By Rhonda Campbell
The last thing you need as a small business owner is another credit card or accounts payable debit card to keep up with. Just like you, your customers probably don’t want to have to go out and get another charge card to shop with you. To accept online payments from customers, you might want to explore PayPal options available to your small business.
PayPal History and Small Business Support Options
The parent company of PayPal is Ebay, a popular online retailer. Founded December 1988, PayPal is available in at least 20 countries. In addition, PayPal has “more than 117 million active accounts.” In 2011, the company generated $4.4 billion in annual sales. This number represented a 28 percent increase over the previous year’s sales. Furthermore, during the third quarter of 2012 alone, customers with a PayPal account completed 589 million transactions.
One of the reasons PayPal is popular with some individuals and small business owners is the ease and speed with which invoices can be sent to customers and the ease and speed with which payments can be made. In countries where the business accepts payments, generally all that’s required is an email address and a bank or credit card account. Customers simply log into their PayPal account using an email address and password, then type in your email address, indicate whether they’re paying you for services or products, then type in the amount of money they want to send you and click “send” to finalize payments.
If your small business has a storefront and a shopping cart, customers can pay you through the PayPal shopping cart at your website. After customers pay you for products or services, they are generally automatically redirected back to your small business website. The entire process can be completed in a few minutes.
As a small business owner, you can also send payments to freelancers and contractors who work on one-time or ongoing projects for you. A downside to using PayPal to pay contractors and freelancers is that a fee is deducted from payments. For this reason, you might want to pay workers via check unless workers want to receive payments within a matter of minutes.
Accepting Customer Payments via PayPal
Since it was founded in 1988, PayPal has launched virtual and credit card processing tools. For example, should you need to accept customer credit card payments at your brick and mortar store or while you’re selling your wares on the road at events like book festivals, flea markets and swap meets, the PayPal virtual terminal might be a good fit. You’ll need Internet access to use the virtual terminal.
The terminal can accept payments whether they come to you via fax, telephone or online mail orders. Rates for the service are based on the amount of monthly sales you generate through your PayPal account. There’s a surcharge on international payments. Furthermore, the PayPal free smartphone card reader (lets you swipe customer credit cards and accept payments while you’re on the road). To manage recurring customer payments like magazine subscriptions and web hosting charges, you can log into your PayPal account and create online invoices to send to your customers.
The company also keeps payment records for the entire year. Depending on the amount of money your small business receives from PayPal customers, you might have to file tax forms with the IRS. PayPal sends out any necessary records you are legally responsible for filing with the IRS.
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