PayPal Takes Over Large Retail But What About Small Business?

Last year, online money-handler PayPal announced that they were delving full-bore into retail markets, creating partnerships with major retailers in order to bring the PayPal experience to retail shoppers directly in-store. We have discussed the relevance of PayPal to small businesses previously, so this step wasn’t much of a surprise for the online giant.

Last month, PayPal announced that their expansion into this realm has increased significantly; they are now part of 23 major retailers including Home Depot, Guitar Center, Toys “R” Us, Barnes and Noble, and many others, which puts the PayPal brand into well over 18,000 brick and mortar shops across the country.

What relevance does this have for small businesses? There’s something of a trickle-down effect to the establishment of new technologies of course, and the start of this in the major retail markets means PayPal has their eye set on retailers of all levels. They’ve established relationships with POS providers Leapset, ShopKeep, Vend, and Erply, whom collectively work with 50,000 “mid-market” retailers offline.

However, PayPal themselves stated in their January announcement that their new deals reach businesses that include “multiple retail locations as well as those that might only have a few store locations but possess more sophisticated payment” and inventory systems. Language like that seems to indicate a lack of support for the smaller-sized retailers out there. If your business has but one shop with a POS system that is adequate but doesn’t blow anything out of the water, how could this be good for you?

Certainly, PayPal offers PayPal Here, which can be used with mobile devices, and gives you immediate access to your customer’s PayPal payments. The nice thing about PayPal Here is that they do not charge for the card reader, but they do charge a per-transaction fee of 2.7% with a swiped card and 3.5% plus $0.15 per transaction that is scanned or keyed in manually (instead of swiped), in the United States and Canada. (Charges are different outside of the U.S. and Canada; check out their FAQ for details.) There’s also PayPal Payments, giving your business more options to choose from (and a tiered payment plan of $0, $5, and $30 per month, depending on the service level you want) to help manage your online and offline transactions.

Ultimately, the PayPal penchant for establishing roots in the retail world is going to grow into something bigger, giving your business more options down the road. For the moment, the above solutions are inexpensive and give you quick access to funds paid in from your customers, and that’s really what it is all about – your customers. Making things convenient and simple for them means more opportunities for you to earn their business. For example, Jamba Juice recently made inroads with PayPal so that a customer can access their business through the PayPal app on their phone, allowing them to create a smoothie concoction, set a time to pick it up, and pay via (of course) PayPal through their phone. The customer avoids lines and waiting and has their smoothie waiting for them – a great idea that will certainly appeal to many. Think about how this kind of service could affect your customer’s perceptions of your business, and certainly move forward if your customers (and you) stand to gain.

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Michael Eckenfels

Michael is a writer and instructional designer, having worked in both fields for over a decade. He has had extensive corporate and freelance experience with a variety of business fields, including oil and gas, finance, health care, entertainment, and computer software. Michael is also an actor, having been in a wide variety of stage, series, and films over the last three years.

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