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Monday, September 12, 2011

Using PayPal for Business

By Aaron S. Robertson 

What follows is a brief tutorial on utilizing PayPal for business on the Web, adapted from an e-mail I recently sent to a client requesting more information about PayPal.

Briefly, PayPal is a well-known, well-reputed, easy, and convenient way for both businesses and consumers to do business online.

With PayPal, a customer can pay for goods/services from a business online in two ways: with the customer's own PayPal account, if the customer has one; OR the customer can fill out an easy-to-use form that will bill the purchase to a credit or debit card of the customer's choosing.

All payment transactions are processed through PayPal's own secure servers, meaning that, if a customer visits a business's Web site and purchases a good or service from it, the customer is redirected to a secure page on PayPal's own Web site to actually process the transaction.

The business doesn't see any of the customer's credit card information, and doesn't have to worry about processing the transaction. PayPal takes care of that.

As with all credit card processing businesses, PayPal will assess a fee for each transaction it processes. This is not a separate fee that the business will be charged or have to worry about in any way - PayPal simply takes its cut right off the top when it processes an order.

So, for example, and I'm just tossing out random numbers here, let's say a business is charging $399 for a product or service on its Web site through PayPal. The customer will be charged the full $399 by PayPal, but the business will net, say, $380.

A business selling tangible goods online may have to charge state sales tax, as well. PayPal can be programmed so that it will automatically charge the customer the right amount of tax. The business will be responsible for sending that money to the state.

PayPal can also be programmed to include an additional fee for shipping to help reduce the burden on the business for that expense.

In order to set up a PayPal account, the business will need an e-mail address, which will serve two purposes: it will serve as a log-in ID and be used to send notifications to the business when a new order has been processed. A password and a checking account are needed, as well.

The checking account links to the PayPal account. It is needed in order to transfer funds from the PayPal account to the actual bank account of the business.

Unfortunately, the business will need to log into its PayPal account from time to time to manually transfer funds to its checking, as PayPal does not do this automatically. It's certainly not a big deal to have to do this manually, but it just makes the business have to go through an extra step in order to have funds deposited into its actual bank account.

In most cases, the business will see funds arrive in its bank account within two days of submitting a transfer order in PayPal.

To learn more, visit PayPal's Web site.

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