Why PayPal Falls Short When Pitted Against a Real-Time Payment Solution
From the time eBay acquired PayPal in 2002, and its subsequent gain in popularity since then, questions arose as to how it compares to a traditional merchant account. We feel that despite some of PayPal’s initial convenience it still doesn’t challenge a true card-processing solution. Here are the leading reasons why:
- For those of us needing to process credit cards in a brick and mortar location a Merchant Account is not only the best alternative, it’s the only alternative. It offers highly customizable processing options; including Mail/Phone Order, Retail, Internet, and Mobile card acceptance.
- Immediate access to funds is important to many businesses, especially those needing to keep a continuous cash flow moving. A Merchant Accounts deposits funds directly into your bank account, typically within a 48-hour time period. PayPal requires funds to be placed into their interim account first, before being manually submitted to your bank account. This wait can be costly, and even jeopardous to an organization.
- An even more important concern to businesses is having their processing abilities frozen or even revoked. With a Merchant Account your business goes through an underwriting process by a highly specialized team who understand your businesses. Unlike PayPal, there is virtually no risk of your credit card processing being hindered once you are up and running.
- Universal acceptance is another key advantage to having a Merchant Account. With PayPal, your customers also need a PayPal account to be able to pay you. In contrast, a Merchant Account accepts Visa, MasterCard, Discover, American Express, JCB, Diner’s International and all the major credit cards that are used daily. Forcing someone to register for PayPal is a major inconvenience and can be the deciding factor of whether or not you make the sale.
- Recurring billing is an extremely useful feature which allows you to bill customers on a weekly, monthly, or quarterly basis. This is advantageous to merchants who provide a subscription-based service; to them billing automatically can save time and headaches. Traditional merchant accounts offer tools that allow for this (such as Ubersmith and Authorize.net’s ARB Module).
- PayPal transactions move across large accounts which are pooled and are usually too large to be FDIC insured. This is not the case with a merchant account. Your money is always secure and protected.
- With PayPal, customer service is something that is practically non-existant. Allowing for a company to handle all of your processing and not being able to speak to someone over the phone is possibly PayPal’s biggest shortcoming. Situations when you need immediate answers can be frustrating without the ability to reach someone who you have a real relationship with.
The bottom-line is that if you want to run your business in a professional manner and need to firmly establish your own identity, then a transparent merchant account solution is your best option.
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