I'm Using PayPal (or Want to), and I Can't Figure Out...

Should You Use PayPal?

Q: "Should I use PayPal to process payments for the merchandise I sell on eBay?"

A: Absolutely, although PayPal is not mandatory. Accepting PayPal for the merchandise you sell on eBay gives you four huge benefits (among others):

1. You are able to receive payment immediately after a listing closes, without having to wait days for the buyer's check or money order to arrive in the mail and another several days for the check to clear your bank.

2. You are able to accept payments via credit card from your buyers without having to establish merchant accounts with each of the major credit card companies (a time-consuming and expensive proposition, especially for smaller seller).

3. If your listings qualify for PayPal's Seller Protection Policy (discussed in greater detail later), you have insurance for up to $5,000 each year for transactions that turn sour.

4. PayPal will handle foreign currency conversions so that you can accept payments from overseas buyers in U.S. dollars or any of fifteen other currencies.

PayPal charges you a fee for these services, of course, but the vast majority of eBay sellers think it's worth it.

PayPal Definitions and Types of PayPal Accounts

Q: "What's the difference between a confirmed and an unconfirmed address in the PayPal system?"

A: According to PayPal Community Education Specialist and PayPal Radio host Jason Miner (wsradio.com/paypalradio), an address that shows as confirmed means that a buyer has a street address registered with PayPal that matches a billing address tied to a credit card on a PayPal account. In some cases, the confirmation may have come from PayPal examining the buyer's PayPal account history. Confirmed addresses are a part of the requirement to be covered by PayPal's Seller Protection Policy.

Q: "What's the difference between a verified and an unverified account in the PayPal system?"

A: If a U.S. account has verified status, it means that the account holder has added a bank account and completed the verification process. When a bank account is added to PayPal, two small random amounts are sent by PayPal (at no cost to the account holder). The account holder logs in to his or her PayPal account and inputs the random deposit totals. This establishes that there's a good path between PayPal and the bank when sellers are ready to withdraw funds.

Q: "What is the difference between a Premier and a Business account on PayPal? What type of account do I need to have to sell on eBay?"

A: To sell on eBay, you need to have a Premier or Business level PayPal account, according to PayPal Community Education Specialist and PayPal Radio host Jason Miner (wsradio.com/paypalradio). Many buyers start with Personal Paypal accounts, but those have limitations on how much money can be received. Additionally, Personal accounts cannot receive credit-card-funded payments for eBay purchases from buyers, although Miner points out that Personal accounts can receive a limited number of non-eBay credit card payments annually at a higher fee rate (see the PayPal Fees link at the bottom of any PayPal page to learn more). You can upgrade a Personal account to Premier or Business status from your Account Overview page after logging in.

A Premier account allows you to do business under your own name and receive any type of payment from your buyer (such as credit card, balance, or eCheck), says Miner. A Business account allows you to do business under a Business or company name. With a Business account, you'll be asked to provide some additional information about your main selling category, monthly payment volumes, and annual online sales revenue. You can also add a customer service e-mail address and customer service phone number to business accounts.

The biggest difference between Premier and Business accounts, according to Miner, is that Business accounts have an additional feature called Multi-User Access. This allows the primary account holder to create logins and passwords for employees to access the account and create selectable levels of access for those logins. "For example, the primary account holder may choose to have a webmaster with technical knowledge access the account to create logos, but limit that person's ability to withdraw funds or view the account's balance," says Miner.

Both Premier and Business accounts currently start out paying a fee of 2.9 percent plus thirty cents ($.30) per transaction for payments received within the United States, with a i percent additional fee for international transactions. Fee rates can be reduced with qualifying volumes. Learn more about this through the Fees link at the bottom of any PayPal page.

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