How Does PayPal Work for Sellers?

PayPal is a financial services company that allows its users to send money across the Internet much in the same way they would send an email. PayPal originally rose to prominence as the payment processor for users of eBay's auction site, but today the company's users range from single sellers to major online companies. From spring cleaners looking to sell old possessions online to small business owners seeking to expand their company's e-commerce abilities, millions of users sell with PayPal.


PayPal Accounts

There are three primary types of PayPal account, and sellers can accept payments with any of them. A Personal account allows a seller to receive payments from other PayPal users, but has a withdrawal limit of $500 per month. Connecting a bank account or credit card allows a seller to upgrade to a Premier account, which removes this limit and offers the ability to accept credit and debit card payments as well. A Business account is the same as a Premier account, but allows access by multiple users. The standard fee for selling via PayPal is 2.9 percent plus 30 cents per transaction. In addition, the $5 per month PayPal Payments Advanced allows sellers to integrate PayPal into their e-commerce website, and the $30 per month PayPal Payments Pro grants the ability to accept credit cards by phone, fax, and mail.


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When a customer pays via PayPal, the money may take some time to reach a seller's account. Generally, if they pay from a standing PayPal balance, use a credit card or pay from a linked bank account, PayPal will forward the payment to the seller immediately. If a customer chooses to pay via eCheck, the funds will take three to five business days to post, much in the same way a paper check would. Once the money clears, the seller can send the order to the customer, but should make sure to use a trackable shipping method to provide a record of the transaction in the event of a dispute.


Seller Protection

PayPal offers sellers a certain level of protection from fraudulent purchases if they follow their Seller Protection rules. First, sellers should only ship items to the address PayPal provides. This is the address PayPal has on file for the customer, and in most cases, the buyer must verify and back it with a bank account or credit card. Sellers should also ship using a method that includes a tracking number, to provide proof of shipment and delivery. In the case of goods worth more than $250, sellers will also need to require a signature upon delivery, and should ship the merchandise within seven days of purchase. If you follow all these rules, then PayPal will guarantee the payment for any shipment of actual, physical goods.


PayPal Here

Sellers wanting to accept credit card payments in face-to-face transactions without going through the hassle of setting up a merchant account will find PayPal Here a useful account add-on. PayPal offers a free card reader that connects to any iOS or Android device, allowing sellers to accept payments anywhere they have a connection to the Internet. Any payments processed through the PayPal Here system incur a flat 2.7 percent fee.



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