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Thread: Paypal transfer/payment charges?
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02-23-2011, 12:39 PM #1WHT Addict
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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.
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02-23-2011, 02:27 PM #2WHT Addict
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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 €..
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02-23-2011, 02:39 PM #3Newbie
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Don't choose personal account if you are going to recaive funds - income is limited and fees are much bigger.
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02-23-2011, 02:50 PM #4Disabled
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Nothing is free when it comes to banking / money transfers. If you deal with a credit card processor, they will charge you fees.
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02-23-2011, 03:05 PM #5WHT Addict
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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.
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02-23-2011, 03:08 PM #6Web Hosting Master
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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.
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02-23-2011, 03:08 PM #7Disabled
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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
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02-23-2011, 03:12 PM #8Disabled
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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.
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02-23-2011, 03:17 PM #9WHT Addict
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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?
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02-23-2011, 03:19 PM #10Disabled
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I have a Paypal verified business account. A transfer of $100 costs me about $5 but I do not get monthly fees.
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02-26-2011, 04:48 PM #11WHT Addict
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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
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02-26-2011, 05:01 PM #12Web Hosting Master
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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 PayPalLast edited by m8internet; 02-26-2011 at 05:08 PM.
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02-26-2011, 05:40 PM #13WHT Addict
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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?
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.
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02-27-2011, 05:46 AM #14Web Hosting Master
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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)
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, etcM8 INTERNET : Simple and cost effective website hosting from the UK
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02-27-2011, 10:32 AM #15WHT Addict
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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?
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02-27-2011, 10:43 AM #16Web Hosting Master
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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)M8 INTERNET : Simple and cost effective website hosting from the UK
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02-27-2011, 10:45 AM #17WHT Addict
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Thanks for that, you've been a real help!
Will this account allow me to use paypal with ebay?
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02-27-2011, 10:55 AM #18WHT Addict
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02-27-2011, 11:02 AM #19WHT Addict
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Awesome, thanks guys!
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