In part one we discussed the Big Daddy of credit card processing; merchant accounts. There was a time when we lived in a single alternative world. That time is no more. Today the alternatives they are aplenty, and have seriously taken a big slice of the pie. One of those alternatives is PayPal.
The biggest advantage to PayPal as a processing service for accepting credit cards is simplicity. The account is simple to setup, simple to administer, and simple to use. The criteria necessary to qualify for an account are also set at a much lower threshold than that of merchant accounts. Basically, anybody can setup a PayPal account.
There are three types of accounts available through PayPal; Personal, Premiere, and Business. You can ignore the first option, as a Personal account cannot be used to process payments. It is strictly a “play” account. That leaves Premiere and Business. Either can be used to process payments for your school store. Which you choose is a matter of needs and personal preference.
The biggest advantage to a Business account over a Premiere account is that you can use a Taxpayer Identification Number, (TIN), to setup the account rather than your Social Security number. You can also assign a business name to the account. In addition, by adding Payments Pro to the account you can use a physical terminal just as is the case with a merchant account. However, business accounts garner closer scrutiny from PayPal and are subject to more stringent criteria.
Many people already have a Premiere account, so for many this may be the best option. HOWEVER, if you are going to use a Premiere account it must be one dedicated to store business only. The co-mingling of funds is a bad idea for many reasons, not the least of which is the fact that it creates accounting nightmares.
Now, the downside. In order to accept PayPal with a Premiere account, you need a web site. This is because, in the absence of a physical terminal – which requires a Business account and a PayPal Pro account – it is a buyer initiated process requiring the input of personal user information, specifically eMail address and password. If you have one, good for you. It’s a relatively simple matter to add Buy Now buttons to your products. If you don’t have a web site, maybe you should, (more about that in the future).
You need a web site. Or do you? Not anymore! PayPal is now competing for those processing dollars in the mobile market and is offering a card swipe device and app for Smartphones. It is called the “Here” smartphone reader, and is currently available for Android and iPhone products. There is a flat 2.7% processing fee, (competitive, but slightly higher than a merchant account), and no other costs involved.
For more reading about the device, head here: https://www.paypal.com/webapps/mpp/credit-card-reader. There is even a video demo at that link demonstrating just how simple it is to use.
Again, as is the case with a merchant account, the watch word is SECURITY! Access to credit card and processing information should be strictly controlled and monitored.
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