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eBay payment methods - Q & A

Dave calls in to talk about better methods of payment for his customers online.

Rich Sloan:  We’re going to Dave out of Dallas, Texas.  Welcome to the show. 

Dave: Hi.  How are you guys? 

Rich Sloan:   Doing great.  How can we help? 

Dave:  Well, I’m interested in understanding better how I can get paid by my customers.  If I set up a store or I set up an auction on eBay, you know, I want to be able to take credit cards, and I’m concerned about, you know, as a small business how I would set that up.  Is PayPal the best way to go?  Everybody talks about PayPal, but I’m kind of wondering, you know, what I need to be looking at as a new seller. 

Jeff Sloan:   That’s a great question.  That’s kind of where the rubber meets the road, making that exchange, making that transaction and getting paid for it.  Dave:   Exactly. 

Jeff Sloan:    Kevin, what do you think?

Kevin Harmon:   Yeah.  How you get paid is somewhat important, I would imagine; right?  

Dave:   That’s probably the most important part, I think. 

Kevin Harmon:   Yeah, exactly.  So on eBay, you know, eBay owns the company PayPal, if anyone didn’t know that, and I’d say a good eighty percent or so of transactions on eBay go through PayPal.

Rich Sloan:   That’s eighty percent? 

Kevin Harmon:   I would say about eighty percent.  Yeah. 

Rich Sloan:   Yeah, yep.                            

Kevin Harmon:   And you definitely need a PayPal account for that. 

Jeff Sloan:    Well, break it down quickly, Kevin.  What does PayPal do for you? 

Kevin Harmon:   PayPal is basically a clearinghouse, sort of like an online bank, and they’ll take funds that are in your PayPal account and transfer it to the seller’s PayPal account, either funded by your bank or by a credit card, in some cases, too.  So you can use a credit card to purchase on eBay.  You can do it through PayPal, or the seller can also, obviously, have a merchant account that you could pay as well, but PayPal is pretty vital.  I mean, a lot of people use PayPal every day, and obviously it’s not just eBay.  They’re a pretty large company in their own right, and they’re in a lot of places now. 

Jeff Sloan:    Yeah.  It’s become a real trusted way to do transactions online. 

Kevin Harmon:   Yeah. 

Jeff Sloan:   I mean, it’s the branded way, you know?  People, when they think transactions, “How am I going to pay for it?”  PayPal has become, you know, kind of like, as you say, eighty percent of the transactions are done that way. 

Kevin Harmon:   Yeah.  In our business it’s actually more like ninety.  You know, ten percent of people still send us a money order, and that’s fine. 

Jeff Sloan:    And you had a follow-up question, Dave? 

 

Dave:  Yeah.  I’m just wondering, as a seller, do I need a merchant account through my bank or if I set up a PayPal account, am I done? 

Kevin Harmon:   You’re done. 

Rich Sloan:   Yeah.  It’s pretty turnkey. 

Jeff Sloan:   That’s the difference right there. 

Rich Sloan:  Yeah. 

Jeff Sloan:   That’s why it’s so effective, so easy to use. 

Dave:  Oh, great. 

Rich Sloan:   So thank you very much for the call, Dave, out of Dallas, but let’s dive a little bit deeper, Kevin.  So eighty percent of the orders may be through PayPal, but if you want to grow your business big time, you’ve got to have that other twenty percent covered, and you do that how? 

Kevin Harmon:   We’re about ninety percent PayPal; we’re about ten percent money orders, and actually a few personal checks.  So, believe it or not, we’ve gotten this far without a merchant account, but I’m sure that we’ll need to change that at some point, but PayPal, you know, we haven’t had any issues with PayPal.  They’ve done a great job. 

Rich Sloan:     All right.  Clearly, you’re not having any issues, Kevin.  You’re generating --

Jeff Sloan:    No.  It sounds like Kevin’s not having any issues in general. 

Rich Sloan:    Yeah.  Exactly.  Well, who knows?  Who knows?  Maybe when we come back --

Jeff Sloan:   We’ll be doing that in the next segment. 

Rich Sloan:   Exactly.