Should PayPal Be Your Only eBay Payment Option?

If you're selling on eBay, most likely you're currently using the services of PayPal (or have used them in the past) to process your transactions for you.

Afterall, eBay owns PayPal, so its' services are custom tailored to make doing business on the world's largest auction site a breeze, right?

Maybe. It just depends on who you ask.

I recently received a question from a subscriber who couldn't use PayPal (because of where she lived) and wondered if there were alternatives.

Based on alot of feedback regarding PayPal in eBay's forum, it's plain to see that alot of sellers are searching for other solutions, but for different reasons.

Today's tip will attempt to provide a couple of options.

PayPal has its Advantages and Disadvantages. Let's take a look at what PayPal can do for you, and what it can't.

The Disadvantages.

PayPal is very vulnerable to fraud, and it's you as the seller who'll be paying the price when it happens. What's more, they do take a percentage from every transaction that you could be keeping if your buyers were paying by cheque.

You might also have noticed that PayPal comes from the eBay school of customer service, enjoying such pastimes as hiding their phone number and only ever sending out automated responses to emailed queries.

PayPal has an unusual number of campaigners against it, most of them people who've had their accounts frozen and had to chase PayPal for months for thousands of dollars. Some of these people recently filed a class action lawsuit against PayPal, claiming damages for lost business and they won. This alone should make you cautious about using PayPal.

The Advantages.

PayPal is quick and easy for buyers to use, and is certainly a more secure and reassuring way to accept credit cards than signing up for your own merchant account. You'll probably also find that it's cheaper for you.

That's before you even consider that eBay buyers are more eager to buy from someone who accepts PayPal, as it saves them all sorts of hassle with posting payment and then waiting around. PayPal lets you give speedier customer service.

But Should You Use It Exclusively?

It's really a matter of customer service. Some of your potential customers might not have or want a PayPal account. Not everyone loves electronic payments. Some fear them. So a good rule of "options" is a smart one. The more options a customer has available to them to pay for their item, the better the chance of meeting the demand and therefore increasing sales.

Keep in mind that some buyers come to eBay because it is one of the few places on the Internet where many sellers will accept payment by more traditional methods.

Question is... do you want these people as customers, or don't you?

You might notice that some people are aware of the issues of PayPal and refuse to use it, but still want to pay electronically.

For these rare cases, it's worth opening an account at a well known PayPal rival that has a better reputation the current favorite seems to be NoChex (www.nochex.com), a U.K. based company, which offers f/ree chargeback protection.

NoChex is quite a lot better than PayPal by most standards, but just doesn't have the same market penetration or convenience of use on eBay. Still, there's nothing stopping you from accepting both, just as long as you make it clear that you do on your auctions.

Tip: if you find that you really prefer NoChex to PayPal, then you could offer your buyers a discount for paying through NoChex.

You may also want to check out a U.S. based company called ProPay at www.propay.com. They have been approved by eBay and have been getting good reviews.

I've read some comments at the eBay forum where Google may be introducing it's own merchant system called "googlebase". The "jury" is still out on this, but look for more info coming soon.

Finally.. if you've been looking for a more traditional merchant account, without many of the fees associated with them, I came across an alternative solution over at www.free-merchant.com. They claim their cart-system "integrates easily with your e-Bay auction!"

There you have it, a few alternative solutions to PayPal. Keep your options open as a seller and your buyer may thank you with a winning bid!