Many people rely on PayPal to help with their online shopping needs. Some freelancers accept payment through PayPal from their clients as it makes it convenient and easy. However, there are some disadvantages to PayPal when you compare it to a traditional ACH deposit. The following will take a look at the differences between PayPal and ACH deposits to determine which one is ideal for your situation.

ACH DepositsMan Holding Cash
Many companies have relied upon ACH deposits to transfer funds into their employee’s accounts. The Electronics Payment Association controls the electronic network that processes numerous transactions in batches. These payments are sent out in a lot, making them more cost effective for both companies and banks. Employees normally do not need to pay any fees to have money directly deposited into their account. This automated transfer will happen when the company sets up the payment with the bank, allowing an employee to have money in their account in 48-72 hours. The transfer time will depend on the bank you work with and the bank the employer uses. Some clear a day or two faster than others. The ACH transfer will be complete once the confirmation by the receiving bank has acknowledged it.

Using ACH deposits will allow individuals to receive their payroll money into their account, and it can also provide additional options such as online bill pay, and person-to-person transfers. Some banks will not charge companies a fee for batch payments, while others work hard to keep their fees low. Compare the costs to the mass payment feature offered by PayPal to see the difference in saving money by using ACH.

PayPal Transactions
While PayPal is a common way to send and receive money, it doesn’t always provide the best option for freelancers and other employees. Companies may find that the fees to maintain an account are not worthwhile when you compare it to a traditional bank. PayPal only works for a company if all the employees have taken the time to set up an account, pay for and confirm the account. Linking the accounts can also take a few days to set up, which can cause a delay in payment.

Companies must also consider having enough money in their PayPal account to send out payments. This is hard if you have clients that do not pay through PayPal. You will need to transfer funds from another account to deposit into the PayPal account, which can also be delayed. Once the funds are in the account, you can send money to your employees, but you will need to pay fees. This can decrease the overall profit margin for the employees, and it can cut into useable income for the company, especially if you are making several payments. It is best to offer employees a large mass payment rather than making individual transactions as you will accrue account fees if you make individual payments.

The upside to PayPal transfers is that you can send money to people in different countries and currencies. It is sometimes faster to send payments through PayPal than writing a check and mailing it to the employee.

ACH or PayPal
There are pros and cons to each system. As a Writer, you need to protect yourself as much as possible to ensure you are getting paid. Using PayPal might be easy, but you will need to wait several days for an eCheck to clear, and then it can take 3-4 business days or longer before the money is transferred to your bank. Talk to your clients to find out if they can switch to ACH deposits as it will minimize the fees on your end, and give you the money in a timely manner.

Content Runner currently utilizes ACH deposits in order to facilitate payments between Users and Writers. If you have any questions regarding our policies or how payments are distributed, please visit our FAQ  and select “About Payment”. If you have any further questions, please contact support@contentrunner.com for more information.