Paypal can be your best friend or your worst enemy.
You’re probably wondering “why?“.
They can be your best friend, because they have simply gained the trust of buyers, and it makes the search on ways to receive money online so much easier for sellers. In this age of the internet, it’s instant funds and seems like a complete gift from the internet gods and entrepreneurs. It’s the grandfather of collecting funds comfortably online, so it’s considered the place most buyers and some sellers call “Home”.
Now, why can they be your worst enemy? Ok, so lets get straight to the real reason you have to watch your business with Paypal. Sellers of any occupation place their company’s financial control in the hands of Paypal anytime you’re doing business using their services. They have full control over if you’re going to issue a refund back or not, and that could be considered very risky depending on what you offer.
Paypal was originally meant to make payments online easier, and specifically benefit people sending a product to a customer after purchase, securely. Makes perfect sense until Paypal stretched their purpose a little more and started covering services, meaning (Hairstylist, Personal Trainers, Blogger Selling Ad Space, etc.). So, if you’re not dealing with a product that lacks a Tracking Number, you’re putting your business in huge risk of being scammed by buyers with bad intentions. Tracking numbers do exactly what they are set out to do, and that’s track a product to confirm delivery, but when your product doesn’t take shipping to be considered “completed or fulfilled” then what do you do?
Paypal representatives has personally told me of moments when people have received a haircut, left the salon or barbershop, and placed a dispute on the payment they just made with their stylist before they even leave the parking lot. Scary right? Then, you’re in the debating phase for a possible 21 days or more. (During the possible 21 days they pull the amount from the seller account.)
So, the moral of the story is…… if you’re running a business that provides a services or any type of virtual material, please be careful and make sure to have another method to receive funds from clients close by. We don’t want to scare away anyone comfortable with Paypal, but we do want you to be aware of any potential losses your company might receive from doing business with them as-well.
Feel free to leave a comment on other ways to receive payments online, and make sure to look for our topic coming soon of other ways to receive money from clients outside of Paypal.