What Is PayPal Instant Transfer & How Does It Work?
PayPal has an instant transfer feature that helps you get paid faster. But how does it work and what’s the catch? Find out in this article!
If you’re a frequent or new PayPal user, you’ve probably had to wait a couple of days for your funds to transfer into your bank account. That waiting time can be excruciating - particularly for those in the digital economy with variable cash flow. But what if we told you there is a way to access your money faster?
PayPal announced their Instant Transfer feature in 2019 as an expansion of their current payout features. Now you can transfer money between your PayPal wallet and your bank account or your debit card within just 30 minutes.
It sounds ideal. But it comes at a cost.
Here’s What We’ll Cover:
How Does PayPal Instant Transfer Work?
A standard transfer from your PayPal account can take 1-3 days to reach your bank accounts. That goes for both individual account users and merchant account users. Very annoying!
PayPal’s “instant” transfer feature allows you access to funds in a flash. This is as close as you can get to real-time payments for online transactions.
Since launching in 2019, the payment giant rolled out the instant transfer feature for bank accounts worldwide - not just US accounts. Account holders in most developed countries can now have instant cash.
To get this seemingly magical faster access to funds, you only need to do two steps:
- Link an Eligible Bank Account or Eligible Debit Card
When you set up a PayPal account for businesses, you will be prompted to link a bank account and/or a debit card to receive transfers. This is also the way that your payment limits lift. So you’ll want to do this quickly so you can use your account to its full potential.
- Click “Transfer Money”
Once you are on the money transfer page, you can select which method you would like to use to withdraw your funds:
- Standard transfer - 1-3 days
- Instant transfer to bank account - up to 30 mins
- Instant transfer to debit card - up to 30 mins
You can then run off into the sunset with your hard-earned cash at a fraction of the waiting time.
So what’s the catch?
The Catch: Instant Transfer Fees
Oh yes - you don’t get away that easily! For the privilege of this faster access to your cash, PayPal charges a 1% fee of the money transferred.
We do love PayPal, which is why we have them as an accredited payment processor on our platform. But we can’t deny that they are sticklers for a sneaky fee here and there.
Luckily, PayPal does cap this charge at $10 maximum, so long as your transaction is under the limit.
Speaking of which...
The Limit: PayPal Instant Transfer Limits
An instant transfer to your debit card has a limit of $5,000 per transaction, $5,000 per day, $5,000 per week and a total of $15,000 per month.
An instant transfer to your bank account has a limit of $25,000 per transaction.
Instant Cash: How to Make the Most Of Instant Transfers on PayPal
Instant access to funds is great, but the fees - not so much. Here is how to use the instant transfer feature to your best advantage.
1. Avoid Transfers to Your Debit Card
Even though the fees are the same, the smaller transfer limit means you will be making more frequent transfers than with your bank account. This leads us onto…
2. Transfer as Little as Possible
By little, we mean frequency! The trick to reducing the fees you pay to PayPal is to reduce the number of transfers you request. 1% seems small but it adds up quickly! If you can delay the number of times you use the feature, you’ll keep more of your cash.
3. Transfer as Much as Possible
By “much”, we mean amount. Transfer as much as possible in one go to capitalize on that $10 cap.
PayPal has made it easier to get instant access to your earnings with their “Instant Transfer” feature. If you use it wisely, you can get quick access to your funds without drowning in transaction fees.
Check out our blog for more tips for your small business.