PayPal is still the best solution for online payment systems today. Although creating a PayPal account is also not easy, PayPal is still a major favorite because many users use PayPal around the world. If you don’t have a PayPal account, please register for PayPal and follow the guide here ⇒ How to Create the Latest Paypal Account List.
To have a PayPal account requires a credit card, and making a credit card is not easy for everyone. But, you can still have PayPal in full by using VCC (Virtual Credit Card) or use an alternative online payment system other than PayPal such as Payoneer.
I am also a PayPal user as well as Payoneer to accept and pay online. However, the two online payment systems also have their own discounted fees for each transaction or administrative fee, like most local banks. For Payoneer discount fees, I have discussed it first and you can read it here ⇒ Administration Discount Fee and Payoneer Transaction Limit.
In this article, I will specifically discuss what percentage of PayPal discount fees are and how you can work around minimizing or avoiding these PayPal fee cuts.
What is the Percentage of PayPal Discount Fee?
PayPal makes money by charging transaction fees to users and also benefiting from currency rates when withdrawing or withdrawing balances to local banks (List of the largest banks in Indonesia).
PayPal charges 2.9% of the total amount of each payment. In addition, there is also an additional flat fee of $ 0.30 for each transaction.
Example : When you receive a $ 50 payment you will incur a $ 1.75 USD transaction fee, this is a 2.9% discount on the $ 50 worth of $ 1.45 and added $ 0.30 to give you $ 1.75.
So this means that you will end up receiving only $ 48.25 worth of the transaction.
Paypal deducts the rate fee from the actual bank rate of around 400 rupiah per $ 1. And a discount of Rp. 16,000 if the withdrawal transaction to a local bank is below $ 115.
Example : When you want to withdraw funds from PayPal to a local bank (such as BCA) worth $ 100. The current BCA rate is Rp. 14,915 per $ 1, then PayPal will have a price rate of 14,523 per $ 1. And a discounted transaction fee of Rp. 16,000.
So you should receive Rp. 1,491,500 to Rp. 1,436,300. or deducted by = Rp. 55,200
Note : Keep in mind, that the cost of Rp. 16,000 is only charged if you withdraw under $ 115. So make sure to withdraw more than $ 115 from PayPal to avoid a Rp. 16,000.
In addition, these transaction fees vary by country, but the difference in cut costs is very small. And this fee is charged to the person who received the money, not the person who paid for the goods or services. This is similar to what happens every time you pay by credit card at a real store. Where shops have to pay a fee for “convenience” to be able to accept credit card payments.
How to avoid PayPal discount fees
It is not possible to fully avoid PayPal fees, because these costs are used for PayPal operations and also for the benefits that PayPal can take. Those of us who use their services, of course, have to pay for it.
But there are ways to minimize the discount costs of PayPal.
- Use a personal account instead of a business account, because personal accounts are less likely to be discounted than business account fees. Although in certain things the PayPal business account is more economical and the PayPal business certainly has far more features than a personal PayPal account. If you intend to create a business PayPal account or upgrade from personal PayPal to business PayPal, please read the following guidelines → How to Upgrade and Create a PayPal Business Account.
- Ask the person who will send the funds to you to send it as a friend or family, because with this option you will not be charged the slightest discount from PayPal.
- Always calculate the PayPal discount fee before you request payment from your service, and include the Paypal discount fee on your invoice. For example, suppose your service is $ 50, so when you make an invoice, increase the fee to $ 51.75.
- Try to withdraw PayPal funds to your local bank when the balance is above $ 115 to avoid a transaction discount of Rp. 16,000. And usually the funds will arrive in your bank account within one day (when it’s a working day).
And that’s a way to calculate the percentage of PayPal discount fees and also how to minimize the discount fees from PayPal that you can do. Hopefully this article was useful for you and you started to understand about PayPal’s discount fees and minimizing costs in order to get more profit. Good luck 🙂