| As you might expect, there's no big preparation necessary to accept payment by cash, check, or money. Accepting credit cards is another issue. Fortunately, you have a couple of options available to you ”the most popular is using PayPal to handle all your credit card transactions. "Mike Sez"  | What do you do when a nearby buyer wants to come by and pick up the item personally , rather than shipping via normal means? There's nothing wrong with this, as long as you get a verifiable payment. That means asking the buyer to bring cash, money order, or cashier's check ”or to pay via PayPal before they arrive . Definitely do not let someone pick up an item and pay via personal check! |
Setting Up a PayPal Account PayPal (www.paypal.com), shown in Figure 13.2, serves as the middleman for your credit card transactions. The buyer pays PayPal via credit card, PayPal handles all the credit card paperwork, and then PayPal sends a check to you (or deposits funds in your checking account). PayPal service accepts payments by American Express, Discover, MasterCard, and Visa ”and, although it's primarily a U.S.-based service, it also accepts payments to or from 37 other countries . Figure 13.2. Use PayPal to accept credit card payments from your customers.  Signing Up for PayPal Before you can use PayPal as a seller, you must sign up for PayPal membership. You do this by going to the PayPal Web site and clicking the Sign Up for Your Free PayPal Account link. This displays the Account Sign Up page, shown in Figure 13.3; fill in the blanks and follow the onscreen instructions to complete your registration. Figure 13.3. Signing up for your PayPal account.   | PayPal also lets buyers pay via electronic check and funds withdrawn from their checking or savings accounts ”although most buyers use it to pay via credit card. |
You can choose from three different types of PayPal accounts: -
A Personal account is great for eBay buyers, but not quite enough for sellers. While you can send money for free (to pay for auctions in which you're a buyer), as a seller you can only receive non-credit card payments. (For no charge, though.) -
A Premier account is a type of personal account that works better for small business sellers. With a Premier account, you can accept both credit card and non-credit card payments (for a fee). You sign up for Premier status by checking the appropriate option on the Personal Account Sign Up page. -
A Business account is necessary if you're receiving a high volume of payments. With this type of account you can do business under a corporate or group name , and use multiple logins. "Mike Sez" | | I recommend you sign up initially for a Premier account. If your sales volume gets too high, PayPal will automatically switch you to a Business membership. |
There is no charge for becoming a PayPal member ”although there are fees for actually using the service.(The exception being the Personal account, which charges no fees for anything ”but doesn't let you accept credit card payments. ) Paying for PayPal Even though PayPal is owned by eBay, the fee you pay to PayPal is separate from the fees you pay to eBay. PayPal doesn't charge the buyer any fees; instead, it charges you, the seller, a fee based on the amount of money transferred . This last point is important. PayPal charges fees based on the total amount of money paid, not on the selling price of the item. That means if a $10 item has a $5 shipping/handling cost, the buyer pays PayPal a total of $15 ”and PayPal bases its fee on that $15 payment. PayPal's fee (as of Summer 2003) is either 2.2% (the Merchant rate for Business sellers with an average of $1,000 per month of sales over the past three months) or 2.9% (the Standard rate for lower-volume Premier sellers) of the transaction amount, plus an additional $0.30 per transaction. These fees are deducted from your account with every transaction. Activating PayPal in Your Auction Listings The easiest way to accept PayPal payments in your eBay auctions is to choose the PayPal option when you're creating an item listing. This is as simple as checking the PayPal box and entering your PayPal ID on the Sell Your Item page. When you choose this option, a PayPal payments section is added to your item listing. PayPal will also appear as a payment option in your eBay Checkout, on your post-auction item listing page (as shown in Figure 13.4), and in eBay's end-of-auction email to the winning bidder. Most third-party checkout tools will also recognize and accept PayPal payments. Figure 13.4. The PayPal payment section of your item listing, as it appears after a successful auction.  Collecting PayPal Payments A buyer can make a PayPal payment in a number of ways. They can -
Respond to the PayPal link embedded in the end-of-auction email they receive from eBay. -
Click the PayPal button in your item listing. -
Select the PayPal option when accessing the eBay Checkout page. -
Pay directly from the PayPal Web site. When a buyer makes a PayPal payment, those funds are immediately transferred to your PayPal account, and you receive an email notification of the payment. In most cases, this email will include all the information you need to link it to a specific auction and ship the item to the seller. In most cases, the buyers' payments come into your account free and clear, ready to be withdrawn from your checking account. There are two primary exceptions to this, however: -
eCheck payments, where a buyer pays PayPal from his or her personal checking account. Because PayPal has to wait until the "electronic check" clears to receive its funds, you can't be paid until then, either. PayPal will send you an email when an electronic payment clears. -
Buyers with unconfirmed addresses. Every PayPal member is encouraged to enter his or her street address. This address is then confirmed by PayPal. If you receive a payment from a buyer who has not entered an address (or whose address has not yet been confirmed), PayPal won't automatically authorize the transaction. Instead, you'll be asked whether you want to accept the payment, unconfirmed address and all. Only after you manually accept the payment will the funds be transferred to your PayPal account. | | You can also use PayPal to send end-of-auction notices to your high bidders, and to function as a checkout site for all your eBay auctions. As nice as this feature is, it assumes that all your customers will pay via PayPal, which they won't ”which means you probably don't want to use PayPal as your primary auction management tool. |
"Mike Sez" | | I prefer to empty my PayPal account at the end of each day, via an electronic transfer to my checking account. I find this a fast, no-hassle way to receive PayPal funds due. |
Withdrawing PayPal Funds You have to manually withdraw the funds due to you from PayPal; there's no automatic payment option available. You can let your funds build up in your PayPal account, or you can choose (at any time) to withdraw all or part of your funds. You have the option of okaying an electronic withdrawal directly to your checking account (no charge; takes 3 “4 business days) or requesting a check for the requested amount ($1.50 charge; takes 1 “2 weeks). Just click the Withdraw tab (from the Overview tab) and click the appropriate text link. Setting Up a Traditional Merchant Credit Card Account There's little downside to using PayPal for your credit card transactions ”except for the cost. If you're a real high-volume seller, you may be able to get a lower per-transaction rate by signing up for a merchant credit card account with a separate banking or financial institution. However, there are a few downsides to establishing a traditional merchant credit card account. First, it's more hassle than signing up for PayPal; you may have to submit various business documentation and possibly have your own credit checked. Second, getting everything up and running may also be more involved than simply plugging into the PayPal system. And finally, there may be upfront or monthly fees involved. caution  | Setup fees for a merchant account can range from $25 to $400 or more. Some services also make you purchase expensive software or credit card terminals. Since these fees vary so much, make sure you shop around before you commit. |
That said, if you can save half a point or more on every credit card transaction, it may be worth it ”if your credit card volume is high enough. A quick search of services available in August of 2003 revealed rates in the 2% to 2.5% range, which beats PayPal's 2.9% Standard rate. (Although it's no better than PayPal's Merchant rate, which you can qualify for if your volume is high enough.) Still, many eBay sellers prefer to handle their credit card processing directly, without having to rely on the PayPal service. If you're interested in establishing a merchant credit card account, here are some services that specialize in providing credit card services to online merchants : -
2CheckOut.com (www.2checkout.com) -
Cardservice International (www.expandyourbusiness.com) -
Charge.com (www.charge.com) -
CreditCardProcessor.com (www.creditcardprocessor.com) -
Fast Merchant Account (www.fast-merchant-account.com) -
Merchant Account Inc. (www. creditcard -acceptance.com) -
Merchant Accounts Express (www.merchantexpress.com) -
Monster Merchant Account (www.monstermerchantaccount.com) -
Total Merchant Services (www.merchant-account-4u.com) caution | | Know that using a traditional merchant account places you, the seller, at risk in the case of credit card fraud. If you accept payment from a buyer using a stolen credit card, the credit card company will charge back your account for the bad funds. That's one advantage to using PayPal to accept credit card payments; PayPal assumes this risk when you accept payments from one of its approved users. |
And here's another place to check out ”Costco. That's right, the Costco wholesale club offers merchant credit card processing to its Executive members , through Nova Information Systems. Costco waives the $25 setup fee, and offers a discount rate just over 2%. (Of course, the Executive membership itself costs $100, so you'll need to factor that in, as well.) See the Costco Web site (www.costco.com) or call 888-474-0500 for more details. The Absolute Minimum There are many different ways your customers can pay for the merchandise they buy; when deciding what types of payment to accept, keep these facts in mind: -
Cash isn't as attractive as you might think, and C.O.D. is darned unappealing. -
Cashier's checks and money orders spend just like cash, with fewer hassles. -
Personal checks take up to two weeks to clear, but are preferred by many buyers. -
Accepting credit card payments is a must for all serious sellers; you can do this by establishing a merchant credit card account, or by signing up for the PayPal service. |
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