Many online entrepreneurs miss a simple step that will lower their PayPal merchant fees. You can lower your fees to as low 1.9% instead of the 2.9% fee plus 30 cents per transaction PayPal charges. Although it may not seem like much at first, it adds up over time.
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You can apply for the merchant rate through PayPal by logging into your account and clicking on Profile and Settings, My Money, and then click on Merchant Fees to complete the application.
You must be doing at least $3,000 in business each month. If your monthly sales fall below this amount, your merchant status may be removed.
Alternatives to PayPal
As you can see, PayPal definitely nickel-and-dimes you. The fees you pay can quickly add up, especially if you make more transactions.
There are many alternatives to PayPal, which charge lower fees. You might also be interested in these online payment options for other reasons.
Some potential customers may not be able to use PayPal, for example. PayPal can sometimes block accounts. If this happens, you might not want your entire money in one spot.
Stripe charges the same fees that PayPal but doesn’t charge extra for international transactions (remember, PayPal charges quite a bit more for these). This is a great alternative if you have many customers outside of the United States.
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If you have many international customers, Transferwise is a great option. Their fees are very low and they offer better currency exchange rates that other payment services like PayPal.
Google Wallet is a great option because your customers don’t have to use the Wallet app in order to make payments. Payments are sent automatically to your bank account. Wallet charges no fees.
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Apple Pay, another popular payment method, integrates well with many shopping carts and payment processing services such as Stripe.
The bottom line
PayPal is the industry standard for online payments. Although PayPal merchant fees may reduce your profits, it is so popular that consumers use it all the time. This option allows you to maximize sales potential.
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There are many ways to lower your fees. As we have shown, it is possible to offer other payment options. It’s always a good idea to offer your customers multiple payment options.