Is there a down side to paypal?

Question

I was thinking about selling some ( ATC's- Art Trading Cards).
and I will have to get a paypal account, so I can get paid.
Have you had any trouble with paypal

Answer 1

Here's the big downside. Your agreement with Paypal gives them the right to access your bank account. This will probably not be a problem. But if a customer complains about a transaction, Paypal's inane complaint process gives them the right to go into your account and make restitution. Your appeal rights may be limited. If it's a large transaction, it can be a big problem. Furthermore, they have access to your credit card, so your credit history may be affected. My suggestion is to open a special bank account that you only use to fund your Paypal transactions.

The other problem is that Paypal's cut is fairly large...2.9% for a verified business customer, plus special fees and FX for overseas transactions. If it's a personal account, it's 4.9%. You won't get any discounts until you do more than $3K a month. If you're going to be doing a fair amout of online business, a merchant account with a conventional credit card processor would be cheaper.

Float time can be quite long...I've had transactions that have taken more than a week to clear.

Finally, you need to know that Paypal isn't regulated. You can't expect the sort of guarantees you get at a bank. They will tell you that you get "pass through" FDIC insurance for example. There really is no such thing. What it means is that THEIR accounts are insured, since they are real bank deposits. But YOUR account with Paypal is only insured to the extent that their account is insured. In the event of a failure, you have no direct claim on an insurance settlement.

The upside is that it's quick and easy to get it set up. So if you're only doing a few transactions, it's hard to beat.

Answer 2

I have had no trouble at all. In fact, I quite like PayPal.

The only downside I can think of is if you want to get the full amount, PayPal isn't the way to go. If you sell, for example on eBay, and they have to pay you $5, if they send a check, you will get a check for $5. If they pay via PayPal, you have a certain % taken off to pay PayPal for the service.

Answer 3

I have been selling stuff on ebay for a couple years using paypal. I love it. It is easy to use and safe. It beats the hassle of people sending checks and money orders. It also simplifies international selling - no currency exchange or checks drawn on foreign bank type hassles.

Of course there's always a downside - the fees involved. They collect a % of whatever is paid to you. However, I figure that if you don't accept paypal, you'll miss out on a lot of sales.

Answer 4

It's a great site and the services really cannot be beat by anyone. The only real downside to what they offer is the steep fees that they can take from you. Even on $5. I think I only received $4.25. So, if you sell on Ebay or receive money on Paypal make sure you factor in these costs to your costs of doing business because these cuts are definitely going to cut into your profit margin.

Answer 5

PayPal is one of the largest companies in the World.

In fact, they are currently the number 458 in the Fortune 500 2006 list.

Answer 6

If you need to accept credit cards, I endorse working with Payanywhere. They give the lowest commission rates. They haven't any setup or month to month charges. I've been taking credit cards using them for over 5 years and I am very happy with their service. You can examine it out at: http://is.gd/payanywhere

Answer 7

Paypal works for me, BUT do not ever ever respond to any emails asking you to update your Paypal information.

Answer 8

Downside is 'Pay"
Upside is "Pal"

"Pay for a Pal"
.... just kidding : )