12.SepFrugalPinoy Q&A: Do you need a PayPal account to make money online?
FrugalPinoy reader Cynch sent me this question via email:
Is it an absolute “must” that a person who wants to earn money online has to
have a PayPal account or bank account, there’s no other way to receive money?
The simple answer is no, you don’t absolutely need a PayPal account, but it can make things more convenient - especially if your clients or customers are overseas. If you only deal locally, then PayPal is more of a privilege than a requirement, and may in fact cost more in the long run.
Why is it more convenient?
If you’ll be dealing with clients internationally, there are good reasons why you should have a PayPal account:
- It’s automatic. Unlike most money transfer services where you have to fill up forms - whether online or offline - Paying someone through PayPal just requires a few clicks. Plus, you can add PayPal buttons on your site to make the payment process automatic.
- Most foreign clients prefer to use it. This is because the use of PayPal is so common in the US, UK, and other developed countries.It’s a widely recognized brand, which is why it’s almost always the service that people use.
What are the alternatives to a PayPal account?
If you don’t have a PayPal account, there are other ways you can get paid for your online ventures:
Xoom. I’ve always used Xoom throughout my online writing career. They can deliver the money to your house or you can pick it up at a Banco De Oro branch near you.
You can sign up for a Xoom account yourself, but it’s important to note that most foreign clients/customers don’t have a Xoom account, and they’ll need to fill out a form with your name and address, etc. Plus, they’ll need to pay extra for fees (while PayPal just deducts the fees from the total payment). This might seem like such a hassle to some customers/clients if they’re not used to the process. You can work around this by including the transaction fees in your prices, so that clients aren’t surprised that they have to pay extra.
The good news is that Xoom accepts PayPal payments, so if your clients are insistent on paying you via PayPal, you won’t have to worry.
Ikobo. Another online money transfer service is Ikobo. I’ve never used it personally, but it’s a widely known service that many people trust. If it’s your first time to use Ikobo, you’ll be receiving a Prepaid Visa card on your first transaction, and you can use that card to withdraw the funds. Shipping the card to the Philippines costs from $11.95 to $24.95. Since that’s the case, it’s best to make your first Ikobo transaction with a relative rather than with a client - they’re not going to be too happy about the extra fees they have to pay. To learn more about how to use Ikobo, click here.
Western Union. If you don’t have a bank account, Western Union is a good alternative, except you’re going to need 2 ID cards to claim your money. There are several branches here in the Philippines where you can claim your money, and even pawnshops and banks (such as BPI and UCPB) allow Western Union transactions. You can use this form to look for a branch near you. Unlike Ikobo and Xoom, you can’t create an online shopping cart via Western Union.
I hope this answers your question. There are more money transfer services out there, but the ones I’ve mentioned are by far the most reliable and the most established.
Do you have any personal finance or online moneymaking questions? If so, kindly click here for the contact form, type in your question, and I’ll answer it here at FrugalPinoy.
This entry was posted on Friday, September 12th, 2008 at 5:11 pm and is filed under Earning, FAQs, Online Income. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
We discuss savings, frugality, and other money matters. To learn more about Frugal Pinoy and the author, 
Paypal isnt a requirement to earn money online but its a very good tool for merchants. Some disadvantages are the fees when receiving money and some strict security measures that delays some tranfers of funds. But overall, it works really well and very secured.
Yeah, I agree that it isn’t a requirement. It’s important for service providers, though. I find that many clients tend to shy away from contractors that don’t have PayPal accounts. They just don’t like the hassle of Western Union and other payment methods unfamiliar to them.
Hehe parang ang tamad nila! But that’s the attitude I used to get from most foreigners.