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  1. #1
    Join Date
    Feb 2011
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    England
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    102

    Paypal transfer/payment charges?

    Hi,

    Not sure if this is the right section, feel free to move the thread if needed. I'm looking to set up a business that will involve customers making payment to my PayPal account. In the past I have seen that there is a charge on payments made to PayPal accounts; is there a way to avoid this? Also, what type of PayPal account would I need? I'm not 100% PayPal-bound, I'd be more than happy to use any other service that provides me with the same facilities so long as its free or costs very little.

    Thanks,
    Dean.

  2. #2
    Join Date
    Mar 2008
    Location
    England, UK
    Posts
    114
    Question #1: No, otherwise everyone would do it - why would there be a way around it?
    Question #2: Business Account more than likely..

    What currency are you operating in and the business location? , $ or €..

  3. #3
    Don't choose personal account if you are going to recaive funds - income is limited and fees are much bigger.

  4. #4
    Nothing is free when it comes to banking / money transfers. If you deal with a credit card processor, they will charge you fees.

  5. #5
    Join Date
    Feb 2011
    Location
    England
    Posts
    102
    Based in the UK, dealing with mainly GBP and USD, maybe even EUR. Don't expecting to take over 1,000 per year, but I don't want to end up losing 10% of my income in paypal charges. I'd have to deal with charges when the customer sends me money, and when I split it between me and my business partner.

  6. #6
    Join Date
    Jan 2011
    Location
    Varna, Bulgaria
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    1,270
    Paypal should not charge commission when sending money that are available in your paypal balance. So when you pay your busyness partner, there should be no problem.

  7. #7
    Paypal is a hell of a lot cheaper than dealing with a traditional credit card processor who charges a transaction fee, monthly fee, percentage of transaction fee and other nonsense

  8. #8
    Join Date
    Jan 2011
    Location
    India
    Posts
    1,446
    Business account will be best option because charges are here. You can also try liberty reserve, its charges are comparatively very less than other processor like paypal, alertpay, moneybookers etc.

  9. #9
    Join Date
    Feb 2011
    Location
    England
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    So if I were to go with a PayPal business account linked to my bank account for verification what would my situation be:

    • no monthly charge for the account.
    • no charge to transfer money between partners.


    Anything else?

  10. #10
    I have a Paypal verified business account. A transfer of $100 costs me about $5 but I do not get monthly fees.

  11. #11
    Join Date
    Feb 2011
    Location
    England
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    102
    Thanks, I'll just have to look further into their comission rates and assess how much they'd be taking of my profits per sale

  12. #12
    Join Date
    Feb 2003
    Location
    Cumbernauld, Scotland, UK
    Posts
    734
    PayPal is a necessary evil when running any online business
    Yes, the fees can appear higher, but there is no charge to withdraw more than 50 to a bank account
    Last year (April 2009 to April 2010) the PayPal fees came to about 5% of turnover
    When you compare that to the merchant services transaction fees it is quite a saving on low sales volumes, but eventually it will be higher than using the merchant services from your business bank

    You may then have a transaction levied from your busines bank account, to accept and receive that transaction

    As PayPal don't pay me any interest I tend to withdraw the balance on a regular basis, typically once a week, which helps the business cash flow

    Recently I have changed the way I pay bills to the service providers (servers and Domain Names)
    These now also accept PayPal (Previously Direct Debit or Credit Card)
    This has now reduced my business bank charges further, down from about 5 per month to about 2 per month

    Some customers still send payment by cheque or cash, but given the higher business bank transaction fees it is still cheaper than accepting their payments via PayPal
    Last edited by m8internet; 02-26-2011 at 05:08 PM.
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  13. #13
    Join Date
    Feb 2011
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    England
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    Quote Originally Posted by m8internet View Post
    PayPal is a necessary evil when running any online business
    Yes, the fees can appear higher, but there is no charge to withdraw more than 50 to a bank account
    Last year (April 2009 to April 2010) the PayPal fees came to about 5% of turnover
    When you compare that to the merchant services transaction fees it is quite a saving on low sales volumes, but eventually it will be higher than using the merchant services from your business bank
    Right, so what you're saying here is that I should try to withdraw funds to my account each time I earn 50 or more? And that doing this would allow me to avoid a transaction charge on such withdrawls?

    Quote Originally Posted by m8internet View Post
    Recently I have changed the way I pay bills to the service providers (servers and Domain Names)
    These now also accept PayPal (Previously Direct Debit or Credit Card)
    This has now reduced my business bank charges further, down from about 5 per month to about 2 per month

    Some customers still send payment by cheque or cash, but given the higher business bank transaction fees it is still cheaper than accepting their payments via PayPal
    When you say that you have changed the way in which you pay your bills, could you provide me with more details about this? I won't have any bills to pay myself, its just out of interest.

    Dean.

  14. #14
    Join Date
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    Location
    Cumbernauld, Scotland, UK
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    Quote Originally Posted by DeanHarper View Post
    Right, so what you're saying here is that I should try to withdraw funds to my account each time I earn 50 or more? And that doing this would allow me to avoid a transaction charge on such withdrawls?
    That is correct, to avoid the additional PayPal withdrawal fee, simply withdraw funds once the balance is above 50
    I tend to withdraw thebalance once a week, rather than every day
    Therefore the only fee that applies is the PayPal transaction fee (20p + 3.4%)
    On a 10 retail transaction this is a cost of about 4%, or 40p
    This is very similar to a typical business bank transaction fee (see below)

    Quote Originally Posted by DeanHarper View Post
    When you say that you have changed the way in which you pay your bills, could you provide me with more details about this? I won't have any bills to pay myself, its just out of interest
    Many service providers prefer payment by Credit Card or Direct Debit, and did not accept payment by PayPal
    Only recently they introduced PayPal or I have searched for alternatives (with the same costs) that do

    This then avoids the additional business bank charges that would apply, as the funds are transferred direct from the PayPal balance
    An example are the printer cartridges I buy typically once every eight weeks
    I used to buy these on Credit Card, but these are now bought on PayPal (at the same unit cost price)

    Transferring funds to my Credit Card costs 45p from the business bank account

    My business also pays me personally some money at regular intervals, and again that costs the business 45p

    Surely there will be bills to pay, as the business consumes some products or services; hosting, Domain Names, computers, electric, etc
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  15. #15
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    Feb 2011
    Location
    England
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    I'm just selling design services Its all virtual really. There will be SOME bills for things like printing if requested.

    What type of paypal account do I need to get? I've just had a look and it is all so confusing. Do I need mass payment or one of the other accounts - does it make a difference?

  16. #16
    Join Date
    Feb 2003
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    Cumbernauld, Scotland, UK
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    734
    PayPal business account
    This will allow you to receive monies (a personal account is limited to five such transactions)

    You then need to verify your address, this can be done by adding a Credit Card

    To withdraw funds you then need to add a Bank Account

    If your turnover exceeds 2500 in any 12 month period, PayPal restrict your account and request proof of identity to be received within 30 days, during this time you can still receive monies but cannot withdraw it
    If you fail to provide this your account becomes suspended (and this includes the balance)
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  17. #17
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    Feb 2011
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    England
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    Thanks for that, you've been a real help!

    Will this account allow me to use paypal with ebay?

  18. #18
    Join Date
    Mar 2008
    Location
    England, UK
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    Quote Originally Posted by DeanHarper View Post
    Will this account allow me to use paypal with ebay?
    Yes it will.

  19. #19
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    England
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    Awesome, thanks guys!

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