From time to time, we are asked if it's better to use PayPal instead of credit card processing. PayPal is a giant company that offers many services. This article and its caveats apply specifically to ordinary PayPal accounts. The restrictions and issues discussed here do not apply to those types of accounts.
We recommend that you set up your own credit card processing account (e.g., a merchant account) for taking guest payments, not just PayPal. You can still accept PayPal at the same time, but having credit card processing has a number of advantages.
Automation
Credit card processing means you access the guest's card on file, encrypted and stored in the booking. The second payment and security deposit are automatic on the correct date, without needing action from you or the guest. If a payment fails, notifications are sent, and the guest provides new info.
You can also bill for other charges without re-entering card details. With PayPal, card info isn't passed to our system, so the guest must re-enter payment each time, including refunds for damage deposits, which PayPal doesn't support as holds. Our guest forms facilitate this by allowing you to request payments directly, but it's manual and prone to oversight, adding more work for you and the guest.
Direct access to the funds
PayPal holds funds until you manually withdraw them. Automatic withdrawal is possible depending on your account type and PayPal's policies, but isn't available to everyone. They can also hold or freeze money. With credit card processing, funds are transferred daily from the cardholder's bank to your regular bank account based on previous settlements, with no middle account involved.
Standards compatibility
Because ordinary PayPal accounts use a unique processing system, they cannot be used for payments via other systems that are expecting a more standard method of exchanging credit card numbers and associated information. In particular, PayPal accounts cannot be used with our channel integration connections that allow you to collect payments directly from guests, such as Avanti Florida Villas, Glamping Hub, Got2Go, Hopper Homes, Houfy, LocalOTA, Vrbo, and Whimstay.