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Pay via PayPal with cash, not your credit card

A recent conversation with a client pointed out that some people aren't aware that PayPal payments can be made without using a credit card.

To set up a PayPal account — whether Personal, Premier or Business — you must associate the account with at least one credit card account and one bank account. But this doesn't mean you ever have to use the credit card as the source of payments.

These days, anything you can do to avoid increasing your credit card balances is a good thing.

PayPal eChecks

By paying merchants with PayPal eChecks, you are instructing PayPal to transfer funds from your bank account into the merchant's PayPal account. Your credit card balance will not be affected.

The official turnaround time for an eCheck payment is 3-5 business days, and the transaction depends, of course, on your having sufficient funds in your bank account.

Merchants will receive notifications ("eCheck payment in progress") as soon as you initiate the eCheck payment. You should understand that merchants are advised by PayPal not to consider the purchase complete until the money is actually deposited into their accounts. (nSiteful faithfully follows that advice.)

So, the potential downside to eCheck payments is that the products or services you purchase with them will not be delivered immediately. The potential upside for merchants is that the transaction fee they incur for eCheck payments is a low flat fee (currently $5.00). For purchases of about $160 or more, credit card payments and payments from a PayPal member's PayPal account balance (read on) will cost merchants more than that flat fee, since those fees are percentage-based ($0.30 per transaction plus approximately 3% of the purchase price).

Paying from your PayPal Account Balance

The other way to pay merchants without touching your credit card is with your PayPal account balance.

PayPal will always use your PayPal account balance as the primary source of funds for payments.

At any time, you can transfer funds from your bank account to your PayPal account. If you are a PayPal merchant yourself, you can keep funds in your PayPal account simply by withdrawing only a portion of the payments you receive, rather than the full amount.

Like credit card payments, payments from your PayPal account balance are (virtually) instantaneous, meaning there should be no delay in the delivery of your products or services.

Since an increasing number of merchants accept PayPal payments, keeping a little bit of money in your PayPal account is a great way to make immediate purchases without increasing that credit card balance.

Hope this helps!