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.
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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.
I now live in the Philippines and run my online business from here and will never use PayPal again. I get a far better service from AlertPay who accept card payment and will transfer it to any bank account you need it sent to. All you need is some form of proof of identity and a bill to prove the address you live at, plus of course the details of the bank you want money transferred too. Works the same as PayPal with the exception that its no good on eBay because its too much of a rival so they don’t allow it to be used. If you have your own website it works great!
There are just not so many western union outlets for many of us foreigners to use within easy reach in some of our countries so a payment into our bank account is the easier option than to travel many miles for a small payment. Obviously if the payment was big enough distance would be no problem
Thanks for your insight Dave
I have to be honest that I’ve never looked at AlertPay before. I’ll certainly check it out now!
And there’s Moneybookers, too
PayPal is just like the ‘mainstream’ payment option. Pero madami pang iba
Yes, Kristine that’s true. Pero since PayPal nga yung mainstream, karamihan ng clients, lalo na yung di masyado internet-savvy, yun yung hinahanap. I had a Moneybookers account before, but no one wanted to pay me through it