Where’s My Money!
So, you’re now up and running with your online business and it is time to sit back and watch the money pour in – but where is it going to pour into?
“My bank account, of course,” I hear you say.
Well, unfortunately, it is not always quite that simple. If you are running an online business you will potentially be dealing with people from all over the world, some of whom may have bank accounts, but many of whom will not. International banking is a complicated business and fraught with issues in these days of money-laundering scandals etc. Besides, the fees involved in international transactions can be extremely high, especially if your online business is selling low-value products. The fees could be more than the price of the product. Nobody will want to deal with that.
As an unknown supplier, you are also going to run into trust issues with your customers. How can they be sure if they pay you the money, that you’ll send them the goods? It can get pretty messy to be honest, so in my experience, the best solution is to use a trusted middleman. There are often plenty of organisations in your country that will facilitate a payment system with international clients, but in my experience, the most trusted, easy to use and one of the biggest is PayPal. Now, PayPal has been around for close to 20 years and it is well established, highly trusted and in my experience very easy to deal with.
Setting up a PayPal Account is simple and something I would recommend you do immediately you start your online business. Just go to their website www.paypal.com and join up. They prompt you in all the right places so you set up exactly the type of account you will require. Two things I particularly like about PayPal are; 1/ They allow you to issue invoices direct to your clients and 2/ You have a permanent record of all your sales, for income tax purposes etc.
Like all these systems, they want their share of your transactions, so there are fees involved in most transactions. I think it is 5% of the net payment, which isn’t too bad for the convenience they provide. You can also receive payment in any currency and they allow you to convert that to your local currency (always, of course, taking their little slice of the action along the way).
You can easily withdraw your funds from PayPal in one of two ways. You can have it transferred to your local bank account. (They only charge a fee for this if the amount is below their relatively generous threshold) and the money takes only a couple of days, usually, to find its way into your bank account. The other option is to have your money transferred to a VISA card (note: only VISA – no other cards at this time). It is a nice easy way to get your money out of your PayPal account.
So, we’ve sorted out how to get your money to you, but how about paying for things online yourself? Many people either don’t have a Credit Card or are loath to use one online because of the inherent risks involved. PayPal can be extremely useful here also. Many websites accept PayPal as a payment option, so problem solved – as long as you have enough of the currency required in your PayPal account. They will convert your currency for you, to the required denomination, but of course, there is a fee involved. Their rate of exchange will be less than that advertised in the market. The other option is to get yourself a bank or other pre-paid Debit Card. These cards can be loaded with funds, in advance, and used just like a Credit Card, online. The two main cards available are a VISA or a MasterCard. Given PayPal’s preference for VISA, that’s the one I would recommend you use, as you can load it directly from your PayPal account.
So, that’s pretty much the easy way to handle those millions that will now be rolling into your online business, but before I go, I’d just like to relate a small anecdote to give you some idea of how convoluted running an online business can be from the perspective of international payments.
Now, I live in the Philippines, which has a banking system that is, shall we say, considered a little suspect by the rest of the world. At the moment, my main product is my books, which sell exclusively on Amazon. Now Amazon won’t pay directly to a Philippine Bank Account, so I have had to ask a friend to set up a bank account in the U.K. for my royalty payments from Amazon. So, each month, Amazon pays US$ to my British Bank Account, which then converts the dollars to British Pounds. My friend then transfers those funds to her PayPal account and transfers them to my PayPal Account, where I then have to change the British Pounds into Philippine Pesos, to transfer them to my Philippine Bank Account. At every step in this process, the bank or PayPal takes their little share – a whole lot of little shares soon add up, though. But, that’s the way it is and I have to live with it. Oh for the day when Amazon pays out to PayPal direct. I suspect eBay owning PayPal may have something to do with Amazon’s unwillingness to use PayPal for its royalty payments. Ah well, such is life!
Next time, I’ll talk a little bit about building your brand and getting your product/service out there and noticed. The “fun” part of online entrepreneurship – marketing!
I am an expatriate New Zealander, now living in the Philippines with my beautiful wife and two lovely daughters. At age 55, after careers in Journalism and finance, I finally discovered my true passion in life – writing. I am now a full-time author who has written or co-written seven novels, across differing genres.
My latest project is a Historical Romance set to the backdrop of the Philippine revolution of 1896, against the Spanish.
I believe in the power of the written word and the mantra that I live by and finish each of my blog posts on my website with is:
CHOOSE TO BE HAPPY!
EMBRACE THE OPPORTUNITIES LIFE PRESENTS TO YOU AND ALWAYS, ALWAYS FOLLOW YOUR DREAMS!
HAVE A GREAT LIFE AND SPREAD THE LOVE!
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