The Paypal Problem - Strategies for Handling Paypal
Anyone that works on the Internet knows the value of having a PayPal account. There are few companies that perform services online that do not accept PayPal as a payment option. At Content Customs, 95% of our business is done through PayPal including accepting payments from clients, making payments to advertising clients and domain sellers and paying our staff.
However, entire sites have been devoted to the problems associated with PayPal and you can easily review the disadvantages of accepting PayPal as your primary payment method.
Planning For the Worst
One of the things that I always tell people that use PayPal is to ALWAYS have a bank account associated with the account. You may have had a PayPal account for many years and have since closed the primary bank account listed on the account. If you have an essential PayPal debit card, it might not seem to make very much of a difference. However, should your PayPal account ever get limited, you will not have access to your funds and might not even be able to accept or send payments for several months.
For this reason, if you have a PayPal account, never leave very much money in it. Keep the money you will need to go a few days of spending or paying employees and immediately transfer the rest to your primary checking or savings account. Remember, you do not have to have any money in your PayPal account to make payments.
If you have a balance of zero and attempt to make a payment, it will simply be deducted from your primary bank account. In the event that your account gets limited for a few months (something that PayPal can do for no reason at all), it won't be anywhere near as detrimental if all of your money is in your bank account.
Using Your Savings as a Safety Net
As much as PayPal may like to, they have absolutely no control over the bank accounts associated with the account. Once it is off PayPal, they have no control over what you do with it. To make sure that I am always prepared for a potential problem, I make absolutely sure that with every pay check, I withdraw about $100 into a savings account for an emergency, hit my daily ATM limit to pay bills and have pocket money and transfer the remaining balance into my checking account. I would suggest that anyone that has a PayPal account take the time to open a savings as well and associate it with PayPal.
Hopefully, you will never have a problem with PayPal. If that is the case, having a well developed savings account can give you the money you need to open that new web site or take part in a new investment. Once you get to enough money to cover you for three months in the event of an emergency, you can begin treating your savings account payment as a bill from every check. Having that extra cash around can be a life saver.
1 Response to The Paypal Problem - Strategies for Handling Paypal
February 11, 2010 at 3:14 pm
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