PayPal is NOT a Checking Account!
PayPal has done a great job at making it easy for business owners to get started with “merchant” services without the lengthy application process that most merchant providers require.
Of course once you get started it then becomes one of those things you don’t think about again.
The next logical step is to then begin to pay your vendors out of pay pal, the money is already there so it is easy. This means now you will need to be doing bookkeeping for this account just as if it were a bank account.
And then you begin to use Pay Pal as a bank account, accumulating your cash reserves in your account.
Pay Pal is NOT a bank account!
The biggest issue with this is that your money is not FDIC insured. If PayPal closes its doors one day because it decides to, and it can because it operates in its own realm with its own rules, then you are left to try and get your money back on your own.
As a matter of fact, your money is not even sitting in a bank. What you have in fact done is loaned your money to PayPal for free!
Not what you thought?
I encourage you to review all your vendors on an annual basis. Really look at the fees you are paying and what the ROI is on that investment. Make sure you understand what you have agreed to.
AND please make sure to move your money out of Pay Pal and into your bank account.