< Day Day Up > |
Here are five ways to lower the commissions PayPal charges you when you receive money . Many sellers using PayPal don't sell enough to really care about an extra 0.7% transaction fee. For them, the convenience of PayPal is enough. With no startup fees, no monthly fees, and no long- term commitment, PayPal is a no-brainer. However, when you start doing $5,000 per month in sales, those fees start to add up. Many merchants don't realize there are extra steps they can take to reduce or offset their transaction fees. 3.11.1 Apply for the Merchant RateThe standard rate (known as the discount rate by credit card merchants) for accepting a payment with a PayPal Premier or Business account is 2.9% plus $0.30 per transaction. (This rate applies to transactions between U.S. accounts; fees vary for oversees or international transactions.) You can reduce your rate to 2.5%, 2.2%, or even 1.9% (plus US$0.30 per transaction) by qualifying for the PayPal merchant rate . Table 3-1 illustrates this new tiered fee structure. Table 3-1. Tiered structure for the PayPal merchant rate (in USD)
To qualify for the lower rates, you must have a Premier or Business account in good standing that has been open for at least 90 days and you must have received at least $3,000 in payments in a single calendar month. (Note that these criteria apply to U.S. account holders only; international accounts might need to meet other requirements.) To apply, follow these steps:
The confirmation screen will tell you if your request was accepted, denied , or queued for review. If all goes well, the new, lower rate should go into effect immediately!
3.11.2 Ask for eChecksThere is a maximum fee of US$5.00 for each eCheck payment you receive. To put this in perspective, the standard fee to accept a US$1,000 payment funded by a credit card is $29.30, nearly six times the measly $5 fee for a $1,000 eCheck. If you use eChecks for all your large payments, you will enjoy significant savings. See the beginning of this chapter for more information on eChecks. 3.11.3 Receive Money into Your Personal AccountIf you hold both a Personal and a Premier or Business account, you can ask any customers who prefer to make payments funded by their bank account or PayPal balance to send payments to your Personal PayPal account. Receiving a payment into your Personal account incurs no fee, but you won't be able to accept payments funded by credit cards. Personal accounts are also limited to receiving US$1,000 (or the equivalent in other currencies) per month. This limit is reset each month on the anniversary of the account's opening. To view your Personal account's limit:
3.11.4 Enroll in the PayPal Money MarketThe PayPal Money Market Fund allows you to earn returns on your PayPal balance by turning your PayPal account into an investment from which you can earn dividends . To enroll in the PayPal Money Market, click the Money Market link in the Enhance Account section of your account overview page and follow the directions. At the time of this writing, the current yield is 0.99%. There is no limit on withdrawals and no minimum investment.
3.11.5 Use the PayPal ATM/Debit CardPayPal pays you a 1.5% cash-back bonus for every purchase made with the PayPal ATM/debit card when you use it as a MasterCard. The bonus does not apply to ATM withdrawals or point-of-sale purchases when you use your ATM card PIN. To take advantage of this offer, you need to have a Business or Premier account, add a credit card, and add (and confirm) a bank account [Hack #2] .
3.11.6 Let Your Customers PayNaturally, if your customers pay your seller fees for you [Hack #14] , you won't pay any fees at all. Among other things, a buyer can use PayPal's Mass Pay feature to not only cover the seller's fees, but to do so at only 2% (as opposed to the 2.9% plus $.30 normally charged). |
< Day Day Up > |