Monday, November 30, 2009

PayPal Accepts MYR and Why We Should Care

By Nora Ismail | November 2, 2009

Shopping bags
Shopping bags, originally uploaded by richmondsquarephotos.

PayPal is the biggest e-currency on the internet that lets you make payments and transfer money online without having to expose your credit card or banking account details to merchants. It’s the most preferred payment method on eBay, which is expected considering PayPal is an eBay-owned company. D’oh!

However, PayPal didn’t make any sense to me – and most Malaysian businesses – before the end of last month. Although I’m a zealous online shopaholic, I’ve never given the popular e-commerce service a second thought and I’ll tell you why:

  1. I don’t have a credit card
    For Malaysian users, signing up for a PayPal account requires a credit or debit card. Although I have a debit card, I refrain from using it in fear of suffering from an overdraft nightmare.
  2. Most local web stores offer the quick funds transfer option
    Most local online businesses, especially the smaller ones, offer the funds transfer option, which is great owing to the fairly recent boom of internet banking – and soon, mobile banking – in Malaysia.

But with the recently added capability of accepting Malaysian Ringgit and letting users withdraw PayPal funds from local banking accounts, I see them in a whole new light – the kind that drives my online shopaholic hormones to, in the words of an Iron & Wine song, “such great heights”.

Here are 4 reasons why I personally think the new PayPal “revelation” could be great for Malaysian consumers and businesses:

  1. You no longer need a credit or debit card
    PayPal now lets us link our banking account to our PayPal accounts, which means we can directly transfer funds from and to our banking accounts. That eliminates the need for a credit or debit card and youth-targeting businesses won’t have to worry about isolating their market.
  2. It’s cheaper
    Withdrawing Funds
    Previously, you can only withdraw funds to your credit or debit card, which costs USD5 (now RM20) per withdrawal – that’s a lot of money, especially when you intend to withdraw a small sum. Withdrawing RM400 or more from your banking account is FREE and a reasonable RM3 is charged for withdrawing amounts less than RM400.
    Foreign exchange what?
    Because PayPal fees for Malaysian users are now charged in Malaysian Ringgit, we are better protected from foreign exchange losses.
    Free – and easy – to use
    If and when more consumers use PayPal, local business owners no longer need to spend on Internet merchant accounts to process credit and debit card payments, which are known to be rather costly. And customers with credit cards still can pay without having a PayPal account.
  3. It’s safer than most of our options right now
    We no longer need to perform unregistered i.e. unsafe 3rd party fund transfers or enter our credit card information again and again. With PayPal, not only are we able to hide our financial information from merchants, we can also file payment disputes in case of fraudulent sellers with its fraud detection and prevention feature.
  4. More international than international credit cards
    If you’ve shopped online, you would’ve also come across international web stores that don’t accept international credit cards. This is where PayPal comes in. As for sellers, that means you can open up your products or services to both domestic and international customers.

But as with most online services, there are always pros and cons. While it has received a share of disapprovals from sellers, buyers on PayPal seem to be more than happy with this payment gateway alternative.

I anticipate the day that more local offline businesses – especially small retailers and independent sellers – get online. But for now, I’m going to get me some David and Goliath t-shirts with my shiny new PayPal account.

Useful links:
Easy Steps to Create a PayPal Account
PayPal Accepts Over 20 Malaysian Banks
PayPal Accepts Ringgit Malaysia and its Benefits to Malaysian PayPal Users
How to Link PayPal to Your Malaysian Bank Account

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