PayPal Vs Normal Business Checking Accounts
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PayPal Vs Normal Business Checking Accounts

PayPal vs Business Accounts

Ding ding. Round three. It seems that despite the increase in the methods available for businesses to send and receive payments, PayPal is sitting pretty and is in no danger of losing its crown as kingpin of e-commerce anytime soon. With growing disillusionment with the traditional way of doing things, businesses are taking an ‘out with the old, in with the new ‘stance in every aspect of their operations. So not having introduced you to the shiny world of Paypal and giving you an insight into what it has to offer, let me delve into the business psyche and let you into the reasoning behind the mass exodus from the business account to PayPal. But first my disclaimer, I don’t claim to speak for every organisation, just the few that I have come in contact with and of course, what I have learnt from running my own business here in the UK. Are you sitting comfortably? Then I’ll begin...

Firstly for me, it is cheaper. OK I know that I said so before but let me lay it down for you. When I was helping my mum set up her business and when I was setting up my own, the advice was ‘don’t use your normal account as your business account, set up a separate one.’ So I took the advice of the learned business support organisation and began searching using a series of independent websites that allows me to get an “impartial and unbiased comparison” of what is out there. What did I find?

 

Well underneath the glossy introductory offers and the small print was the fact that I had to pay to look after money that was mine. You had to pay to make transfers (£20, roughly about $33 as at 12/06. Refer to www.xe.com for updated conversions), pay to debit cash from the account, even to pay money in costs money. Of course, being a new business, it won’t cost you anything...at first. Hmmm...whatever. So when someone mentioned PayPal, where it wouldn’t cost me a penny to deposit or withdraw money (except a small fee if it’s outside the US), of course it took me a long time to consider my options (I think it was about two minutes) and then I set up the account, the rest, as they say, is history.

Secondly, it is easy and when setting up your business maybe stressful, setting up a PayPal account for it isn’t. You don’t even need a Tax ID (although I would strongly advise that you do) to set it up. I admit that banks have these stringent guidelines when it comes to identification and money laundering and that is very good and necessary, but when you are just starting out, it can seem daunting and sometimes unnecessary. But for me, not having to carry cash and cheques around to pay into the banks works for me and takes the strain out of banking (I don’t have to do much) and doing my annual tax returns (yippee!!).

Thirdly, I find it offers more protection than the average business account. The technology is both proactive and reactive. With PayPal, your customers don’t see any of your financial information, just your email address. They work with law enforcement agencies to help prevent fraud. Plus, which is the big kicker for me is that if there is a disagreement such as the item sold/bought not matching the description then PayPal acts as mediator to get it sorted which is nice (awwwww...) Every time a payment is made by you, you are sent an email. If you didn’t send it, then tell them and they’ll sort it and they wont charge you. Now, I have heard stories about how PayPal screwed them over and charged them for it. Well, ok. You can’t please everyone and there are those who get let down but with 150 million accounts worldwide, they must be doing something right...

So there you have it, I know business accounts have a lot to offer but for me, PayPal offers me more. I haven’t had any problems but I would like to hear your story, but whatever you do, take care readers....

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Comments (2)

Good afternoon, Ngozi. How's the weather there in the UK today? It's sunny and in the mid 70s here atop Walch's Mountain in upstate New York State. Great article. I'm not familiar with banking practices in the UK but here in the USA there are many different kinds of business checking accounts. With the account that I have as the sole proprietor of my home handyman service, there are no fees, hidden or otherwise, as long as I use my check card at least once a month. The only charges I have is for my checks when I have more printed. My business checking account also backs up my PayPal account automatically. I can use my PayPal account freely without having to worry about my PayPal balance because PayPal will automatically do an EFT from my checking account if it needs money to cover one of my PayPal transactions. I also have the PayPal Business debit card which I can use anywhere a VISA card is accepted, on or off line.

Hey there Jerry! Weather here was warm today and its looking like a mild night but we are expecting rain...typical. Anyways. Thanks for the comments and the vote. There are business current accounts (I think the equivalent is checking in accounts in the USA) and savings accounts. Some of the stuff is free but some you pay for. For example, one account, you can deposit a certain number of cheques free a month then you pay for the rest (its about 0.50p or about $0.82 per cheque).

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