6.3 PayPal Provides a Solution for Chocolate Lovers When Dan Prichett opened his small business, PayPal solution provides Dan and his staff with he had some reservations regarding the long- a convenient and hassle-free reporting system term viability of his venture. Like many entre- for customer transactions. PayPal consolidates preneurs, Dan was very passionate about the information about purchase orders, shipments, products that his business sold. In fact, the and customer information in an easy-to-access products that he sold were very personal. Dan online reporting tool. Second, PayPal, with its had recently lost more than 100 pounds through Merchant and Customer Protection policies, exercise and a low carbohydrate diet. While he secures and protects sensitive customer trans- was dieting, he discovered a low-carbohydrate actions (for example, transactions involving chocolate product that helped him satisfy his credit card or debit numbers). PayPal imple- cravings while still maintaining his weight loss ments its security policies through the use of program. As a result, he started LowCarb- encryption. Finally, PayPal improved LowCarb- Chocolates (www.lowcarbchocolates.com). Chocolates.com's customer service by making Traditional brick-and-mortar businesses the company more responsive to client inquires. always face important issues such as location, The most pronounced result of the partner- staff, and hours of operation. In these busi- ship between LowCarbChocolates.com and nesses, customers pay by presenting cash, PayPal has been the company's rapid growth. In check, or credit or debit cards while they are mid-2009, LowCarbChocolates.com averaged physically present during the transaction. For more than 800 transactions per month and a sig online retailers, this process is not possible nificant percentage of the payments for those because there is no physical place of business. orders were processed via PayPal. Because Dan is an online retailer, he had to implement a low-risk, secure, affordable method Sources: Compiled from Low Carb- Chocolates.com," PayPal Customer Case Study, to accept payments for online customer orders. These payments are called "card not present" www.paypal.com, accessed March 30, 2000; www.lowcarbchocolates.com, accessed April 4, payments. After researching several options, Dan turned 2000 to PayPal (www.paypal.com) to facilitate his pay- ment collection and order fulfillment processes. QUESTIONS PayPal performs payment processing for online 1. Dan researched several options for customer eBay sellers as well as for other commercial payments. Access the Web to find other users, like Low CarbChocolates.com, for which payment options that Dan could have used. PayPal charges a fee. 2. What are the advantages that Dan gained For LowCarbChocolates.com, the use of from using PayPal? Were there any disadvan