I am considering accepting PayPal payments for my remodeling/contracting work. I was wondering if anyone out there would like to inform me of any pros and cons of the PayPal payment method. Thanks
George in R.I.
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Pretty high fees, IIRC. Is it necessary for anyone to pay you remotely? Why not just take credit cards?
I'm under the impression that if I accept PayPal, a customer can pay with any type of credit card they want. Maybe I'm wrong. Not too sure. I believe PayPal charges the person receiving the payment almost 5% but I would advise the customer of the 5% charge for the option of being able to pay via any credit card. I was thinking this would give the paying customer every option without me having to sign up for every credit card.
Let me know. I'm new to this.
G.
Based on what you're saying I would go to your bank and ask if they can set you up to take cards. As far as I know it is against the written agreement you will have to sign if you charge your customers a fee for the transaction.
Once you have funds sitting in a paypal account, you can have them cut you a check for $1.50. Or they will electronically transfer it to you bank account for free. Either way, that's a lot cheaper than accepting credit cards and yet, your customer gets to use one.
I haven't had the opportunity to be paid that way yet. Most of my customers prefer to simply write a check.
-Don
It's margin slippage!
If you take PayPal, or even credit cards directly, be aware that a customer can ask their card issuer to "charge back" after they pay you, i.e. state that the product or service was not as expected, and dispute the charge. Typically the money will be withdrawn from your account while the dispute is investigated and you may have the burden of proof that the charge is legit. Probably not a big burden but probably a big PITA.
I do not take CC but if I did, the money would go into an account separate from my business checking. As soon as the money showed up in that account I would transfer it to my business checking. I would probably deal with two separate banks to do this.
Look into all of the fees and charges before doing anything like this.
Paypal is owned by Ebay.
Imagine huge corporate monster that could give a ratzazz is you live or die.
It might work for small amounts, I wouldn't want them holding any large chunk of my money.
Joe H
The big advantage of PayPal is for small payments (under $10, say), and for payments where there's no face-to-face transaction so an "escrow" arrangement is desired.
A couple of years ago, I made several stereo cases for a customer about 200 miles away. He paid one invoice with PayPal and we decided that a check in the mail was a way better deal. We liked the concept, but the fees were pretty steep.
I used paypal for a built in bookcase project. The guy wanted to have his points. I have two accounts so I can move the money to an account that paypal can't reach. I also figure in the cost and then offer a cash discount so they know it would be cheaper if they wrote a check.
I don't know how big your jobs are but I would be willing to bet that paypal has a cap on transaction amounts. lots of my draws get into the 60-70k range. There's no way paypal is going to deal with anything like that. Nor do I want amounts in that range to be disputable after payment. It'd be a bad day if 60k disappeared from your account! I'd be interested to hear if anyone knows what their cap is, (if any)?
In the world of technology, there are two truisms that are worth remembering:
1) Hard drives have 100% failure raltes.
2) Paypal/Ebay *will* screw you over eventually.
Paypal is convenient for selling $50 garage sale items. Anything more is a rather large risk. Remember, Paypal is *not* a bank and is free from most of the standard consumer protection and banking laws out there.