What Are PayPal Fees & How Much Do They Charge
While PayPal is great because it’s free to open an account, there are some fees that are worth knowing about.
PayPal can be a great automatic payment method. You can send money to friends and make online purchases. And you can make debit card payments and international money transfers if you need to.
There is no fee associated with opening a PayPal account or using some of the features. But there are some fees charged depending on certain circumstances. If you’re not aware that some of these fees will get charged you might get caught off guard.
If you’re an experienced seller you might be aware of some of the fees already. Or if you’re a new seller you might just be figuring out some of the fees that get charged. Either way, knowing which fees PayPal charges and when to expect them can help reduce your expenses. There are also a few things that you can do to help avoid paying some PayPal fees.
Here’s What We’ll Cover:
What Are The Fees That PayPal Charges?
The fees that PayPal charges can vary depending on each unique situation. And the percentages of those fees can differ depending on where you’re located or where you’re sending or receiving money. And, whether or not you use a perusal or business account also makes a difference.
These are the usual situations where PayPal charges fees:
- If you receive a payment from a recent purchase
- If you send or receive money from countries that you’re not actually in
- If you use a debit or credit card to send a payment
- If you transfer funds from your PayPal account to a credit or debit card
It’s free for you to receive money sent from any family members or friends if they use their own bank account. And there are also no fees if they send the money using the PayPal Cash account. But it might cost you a fee to send money to a friend depending on your payment method.
3 Ways to Avoid Paying PayPal Fees
Some fees are unavoidable, but the good news is that there are some things that you can do to reduce the overall amount.
1. Try and Get Paid Less Frequently
It’s always nice getting paid for the work that you do and you always want to try and receive payment as efficiently as possible. But the more frequently you get personal payments through a payment service like PayPal, the percentage fee you're charged can add up. There are tons of benefits to being paid on a weekly or bi-weekly basis. But stretching it out with an array of payment options can help.
PayPal charges you a certain percentage of the money that you get and there’s also a transaction fee. And that can add up fast if you do a lot of transactions. If you can handle getting paid once per month it will reduce the total amount of payment fees you have to pay.
It might seem like a lot. But depending on how much you sell and the type of transaction, it can all add up on a monthly or yearly basis.
2. Withdraw Your Money to Your Bank Account
Sometimes you can’t always control when you’re paid for something. But if you’re receiving a lot of funds through PayPal, you can control where you withdraw your money to. Similar to getting paid less frequently, withdrawing your money as often as you can is always beneficial.
However, using PayPal for purchases and other things can cause you to be charged fees. If you want to avoid paying any fees, use a bank transfer from your PayPal account directly to your personal accounts. From there, you can use your money however you wish and avoid any transfer fees.
Most bank transactions are standard transfers and usually only take a few days, but they can sometimes happen faster.
3. Factor PayPal Fees Into Your Payments or Accept Other Forms of Payment
This might not necessarily completely remove the fees, but it can reduce the amount that you pay. Depending on what you’re selling, you can factor in the amount of the fee you will get charged. You can figure out a new price that covers the cost of the fees you might get charged with.
You could also choose to accept alternative payment types if you need a different option. Accepting direct deposits can be a great option to avoid paying any fees. You just need to provide your banking information and you can accept personal transactions.
Alternate payment types can help with business-related payments and even manual transactions.
Running a business means handling a bunch of different types of expenses. And using PayPal can help with making and receiving payments in an easy way. However, not knowing about certain fees that are charged can cost you in the long run.
There are a few things that you can take into consideration. For example, if you're going to be making or receiving any domestic donations or making any international transfers. You could also look into any business taxes and additional risk factors.
Take a look at how often you usually receive payments or how frequently you withdraw money from your account. If you can reduce the number of times you're paid or how often you take your money out, the fees you pay will drop considerably. Sometimes there’s not much you can do about it, but following the steps above will help you avoid any unnecessary fees.
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