MBA1550 Q&A Wednesday: Do I need to accept PayPal with my new business?

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If you have a question you want to ask, just email me over at omar100mba.net Today's question is from Rashid and Rashid asks do I need to accept PayPal with my new business? Hey Omar, I'm launching a new website and I'm wondering do I need to accept PayPal along with just credit card? Do customers prefer PayPal over credit card? Is it a deal breaker? Is it a must have? Thanks Love the show Rashid. Thanks for the question rashid. Good question. PayPal was the dominant checkout processor for many many years. But things have changed over the years and more and more people are comfortable with entering their credit cards online. Now that doesn't mean PayPal is not a good choice, but we get into the details of if. Is it a must have, do you need it or can you launch your Business without it and then maybe add it later. We get into all that in today's Q and A Wednesday. So let's get into it. Let's get down to business. So Rashid is asking, does he need to have PayPal as an option at checkout for his new website, or can he just accept credit cards with no Pay with PayPal option? Now, the Pay with PayPal option is a good option for many people because they are just used to using PayPal. They feel like for some reason it's more secure. That's more secure than entering their credit card. But that's not all people. Some people feel very comfortable putting their credit card online, and this number is growing more. People are feeling a lot more comfortable with that. Some people find the PayPal checkout process a little bit confusing. So there are people all over the place when it comes to this topic. But I'm going to give you my advice from a business point of view. Providing the option to check out with PayPal is a good option, especially if your business is a B2C company, so you are serving a customer directly, not a business. Having PayPal as an option for checkout is a good idea if your business is a B2C. B2C means business to consumer, opposed to B2B, which is business to business. So if you're selling products straight to the consumer, like you have an E commerce store, you're selling skateboard or clothing or food, you're selling direct to the consumer, versus if maybe you're selling a piece of software that other businesses are going to use or a service like photography for business or video editing for business, Consumers in general will be more likely to prefer PayPal versus businesses. Why? Because businesses are pretty savvy when it comes to finances. Uh, they actually prefer to have it on a credit card, a business credit card, so they can claim an expense easily with their accounting. There's less fees with credit cards than with PayPal. If this is a reoccurring charge. It's also very easy to kind of track on their accounting software, all of that. So most businesses, when they're buying something, they want to put it on the business card. They want to put it on a credit card, even if it's a small business and they're putting on their personal credit card so they can track it. They, they will prefer that. I can speak out of my own experience as a business owner. I only use PayPal when I have to. If I have to pay somebody via PayPal, I'll do it, but I prefer not to if I have to pay for an expense, I will pay for it by credit card. Unless the only option is PayPal. Many people believe that, you know, credit cards are not as secure as PayPal. That's not necessarily true. And the actual recourse to getting your money back can be easier. With credit card. Say, for example, you see a charge that you didn't verify. You can easily call your credit card company and say, hey, I didn't authorize this charge. They will give you the credit back. Most credit card companies will do this automatically. They'll file a charge back and they'll fight for you and make sure that you get that back. Now, PayPal does something like this quasi, but they won't give you your money back immediately. It's a longer process. It's a little bit more complicated. And businesses know this, so that's why they prefer credit card. So Rashid and everybody who's listening, if your business is selling to other businesses, then having a credit card checkout alone is perfectly fine. You won't lose too much business without the PayPal option. It's a nice to have, but it's not a must have. If you are selling straight to consumer, I would probably say PayPal is a good integration. And if you are using something like Shopify or some sort of, you know, shopping website builder, they'll have, you know, their own integration with PayPal, making it easy. So it's not a big headache. Now PayPal does offer the idea of, like, you can accept credit cards and PayPal and PayPal will charge or process that credit card. The issue I have with that is that PayPal sometimes through that process makes it a little bit confusing for the consumer. They're not really sure if they're actually paying via PayPal or via credit card. Unless you have a different interface on your website that makes them, you know, put in credit card information with a different, you know, UI, then it won't be clear if you're using the PayPal checkout pages. You know, they have the option of paying via credit card or using PayPal. The problem with this process and why it's confusing is because if you use a credit card that you have on file or any card on file with a PayPal account somewhere, even if you're not signed in, PayPal will recognize it and say, hey, you have a PayPal account with us. You know, go ahead and sign in now. And it's just a little bit of a tedious process. So I'd recommend if you're selling to consumers directly to have credit card and PayPal separate. Don't just use PayPal for everything. I was doing some research lately and actually PayPal's losing a bit of market share. Not because credit cards are becoming the norm or people are more comfortable with putting credit cards, but actually Apple Pay is, is gaining a lot of ground. So that's something you may want to consider. If you have some sort of integration on your website with Apple Pay, if that's kind of built in and it's easy to do, I would look into that. Because Apple Pay is a lot more secure and a lot faster and convenient for your customers, especially if you have people buying on mobile, if they're buying off your site from their mobile device or through an app. Apple Pay is becoming a big player in checkout. And I know that not everybody has an Apple device and this only for people with iPhones or iPads, but Apple Pay has become really the dominant player when it comes to mobile payments. It's something to consider, but I would not worry about it too much at launch. You can add it later. So to answer your question, Rashid, if you're selling to consumers, I would have PayPal at launch. If you're selling to businesses, I wouldn't say it's a must have. It's a nice to have later down the line Packages by Expedia. You were made to occasionally take the hard route to the top of the Eiffel Tower. We were made to easily bundle your trip. Expedia made to travel flight. Inclusive packages are atoll protected.

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There's one more thing I want you to consider when it comes to PayPal. If you run a subscription business, meaning that you are going to be charging people month over month, whether it's a membership or a software or whatever it is, PayPal has this option. Okay, but it's not straightforward. Meaning that people can subscribe for automatic payments with PayPal. So when they check out your website, they say, yes, I want to be part of your membership. PayPal will charge their account automatically every single month or every year, depending on the plan they chose from your site. But let's say the customer wants to cancel there's no way for you to talk to the customer, try to reconcile what the problem is or even keep track in your own database who's canceled. If they don't go directly to you and cancel through your own website or through your own customer service team, people can cancel subscriptions straight from PayPal. They can go into their options and Cancel, say, hey PayPal, don't pay this payment every single month and you'll be none the wiser. You need to make sure that your website, your app will automatically recognize this person's not paying and you need to remove access and you need to also obviously make a note in your database that this person has canceled. And any procedure that you have for canceled customers, whether it's an exit survey or a call or whatever it is, you need to kind of have that all implemented automatically. So as you can see, it's not super straightforward. When you have a credit card integration, you're using a payment processor, something like Stripe or something like that and there is a little bit more connection between you and the payment. So something to keep in mind, this is less of a problem if you have, you know, one off products like an e commerce store and not a subscription based business. Thank you so much for listening to the Underlay show and thanks Rashid for asking a great question on Q and A Wednesday. Again, if you have a question you want to ask, you want me to answer it, I can do it right here on Q and A Wednesday for you. Just leave me a quick Message over at omar00mba.net Shoot me over an email and I'll take care of it right here on the show. Before I go, I want to leave you with this. Business is about iteration. You always should make sure you do the minimum to get you off the ground to get started to launch. This is why I love this question by Rashid. Because he's about to launch his new business, new site. Congratulations Rashid, by the way. And he wants to know, hey, do I actually need this or can I just, you know, launch without it? And this is important because you want to start making money. You want to start, you know, offering your products and your services. You can get some feedback and you start improving and you can always iterate and add other payment options in the future but right now you need to get started and I love the fact that he has that urgency and just keep that in mind with every decision you make before launch. Thank you so much for listening and I'll check in tomorrow's episode. I'll see you then. Take care.

Adp knows Anything can change the world of work. Like what if a blocked shipping port caused a worldwide coffee shortage? Suddenly, businesses are scrambling to manage an increasingly drowsy workforce. Productivity slips 20% just due to the extended time it takes to conduct a job interview while yawning. Anything can change the world of work. From HR to payroll. ADP helps businesses take on the next anything. ADP always designing for people.