Paypal for Business Fees are the fees you get charged when you transact business using your Paypal business account. Now different scenarios would warrant how PayPal charges you and how much they charge you. This may your country of the transaction, and the type of transaction you are doing. Below we will be listing the different transactions as well as the type of fees they attract, and how you can reduce these fees to enable you to make the most of your business.
Paypal for Business Account
Paypal business account and Paypal personal account offer quite different services and comes with different fees and charges. Even though Paypal works fairly the same way across different markets, you may need to check the details and the small print for your particular country.
Before you can talk anything business on Paypal, you must have created a Paypal business account. If you don’t have one, here are the simple steps you can use to create one.
How to Set Up and Create a PayPal Business Account
Setting up your PayPal business account can be done in minutes, and you can actually choose the type of business account that suits your needs. Now different levels of the account come with different features and charges.
This is how to create your Paypal business account:
- Tap on the ‘Sign Up’ link and choose the option to create a business account.
- Select the business account package which suits your needs
- Fill out your email address, which you want your Paypal business account to be linked to.
- You will be prompted to choose a login and password, and key in the basic details of your business including the registered address.
- Fill out some information about the kind of business you operate, and the actual or anticipated turnover.
- Then add your Employer Identification Number (EIN), also called Federal Employer Identification Number (FEIN) or the Federal Tax Identification Number
- Paypal will ask you to key in your social security number and date of birth, in order to enable PayPal to confirm your Identity.
After you have successfully entered all your details, your account can be approved and will be ready for you to run.
Benefits of PayPal Business Account
With a PayPal business account:
- You can activate a PayPal business debit card to withdraw cash from ATMs, make payments and earn points.
- You don’t have to pay any annual fees for using your PayPal debit card and you can earn rewards, even though there are still few fees involved.
- Paypal business accounts are registered for businesses and offer additional features like giving your employees limited access to your account.
Paypal for Business Fees
Here are different fees charged by Paypal, and note PayPal is not all about money, which means there are actually some transactions that can be done free of charge.
PayPal Account Opening Fee
If you are opening an account for the first time with Paypal, you are not charged, it is free.
Paypal Fee For Sending Money
Personal payments (feature not available for all countries)
Those who are sending money within the U.S., to family and friends, using their PayPal balance or bank account, or a combination of their PayPal balance and bank, are not charged a fee.
On the other hand, there is a fee if you are sending money as a personal payment using a debit card or credit card.
Fee For Receiving Money
Personal payments (feature not available for all countries)
When you receive money from friends or family in the U.S., and the money is sent from the PayPal website using only the sender’s PayPal balance or their bank account, or a combination of their PayPal balance and bank account, PayPal does not charge a fee for it.
Paypal Fees for Goods and Services – Purchase Payments
If you happen to use PayPal in buying goods or services, there are no fees attached. But if on the other hand, you receive money for goods or services (like from selling an item on eBay), then, there will be a fee for each transaction.
Paypal Fees for International Payments
There’s a fee attached when you send a payment to someone in another country, or if you receive a payment from someone in another country. You can get more information from Paypal User Agreement. To locate the User Agreement, click Legal Agreements at the bottom of any PayPal page.
Fees for Withdrawing Money
You can withdraw money from your PayPal account to your bank account for free. But, if you opt to receive a check, there is a fee for a check to be issued.
Reversed Payment Fee
If you are refunding a payment to a customer, you will only get a portion of your paid fee to PayPal, Paypal on the other hand, will retain the fixed fee
How to Reduce Paypal for Business Fees as a Seller
There are ways you can reduce the fees PayPal charges on your transactions as a seller. I will be taking you through each of them.
Apply for Merchant Fees
If your business constantly generates at least $3000 in sales every month, then you can apply for Merchant Rates. Understand that this will lower your transaction rate to 1.9%, which is a very convenient transaction fee as far as Paypal is concerned.
Other requirements needed before you can apply for Merchant Rates:
- You must consistently get at least $3,000 in Paypal payments every month.
- Your Paypal account must be in good standing, that means you do not have a negative balance
Now, understand that these fees can be revoked if you do not meet the $3000 monthly requirements.
Sell in the Local Currency
Now, the fee for exchanging currency is at 2.5% of the sum of the transaction amount, thus if you happen to accept payments in only the same currency that you sell in, you can avoid the currency exchange fee altogether.
To sell in a local currency, go to your account and designating a primary currency. This will now stand as the default currency that you will request and send money through.
- Go to your PayPal profile
- Navigate to “My Money”
- Navigate further down to Currencies
- Then click on the three dots close to the currency itself
- Tap on “Make Primary”, to designate it as your top choice.
- In case you do not find your currency you want on the list you see, choose Add a currency, and choose the currency you want to add. Then, use the previously explained process to make it your Primary currency.
Use Micropayments (under $10)
If you carry out the bulk of your transactions under $10 a piece, you will benefit more in the future if you switch to micropayments. This is how it compares:
- Standard merchant fee – 2.9% + $0.30
- Micropayment fee – 5% of the transaction.
You will discover that it is more beneficial, to avoid the flat fee, and go for the percentage-based fee. Understand that you can have micropayment fees applied to your account if you fill out the micropayment application, which you can access by contacting Paypal Support.
You can now use PayPal for business for your business transactions with ease. You can as well as make profits that will help your business grow. Paypal cares about your business, that is why it has provided these other options which you can use to have the fees you pay reduced, for your business’s overall benefits.