Paypal as a Payment Gateway

The other day, a friend asked me, "What is the best way to accept credit card payment online?"

Everybody knows that you could organise a payment gateway with the local banks. It only sets you back a few thousand ringgit as a setup fee, and a few more hundreds in monthly fees.

In her business, she only receives a few credit payment a month, so a bank payment gateway is out of the question. I decided to do research and check what is the best and most effective way to accept credit payment, with the lower possible fees.

After a quick research, there isn't any online payment gateway that doesn't have any monthly fees. The lowest charged that I could find was from Paypal, of 2.9% + US0.30. Any other options either had a monthly fee, or a 5% charge!

I knew from the start that Paypal could accept credit card, but it does have some of it's own issues. About 2 years back, Paypal wouldn't accept payment if you didn't have a Paypal account. What it means is that, you MUST sign up, in order to pay with your credit card.

Recently, I read that they allow customers to pay, even if they didn't sign up or have a Paypal account. If that was true, then it would be the perfect payment gateway. The fees are low, and they are one of they biggest online payment system available.

So, I decided to create a "Pay Now" button to test whether it is true. Whether you could pay for it without a Paypal account. I recalled from the past, Paypal literally forced you to join, if you wanted to use your credit card to pay for something.

With the button created, I tested to see whether it was possible to pay without having an account. It was true, my hunch was right, I was unable to pay for it without my Paypal account. I then checked and read all the help files at Paypal, and it constantly showed up, that it was possible to pay without an account!

Hmmm, strange, Paypal openly advertise that you don't need to be a member to use your credit card. I then, decided to Google it and to read some external articles on this topic

I then found out that, it was true, Paypal do allow you to pay with your CC even if you are not a Paypal member. It however only allows this from a list of selected countries. That means, if you are in those countries, the options to pay without being a Paypal member will appear.

Their argument is that, for some "Money Laundering Act", for certain countries you must have their details on file if they were to pay with their credit card. By having an account, they would have your details, thus if there is any hanky-panky, they'll have details!

So that answers the question, Paypal would be one of the better payment options available. It has the lowest rate in the market, with no monthly fees.

The 2 bad points Paypal has as a payment gateway is that

• Cannot accept Ringgit as a currency (Able to accept USD, Pounds, AUD, SGD etc)
  
• Must be a Paypal member (in certain countries, including Malaysia)

If you are able to live with the 2 negative points of using Paypal in Malaysia, then you'll have a good method of accepting credit card payment online.

If you are having issues, withdrawing payment from Paypal, please read my two earlier articles

• Withdrawing Paypal funds via Credit Card
• Withdrawing from Paypal - The Issues!
  

Withdrawing Paypal Funds via Credit Card

Withdrawing to Credit Card, Debit Card or Prepaid Card
The funds that I withdrew to my Visa credit card came through. I withdrew on the 17 Nov and the funds came in yesterday. About 5 days in between. The rates that the local bank had converted for me is at about 2.9934 (RM to 1 AUD) which is a very decent rate. The rate is almost the market rate, as stated as x-rates.com. Overall, it it was a painless process and would be recommended for people withdrawing minimal funds from Paypal.

Advantage

• Ease of withdrawal as all Malaysian Paypal members would have a card with the system
  
• Quick and painless. Straight to your credit card. Able to withdraw Cash via ATM or offset your CC bills!
  

Disadvantage

• Max withdrawal limit per day of $500 USD
• Flat fee of $5 USD, which is 1%

Conclusion

With the ability to withdraw your Paypal funds to your credit card, anyone can now sell internationally on eBay. Perfect for those starting out. A little troublesome if you have huge funds coming in, or if you are selling high priced items.

Withdrawing from Paypal - The Issues!

This is probably one of the biggest issues Malaysian have when selling Internationally. Since anyone can setup a Paypal account, just by registering with an email address, but for the most of us, it would be difficult to withdraw the Paypal funds.
The sad thing is that we in Malaysia would not be able to withdraw the money directly into our local banks. If you were staying in Thailand or Singapore, you would, but not for us poor Malaysians.

You can buy many ebooks from online teaching you how to withdraw money from Paypal or ebooks teaching you how to set up an US bank account. I have personally bought all the books and read every single one. I'll tell you now, save your money and just follow my free advise.


Methods to withdraw from Paypal

• Withdrawing to one of the overseas banks in US, UK, Australia, Singapore or one of the listed countries. And from that overseas bank, you could TT back to Malaysia, or just use the bank's ATM card to withdraw in Malaysia. You can check the list of Countries that Paypal supports via this link.
• Withdrawing to your local Malaysian Credit, Debit or Prepaid Card.
• Selling your Paypal funds to other Malaysians who are able to withdraw their money.

Withdrawing to an Overseas Bank
I personally have an Australian bank account while I was residing in Australia. I have also applied for an US bank account through an agent while in Malaysia. I would say that applying for an Oversea Bank account would be the best option for long term trading.

Option 1:
I would like to say that, there are many ebooks out there that promises you the ability to apply for an US Bank account. You could try and apply for it after reading those ebooks at Etrade.
I had opted for the safer approach and went through an agent. I would say that "Don't risk it and get it done right, the very first time." Sure enough, I got my account approved within 3 weeks of application. It was worth every penny I paid for, as there would be a phone interview from Etrade. Of course, my agent had already armed me with all the possible questions and recommended answers.

Option 2:
Alternatively you could apply for a Hwang DBS account in Singapore. I was told that you don't need to be a Singapore resident and you wouldn't need a Singapore address to apply.

If you have noticed, both the options stated above, you are actually apply for a online trading account. Yes it is probably the only way they would grant you an bank account. All online trading accounts would need to be linked to a Bank account. Naturally when you apply for a Online Trading account, you receive both the trading account and a bank account linked to it!


Withdrawing to your local Malaysian Credit, Debit or Prepaid Card
Until like a month ago, we at Malaysia had no way of withdrawing our Paypal funds. Only recently they had introduce the ability withdraw to your Credit, Debit or Prepaid Cards. To withdraw via this method, there would be a $5USD fee involved and a maximum of $500USD withdrawal limit per day.
I would recommend this method when you are starting off on selling Internationally. If you are only starting off this is the most convenient method available. Only the you have huge amount of Paypal funds, you may consider applying for an overseas Bank account.
I have tried withdrawing via this method and will write more about it in another post.
Full withdraw instructions available from the following eBay link.

Selling your Paypal funds
This is probably the most unsafe method there is. At times desperate people would do desperate things. How it works is that, you offer to sell your Paypal funds to another Malaysian. They would normally transfer the agreed amount to your Malaysian bank account, while you send the agreed Paypal funds to their account. It may not be the best method, as you would not get the best exchange rates and you may not sell all your Paypal funds in one transaction. Trading your funds itself is another ball game... Is it safe?
You can view these trades at the following link.

Conclusion
I would recommend withdrawing your money into your registered Credit, Debit or Prepaid Card that you had registered with eBay. This is probably the most convenient method for the most of us, specially when you are just starting off selling on eBay.
When you have consistent sales, I would like to trade long term, you should apply for one of those Overseas Bank account.

Checklist - Selling Internationally with eBay

Checklist for Selling Internationally on eBay

• Credit, Debit or Prepaid Card
  
• An email address used for registration on eBay
• An email address used for registration on Paypal (may be the same as the above email)
  

That is it!!

Previously we would also need to apply for an US, UK, Australia or Singapore bank account to withdraw money from Paypal. Currently you will be able to transfer money into your Credit Card, or Debit Card straight from Paypal.


Credit, Debit or Prepaid Card
This is the most important thing that you'll need to start selling on eBay. My recommendation is to use a Prepaid Card. You'll have 2 choices for Prepaid Cards here in Malaysia. Both are readily available. The easiest is to rock up to 7-11 and purchase one.

Your options for Prepaid Cards

• AmBank NextG Mastercard
• Eon Bank MOL FREEDOM Mastercard

A few good points for using a prepaid card is for security reasons. In any event that there is any issues, or stolen CC numbers, the max they can ever withdraw is the amount you load into your card. In regardless, you should always practice safe security measures!!

Email Accounts
My recommendation is to used of those free email accounts like Gmail, Yahoo Mail or Hotmail. My personal recommendation is to use Gmail. A few key points that I have chosen Gmail over the rest are as follows

• IMAP support
  
• All your email will be centrally stored on the server. You are merely syncing your local mail client (eg. Outlook) with the master copy on the server, unlike POP services which downloads the mail. All your mails will be synced across all the mail client you use, whether it is your home computer, laptop or any other computer. It is perfect if there are more than one person running the eBay business. Even all the sent mail will be synced across all the mail client. Isn't that just cool!!
• All sent mail are stored
  
• In the event that you choose not to use the IMAP service and decide to go with the POP service, it would be good to know that, all your sent mail will be stored on the Gmail server. This is perfect when you are on the move, and would need to quickly check your mail using a web base client. "Hey, didn't I send the mail from my Outlook the other day..... damn the sent mail would not be shown on the web base client..." WRONG!! All mails sent via your gmail account would be stored.

I would personally recommend that you use 2 different email address to apply for your eBay and Paypal account. It is good to know that, you'll have all your day to day eBay emails going to one of the account, while the 2nd one would be use solely for Paypal. Please use two different password for both email accounts. This is for security purposes!!