For supplier organizations, one of the most important issues around efficiently running the operation is expediting customer payment. In our 2015 Perceptions Study, Research and Analysis of Supplier Activity in the Areas of: Invoicing, Payment and Remittance, Credit and Collections, 83% of respondents indicated that getting paid faster was the most important issue when submitting invoices. Respondents also indicated that they prefer ACH payment over paper checks by a margin of more than 2 to 1 (63% vs 25%, respectively). Not to be lost in this assessment is the fact that 23% of respondents are currently paid by other electronic means such as PayPal. It’s understandable that ACH is a highly preferred method of payment, as it can now result in payment the same day once the transaction is initiated.
Organizations interested in faster payments should also consider PayPal, the worldwide online payments system that facilitates online money transfers. Part of PayPal’s early history was as a subsidiary of eBay that was spun off as an independent, publicly traded company in 2014. PayPal has historically positioned itself as an electronic alternative to more traditional methods of payment such as checks but has made strides in the last few years as a B2B alternative to credit cards, wire transfers and even ACH payments.
While transactions can be completed in minutes, there are costs associated with maintaining certain types of business-related and e-commerce PayPal accounts. Though it may not be for every organization, there are several types of PayPal accounts organizations should consider when maximizing the customer payment mix.
PayPal Payments Standard & Express Checkout
- This is the most basic account offering and has no startup costs, termination fee or monthly fee attached. Users will pay 2.9 % plus $0.30 for each U.S. transaction and a 3.9% fee per transaction for International transactions. With this account you are able to accept payments from credit cards or other PayPal accounts. You can also send invoices and take payments made from mobile devices.
- Standard also allows organizations to create online invoices and allows customers to pay directly from those created invoices.
- For this version, PayPal offers discount credit card processing for registered charities with 501(c)(3). For transactions up to $100,000, users pay 2.2% plus $0.30 per instance. Specially tailored fees apply for transactions over $100,000.
PayPal Payments Advanced
- Advanced in an all-in-one solution ideally suited for online stores to collect payment directly via credit card, PayPal Express Checkout or PayPal Credit service. Merchants can host checkout pages on their website or let PayPal host the checkout via their secure servers.
- Advanced comes with a $10 per-month fee in addition to 2.9% and $0.30 for each transaction. Along with the capability to send invoices and take payments from mobile devices it also allows organizations to customize the look of their checkout page.
PayPal Payments Pro:
- The top tier PayPal account, Payments Pro features a $35 per month fee as well as a 2.4% plus $0.30 per transaction charge. Along with the benefits of a standard account, it gives users control over design and also facilitates payment over the phone, by fax or mail using a virtual terminal. However, using this feature will mean the user will pay different transaction rates but the monthly fee remains the same.
Getting started with PayPal is easy – an email account is all that’s needed to get rolling. It’s just one of the many methods a company can use to receive payment from customers. Many companies still accept paper checks, use ACH, electronic funds transfers, wire transfers, credit cards or P-cards. Your organization may decide to add PayPal as an additional method in order to maximize the customer payment mix.
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