At the end of my article is a list of alternatives to PayPal. First, I want to show you where to read more about the present situation, and tell you why I plan to stick with them as one of my ordering options.
As the link to the article at Mercury News reports, PayPal had troubles yesterday for the fifth day in a row. Millions of angry eBay users were affected by this. I’ve seen posts by hundreds of small business owners who use PayPal as a cost effective solution – and a trusted third party – to process payments, mainly for digital goods. If my Inbox is any indication, there are thousands of customers who attempted to order a product and could not complete the buying process. Last Friday, I got 32 emails in a single day from people who were unable to order via PayPal.
The MercuryNews.com artcile, PayPal problems persist for fifth day, published yesterday talks a little bit about this issue and how it affected both consumers and business owners. To picture it, imagine that all the credit card processors for a minor merchant card company went down for five days. Some will argue that PayPal is hardly representative of that many users – but remember, it is the favorite method for processing eBay transactions.
This isn’t the first time this has happened. And yet, more people are signing up to use PayPal to process payments even now. Why?
For one thing, people who draw traffic from people who are familiar with, or use eBay, find that these visitors often already have money in their PayPal accounts that they have there strictly for business related expenses they can write off. Some people even fund their account on a monthly basis with the exact budget they plan to spend.
It’s convenient for them to use. The majority of the people on my lists asked me for a PayPal option for purchasing, and since I’ve been offering them more than one option for accepting payment, my sales have gone up dramatically. During the period I was still working a day job, offering PayPal as an option was pivotal in my increase in sales.
I feel this is partly because the ordering options come with a certain status level – if you have a verified account, a US Premier account or a US Business account, many feel more seccure ordering from you than they do if you have a processor who doesn’t track these kinds of things. Anyone who looks me up in the PayPal directory, or clicks my Verified link or logo can see how long I’ve used them, and infer from my statistics that I am a safe person to spend money with. Hardly a personal endorsement, but it’s the next best thing. Verfied status tells them that I have a bank account from a finiancial institution, which of course means that I had to be screened and approved.
And yet, some businesses refuse to use PayPal as a processor at all. And until recently, they’ve had good reason. A buyer used to need a PayPal account in order to order, and the ordering process used to be quite cumbersome.
Now they alow anyone with a credit card to pay via their system. And f you have the techinal know- how or can hire someone who does – you can create a sophisticated shopping cart solution and implement it on your site.
With all these options, it isn’t cost-effective for a smaller business to get a merchant account that will take the buyer away from their site, and may not have a clear solution to providing background information on the person they are buying from. Once I was able to afford it, I had fully intended to get a merchant account, and I probably still will. But like any other consumer, I want to justify the expenditure. Why should I have one, when coupled with my current alternatives, I already have a working system in place?
If it ain’t broke, why fix it?
So personally, my top choice of processor is going to remain PayPal- when PayPal is temporarily out, I have at least two alternatives..
My first-time customers for ebooks are more familiar with them, and the fact that I have a verified US Business account with an established reputation of getting purchases from other Verfied users brings a third-party sense of security that few other processors can give. I don’t have to deal with the headaches merchant account, and a there is a trusted system in place to deal with any disputes.
(I’ve only had one dispute through PayPal, ever, and it was simply an issue of the other party not getting my follow-up email – when they got my email with their permanent download links, we both walked away happy. PayPal did a wonderful job facilitating a happy resolution for both parties.)
With PayPal, I’m also able to be paid for each transaction immediately – so if I’m doing consulting work that requires me to pay expenses, I can start work a lot faster and get jobs done more quickly.
However, I’m not one to put all my eggs in one basket. There are many suitable alternatives to using PayPal, and some customers of mine are equally vocal, though far fewer in number, about their disdain for that particular soluton. So I’m apt to offer more than one.
Here’s a list of other companies you can use if you decide as a supplement or alternative to PayPal.
If you sell digital goods and internet related services, Clickbank is a popular solution. With Clickbank, you can also leverage thousands of affiliates to help you sell your services. The drawback to Clickbank is that orders processed by this system are a bit more susceptible to theft. Aside from that, if you don’t mind getting a check about a month after the orders come in, this is a convenient option. They pay like clockwork. This is the other option I use the most.
A good option if you have a lot of one time sales. This was the first processor I ever used way back in the late 90s. You’ve got to have a good business reputation to use them. I only stopped using them when I felt their fees were getting out of control. However, especially from a service standpoint, they are a good alternative to have.
Also has an affiliate system in place. This is for you if you have a lot of subscription based payments and affiliates are a major drive to your income. I’ve only been on the buyer side with 2Checkout.com, and it’s often a deterrent to me if it’s the only option available, unless I already trust the person I’m buying from. With PayPal I know that if I’m not getting what I paid for, or feel that I no longer need their services, I can cancel my subscription from my end. Other than that, it’s quite suitable for a solution.
I have problems with their service from a customer standpoint – they never responded to my password reset issues, and I eventually had to sign-up for another account. It takes longer to become verified through them, it seems, and they appear to have fewer options in general. Yet, this is the closest ordering system to PayPal, and makes a decent back-up solution if you’re a verified seller.
I haven’t bought or sold anything through Payaah as yet, and that’s saying a lot, because I purchase tools to run my business with on a regular basis. It’s a popular system, but popular doesn’t always mean good. So I can’t give a firm thumb-up, but I haven’t heard anything bad either.
Well my right hand is starting to throb again, so I’ll just leave you with this.
PayPal has its bumps in the road, undoubtedly. Some of them may cause you to lose money if you don’t have an alternative in place. However, it may not be time to walk away from them completely – just make sure you have other options while you decide.
