PayPal has been in the limelight for a long time as the top online banking service provider. Although many businesses have praised it, many others have raised problems with PayPal services. They include:
- Money Transfer Charges
PayPal imposes fees for transferring money to a credit card or for receiving particular funds. PayPal may also charge fees to users with business accounts. The organization may at times charge fees for each transaction made on the business account. This is especially hard seeing as business accounts may have various operations in a day.
To have each transaction charged separately is bound to be costly to the firm. Other online financial services have an absolute rule or charges for transactions that fall under a particular bracket. Further, some transactions are not charged at all or are free for specific accounts.
- No Notice on Frozen Funds
The last problem a business or individual needs is to have their accounts frozen and not being notified about it. The lack of notification may lead to losses in trade deals or jeopardize a relationship in a case in which one corporation was expecting money from a different firm, or order was placed on items, or a consignment was being expected. Lack of funds in a business account or inability to access them will cripple the business in a way that it may not be able to recover from.
When PayPal freezes your account, it is impossible to transfer funds or receive money to that account. It may also suspend cash sent for an item bought online, and the organization may decide not to lift the suspension until the said item has been delivered. An alternative financial service such as My Payment Savvy will notify the customers of any changes made to their account. In this age of technology, the notification may be as simple as an email or a text message.
- No Protection
Although PayPal operates as a bank, it does not have security services a bank provides as outlined by the Federal Deposit Insurance Corporation. For this reason, customers run the risk of losing their money should PayPal be closed. The FDIC rules streamline banks, but the same regulations do not guide PayPal.
Insurance is key, not just for the financial institution, but also for the money depositors have placed in the bank. PayPal not having such guidelines is a ticking time bomb that business owners should stay away from. Alternatively, one should seek the services of an ordinary bank since most of them have online services, which are accessible 24hrs a day.
In conclusion, PayPal does have advantages, such as being available in many countries. However, the disadvantages seem to outweigh the benefits. At the end of the day, business is bound to make losses sometimes, but these losses should not be made in ways that could have been avoided, such as placing one’s money in an institution with no solid foundation and run the risk of possible collapse.
Today, actual banks that are guided by the law sponsor several online banking services and, therefore, depositors’ money is safe and the banks can be held accountable for any problems that may arise.