Ask the cubicle expat: Should I use PayPal to get paid?

Traci asks: Do any of your clients pay you via PayPal? I have an account, and I’ve seen that other freelance folks sometimes list it as a payment option. Has it worked for you? Any pros/cons to consider?

I answer: I have not used PayPal to receive payment. Nor do I plan to anytime soon. Not when I can get clients to send me a check or make a direct deposit payment into my bank account, which, as far as I’m concerned, is accounts receivable nirvana.

Here are what I see as the pros of using PayPal for freelance work:

• If you work with clients halfway around the world, it might be easier to get paid this way.
• If you sell your wares (earrings, silkscreened T’s, hand-crafted journals) through your site or blog, it’s an easy way to accept credit card payments. You definitely don’t want countless people you’ve never met sending you checks for $25.
• If you work in a super-tech sector where everyone uses PayPal, you might want to apply the “when in Rome” philosophy. Clients don’t appreciate freelancers who aren’t up to speed and throw a wrench in their carefully crafted systems, accounting or otherwise.
• I imagine PayPal can enable getting paid faster. Like direct deposit, it does cut out the step of having to deal with a hard copy check. But there’s something that never fails to excite me about opening my P.O. box and finding a check there for a writing job well done from the comforts of my home office.

Here’s my take on the cons:

• Doesn’t PayPal take a cut of your pay or charge an annual fee? Why should I do this when I can get paid for free?
• Not all clients use or want to use PayPal. Again, if you’re selling a service (rather than a product), you want to make it easy for them to work with and pay you. Meaning, you want to abide by the payment systems they have in place. (See pros, above.)
• I hate the idea of leaving my bank account or credit card info with an online service. Here’s a perfect example of how things can go horribly awry.

I realize I may be old school in my views on PayPal (and web banking in general), so I welcome your input, especially if you’ve used PayPal to receive or make freelance payments.

Got questions about self-employment? I got answers. And if I don’t, someone else around here is bound to. Here’s where you can reach me.

8 comments January 21st, 2008