PayPal, the online payment system which more than 180 million active users in 203 countries and 26 markets, allows that users can pay and transfer digital and mobile payments globally to another PayPal account holder to pay for the services or products. Plus, money can be deposited to a PayPal account using a current account or credit card. There is no need for personal checking, debit cards or credit card numbers. Plus, PayPal is safe and widely accepted as a seamless way of paying for products online. And PayPal is a payment service that permits you to receive payments, pay for goods and send money across the world while keeping your information protected by using powerful encryption methods.
But how does PayPal work?
- Both the seller and buyer and a seller should have a PayPal account
- A buyer links their credit card or a locally supported payment method to their PayPal account
- When buying from a seller that accepts PayPal as method of payment, PayPal will debit the amount from the buyer’s PayPal account balance or the payment method linked to the buyer’s PayPal account and credits the merchant’s PayPal account
- The seller can then do a withdrawal of the income received and transfer it to their local bank account
But why should your business use PayPal?
By having PayPal as a payment option:
- You can increase your potential market by attracting global customers which prefer PayPal as a more secure and convenient way to pay.
- This method is secure and can decrease the cost of fraud and chargebacks. In addition, you can take advantage of PayPal’s industry-leading fraud prevention and chargeback protection. Since PayPal is PCI-compliant, your task of meeting these standards is a good deal simpler.
- The app allows you to sell internationally. You can sell to over 180 million active users in 203 countries and markets. Plus, PayPal allows your intercontinental customers to pay you using their local payment methods and in their local currencies.
- This method allows you to accept online credit card payments, without having credit card facilities. Most online shoppers prefer to pay with credit cards. Plus, PayPal is easy and free to set up. There is no monthly, start-up, or cancellation fees or annual commitment.
- This method also offers comprehensive online reports. The PayPal’s reporting tools provide you with the information you need to meritoriously measure and manage your business. In fact you can: automate time-consuming bookkeeping tasks and accurately settle and reconcile transactions.
Consumers can link their debit or credit card to their PayPal account. All that a consumer need to do it select PayPal as method of payment when checking out. Then they need to log into their PayPal account and accept payment. The result is that a user can purchase at any store that offers the PayPal logo on their site. Users can also transfer funds to another PayPal account, or to their own savings accounts. Once a transaction, that occurs instantly, was completed the user will receive an email notification.
PayPal’s business developments
PayPal has a market cap of $60.7 billion. It was previously owned by e-Bay, but PayPal split from it. The relationship seemed ideal. E-Bay would offer items to sell, and PayPal would be the easiest way to conduct the transactions. This relationship happened for more than a decade. With PayPal being a fast, easy and safe means to pay, it aided in customer experience when dealing with e-Bay. Another benefit that PayPal users received was a offers buyer guarantees and a specific process for disputing transactions, so users always have recourse whether they are a buyer who didn’t get what they ordered, or a seller who may worry she will be stiffed on payment.
Still, as technology changes and business needs alter, so did PayPal. That is since PayPal seems to understand that it needed to grow, and keep up with technological habits of consumers. It has been said that the mobile payment market will reach $3.4 billion by 2022. It is, therefore, wise that PayPal should choose a mobile leader to partner up with – that of Android Pay.
This strategic partnership allows PayPal clients to conduct their transactions on Android Pay payments as well. In turn a benefit for PayPal users are that they don’t need a username or password to verify their transactions if they are doing it via the mobile platform, as a mere fingerprint would work just fine. More so, it places PayPal’s 16 million merchants to gain Android Pay capability without requiring integration. And as mobile browser shopping will be increasing, it would mean that for Android users at least, of which there are about 203 million that they will be shopping on the Android Pay due to the partnership most thanks to the ease to use that PayPal is known for.
PayPal in recent years have been dealing with more competition such as Apple Pay. However, PayPal services $1 out of every $6 spent online but will be able to better deal with major competitors such as Apple Pay as an independent company.
To maintain competitive edge, PayPal and Android Pay, will need to integrate loyalty programs and extra features for keep ahead. This strategy has been effective in the Chinese market, with platforms like Alipay and WeChat.
It should also be mentioned that PayPal is no longer just a payment provider. It launched a new service called Business In A Box with WooCommerce & Xero. This business in a box offers a overabundance of tools and solutions for first-time businesses, as well as discounts from PayPal’s partners and integration to PayPal Business accounts.
It is clear, PayPal is an effective global payment provider, which allows ease and security to its users. But it is also keeping up with the pass of technological change and altering its business model to include more integrated benefits to its users.