As far as online payment processing platforms go, PayPal remains one of the most popular and trusted ones. It’s available in over 200 countries, and this number continues to grow.
One significant factor that contributed to PayPal’s immense success is the growth of e-commerce and other types of online business. And at the time of its creation, PayPal didn’t have a lot of competition.
Moreover, PayPal is a very convenient way to transact with people and businesses locally or internationally. PayPal is convenient in that it essentially acts as a digital bank account or wallet without geographical boundaries. Plus, the process of opening an account is easy. Once your PayPal profile is set, you can easily make or receive payments into your account.
If you intend to use PayPal for international business transactions, below are some things you must consider:
1. Card Compatibility
You should note that PayPal only accepts specified credit or debit cards. Local credit cards may not function. So, if you have an account with a local bank, make sure you have a PayPal-compatible credit card. In that scenario, you should check with your bank to see if you can get a card that allows foreign transactions. This is important because whenever you want to withdraw funds from your PayPal account, you need to transfer the money to a bank account. That is why having a compatible card is essential.
2. High Chargeback Fees
You’ll want to prevent chargebacks at all costs if you’re running a business. Chargebacks occur when the business must reverse a transaction. The procedure of processing a chargeback is complicated and may take some time. This is also true when dealing with chargebacks on the PayPal platform. Plus, PayPal’s chargeback fees are often hefty, so it’s best to avoid them.
3. Transfer Fees
When registering for PayPal, no cancellation, registration, or setup fees are involved. However, much like any other transaction processing platform, you will be charged for making transfers, or even when you’re receiving funds. Usually, PayPal international fees are higher than domestic ones. But these rates may vary according to PayPal’s terms and conditions.
Furthermore, the charges may fluctuate depending on whether the sender and the recipient have PayPal accounts. Transactions are easier to complete when both users have an account. PayPal will charge 5% of the transaction amount, with a minimum charge of US$0.99 and a maximum charge of US$4.99.
However, the cost structure may differ when transferring directly from a bank account, and you may be charged a bit more. However, PayPal is dependable in that you can easily track the payment status of any transaction.
4. Monthly Maintenance
Unlike with a conventional bank account, there are no monthly maintenance payments you’ll need to make for your PayPal account. You’re only charged for the transactions that you make within the platform. This is a good thing because your business won’t have to deal with additional expenses.
5. Account Suspensions
If you violate any of the terms and conditions provided by PayPal, note that your account could be suspended for a period. Therefore, you should familiarise yourself with their policies and make sure that you cross-check every transaction that you make using PayPal. When your business account gets suspended, it could take a while for it to be restored.
It’s important to note that, while PayPal is a popular platform, not every customer or business uses them. Even though the recipient of an international transfer doesn’t need a PayPal account, it’s much easier to work with a business with an account. Plus, there could be instances wherein other businesses may not accept PayPal transfers. This, in turn, may result in lost business. So, it’s best to make sure that you work with businesses that accept PayPal. Alternatively, you can explore other payment options that should work for clients who don’t use PayPal.
PayPal is very a safe and secure platform. Plus, it has features that enable you to track account and transaction activity easily. But despite all these, you must also do your due diligence when making international transactions. The probability of getting scammed or hacked still exists even though it’s a secure platform. So, for example, you need to make sure that you verify the identity of the people or businesses you’re dealing with before you give them your details.
PayPal is a very convenient online processing platform accessible in most regions. It’s instrumental in this digital age where e-commerce and online transactions have become the norm. People buy products online and use tools like PayPal to make these online transactions. But before you use PayPal as a payment method for your international business, it’s important to take note of the considerations mentioned above to avoid problems in the future.