones may also live in locations where they do not or cannot have PayPal accounts. And still, there are customers who just simply do not want to open a PayPal account. This presents a problem to you, the internet marketer, because it reduces your opportunities to meet your customers' demands, significantly lowering your sales.

To address this problem, try offering different payment options for your goods or services. Look at other reputable companies offering reliable online payment processing services. That way, should PayPal prove unsafe for you as an internet marketer, you can still offer your customers a way to buy your products or services.

Reprinted Article: Paul Evans

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