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PayPal was one of the first companies to bring convenient digital payment options to the masses when it debuted in the late 1990s. Since then, many competing and complementary options have surfaced to create seamless e-commerce experiences for millions of web users. PayPal has evolved too, with a variety of options for helping small business owners with online and offline transactions.
And it’s not just for eBay buyers and sellers anymore. It’s turned into a robust suite of payment solutions for small businesses and large enterprises alike. See if any of these PayPal offerings could be a good fit for your payment processing needs.
PayPal realizes that small businesses depend on the payment processor’s ability to collect money quickly and easily on their behalf. For that reason, they’ve rolled out business account features that cater to small business and solopreneurs.
According to the website, here are a few benefits of creating a PayPal business account:
By having a business account, you can also take advantage of other merchant features, like complete point-of-sale (POS) payment systems and full-scale payment gateway solutions specifically designed for the needs of small business owners.
This is what most people are familiar with in terms of PayPal services. You can use PayPal to either send or receive payments. The good news is that this service is pretty universal and offers integrations galore. Nowadays, it’s very common in the checkout process to see PayPal as an option.
PayPal mass payments is an incredibly convenient way to send payments to up to 5,000 people in one fell swoop. This features works from the PayPal website or from the PayPal API (application programming interface).
This situation is helpful for merchants who have to pay a large number of people without cutting checks or initiating ACH drafts (who wants to store a bunch of routing and bank account numbers, anyway?). In terms of who would use this feature, think of someone who has to make monthly affiliate payments to hundreds or thousands of affiliate partners (people who sell a product and receive a sales commission).
PayPal also offers a service for creating invoices and receiving payments through the same invoice. The invoices are customizable with templates along with the option to add your logo, company information, etc. Once the invoice is created, it’s sent via email to the recipient, who can either pay it from their own PayPal account or a credit card.
PayPal is such an industry-standard payment solution that many e-commerce companies use PayPal payment services to facilitate transactions. PayPal has well-documented software development kits (SDKs) along with support for developers. This means that if you are looking to support an application or any platform that requires digital payments, there’s usually a way to integrate PayPal into the mix.
PayPal’s Payflow payment gateway is another service that small businesses can use to process payments. Payflow, formerly Verisign, operates as a PayPal company. It’s similar to other gateway services like Authorize.net or First Data.
Many small businesses are familiar with using PayPal as a payment processor but not as a payment gateway. In a nutshell, a payment processor handles transactions by transmitting data between a buyer, the merchant bank, and the acquiring bank (the buyer’s bank). Payment processors can also provide equipment to accept credit card payments in person, but the focus for payment gateways are mainly on online transactions.
The payment gateway makes it so businesses can accept card payments directly from a website. Security is a major concern here, so a payment gateway provider has to be familiar with and able to comply with fraud prevention protocols for online payment processing.
PayPal offers an extensive suite of payment solutions for small businesses that are great for anyone needing to start nimbly and inexpensively. From quick-start buy buttons to full scale POS solutions and mass payments, PayPal enables the small business owner to compete on the level of larger operations.
However, getting started quickly and easily also means a business could pay on the back-end in higher transaction fees and for nonstandard additions to their payment services.
If you’re just starting out and haven’t had a chance to get a business loan or business funding, the trade-off might be worth it just to get going quickly. As your small business gets bigger, it’s a good idea to go back and reevaluate your options to see if you might get better terms and transaction fees. But with all the features, you may also find that PayPal still works and is a good fit for your business model.