PayPal fees and how to reduce them
Are you sending and receiving money from abroad via PayPal? If yes, you must know the various fees and charges you need to pay for the process. For the purpose of explanation, we take the example of PayPal in the US. For details on PayPal charges in your region, navigate to the fees section of PayPal’s local website.
What are PayPal’s international transaction fees?You have arranged for an international transaction from a PayPal account in the US. You are waiting for the money to reach your bank. But, do you know that you are not going to receive the exact amount that will be sent to you? There will be a conversion rate and fee charged in the process and you will get the amount after all deductions. This is why you need to have a good understanding of the fee structure and the conversion rates of PayPal.
Understanding the transfer fees:The fees you will be charged depends mainly on two factors -
- The country you are sending the money to.
- Your means of funding the transfer.
How to decrease PayPal fees on international payments?After using PayPal for a couple of years and having lost a large chunk of our revenue as PayPal fees, we have come up with some ways which will help you decrease your fee when accepting international payments. These methods work well for anyone and they have been tried and tested by us for more than a year.
1. Avoid regular paymentsIf you are a business owner or a freelancer having clients abroad, it is likely that you are using PayPal for receiving payments for your goods and services. The frustrating part of this process is that PayPal charges fixed rates for each payment. Whether you are getting $100 in payment or $1000, PayPal has a fixed charge that they deduct from your payment. To avoid this, you can opt for getting payments less often. So, if you are receiving payment every week or every fortnight, you can ask your clients to pay you at the end of the month or at the end of two months if possible. This way you will save hundreds of dollars by the end of the year.
2. Opt for payments as “Friends and family”While this method can save you some bucks, it is not recommended if you are a business owner who receives regular payments from overseas. When you receive payments as a “Friend or family” the fee charged is lesser compared to the fees you pay when accepting payments as a business. However, this is against PayPal’s policy and there might be chances of you getting your account getting banned by PayPal. So, use this method at your own risk or avoid it completely if you wish.
See also: Calculate PayPal Fees Online
3. Consider other payment optionsPayPal is one of the most popular payment platforms. But, it is not the only one out there. There are various PayPal alternatives you could use to send and receive payments. Compare the exchange rates of other services with PayPal and see it the fee charges are fair or not. You can use this PayPal international transfer fees calculator to calculate the currency conversion rates charged by PayPal for international transactions. After analyzing, comparing and reviewing the other options, you can choose to stay with PayPal or switch to a better option if you find one.