Tuesday, January 10, 2012

Paypal as only payment option - is that an option?

Indeed it is! Paypal is widely recognized as a secure way of payment, and with the possibility to pay for goods using the Paypal-gateway, without actually having a Paypal account, the service just got even more useful.

I live in Denmark, and here we have a local payment-card called "Dankort". It's similar to Visa's in it's function, but it was the first card to market in Denmark, and back in the 80s and 90s everybody had one. Hence the "Dankort"-sign is highly respected and has a lot of credibility within the Danish market. Local cards, such as the Dankort, are NOT supported by Paypal (at least not yet), and that can prove to be a serious shortcoming if you operate in a market where these cards are widely used.

If you sell to an International audience, most payments to your shop will probably be done via Visa or Mastercard, and Paypal supports both. In many markets, including the US, Paypal is just as trusted as any other provider of payment gateways - even eBay uses Paypal to handle it's payments between users.

Is it secure? I believe so! Sure, you can hack a Paypal account, but it's not a whole lot harder to hack your bank account. All payouts are checked by the Paypal staff, and in order to change your creditcard information etc. there are some really rough procedures to go through. I.e. Paypal withdraws one dollar from your bank account, and adds a X-digit note as payment reference. You then have to go back to the Paypal website and enter that code to verify your card. Pretty neat. The one dollar will be refunded, by the way!

To sum it all up:
If you target a Worldwide market, or if you operate in markets where Visa and Mastercard are the most common payment methods when shopping online, Paypal will be just fine. The number one benefit from starting out with Paypal is that it costs nothing. There are no monthly fees, no sign-up fees. They only charge you a little bit everytime you actually sell something. As a startup business you'll find that interesting.

Let me know what's your experience using Paypal for handling payments to your blog or webshop!