I have been using PayPal for almost all my business transactions for years now – however, I recently had to (briefly) open an old fashioned business bank account for a special project I was working on. I was amazed at how expensive and useless a regular business bank account is compared to PayPal! There were service charges for everything, on top of a monthly fee – and I couldn’t do half of the things I’m used to doing with ease with PayPal. Now obviously, if you’re a large corporation, there are reasons why you might need an old fashioned business bank account – but for the vast majority of sole proprietor creative professionals and other small business owners, PayPal is a much more useful alternative to traditional banking. Here are three reasons why I use PayPal for my business banking and not a old fashioned business bank account…
Disclaimer
I am not associated with PayPal in anyway – I just genuinely think that PayPal is a great tool for running a small business with a few benefits over traditional banking that might not be immediately obvious. If you don’t agree – or prefer to manage your creative business another way – please leave a comment below and tell us about it!
1. Invoicing
Invoicing with PayPal is a breeze! You can create, track and send invoices within PayPal – everything you need for invoicing is built-in. But the best part is that clients can also pay their invoices electronically with one click using either their own PayPal account or with a credit card or bank account. PayPal invoicing is by far the easiest way to invoice and collect payments from clients. PayPal currently charges 2.9% + $0.30 per transaction to process payments (plus a little more for global transactions, and a lot more for global credit card transactions) which can get pretty steep for big sales – but for day to day sales its totally worth the convenience (for my business anyway) – and about what you’d pay for a credit card processor regardless. If you’re still sending stand alone invoices and collecting paper cheques from clients – or even asking for bank account e-transfers – do yourself a favor and try invoicing with PayPal.
2. USD Transactions
This is probably less of a selling point for US citizens, but I love carrying a US dollar balance on my PayPal account! Think about how you have to deal with foreign currencies with a traditional bank: You deposit a foreign currency cheque and you get dinged on the exchange rate. Then if you buy something in a foreign currency and you get dinged on the exchange rate again – every time you exchange currencies you loose money. With PayPal, you can send and receive money in most mainstream currencies. For example, even though I live in Canada I get paid in US dollars and I buy things with US dollars – no exchange. As more and more merchants start accepting PayPal and other electronic point of sale payments, one day you could travel globally and never have to exchange currencies. (Once you get used to working around borders with a single currency in the global digital economy it becomes kind of obvious how old fashioned the idea of national currencies are – US dollars are already the default global currency and it makes you wonder how long it will take before it becomes official.) Finally, when I do want to transfer money to my personal bank account, I can wait until there is an optimal exchange rate, or just keep that money in PayPal.
3. Digital Economy Integration
As a creative professional, almost everything that I sell is delivered as ones and zeroes, so it makes sense that I get paid in ones and zeroes (as unnerving as I actually find the concept of your entire net worth represented by a number on a computer network – it reminds me of the clock on people’s arms from the movie In Time).
PayPal is seamlessly integrated with the digital economy – traditional banks are not. All of the agencies I work for pay me through PayPal. When I sell something online, I get paid through PayPal. When I buy something online, I pay with PayPal. All e-commerce platforms are integrated with PayPal. You could resist your global digital banking overlords – but that just makes life a lot more complicated.
What Do You Think?
Do you use a traditional bank for your business transactions? Why? What do you like about PayPal for business? What don’t you like? What other options are available? Please leave a comment below and let us know!
