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What Paypal Won’t Tell You
Posted by Scott on 7th May, 2008 | 18 commentsThere is a very well-hidden setting in Paypal that can save you a lot of money in Paypal fees depending upon the volume of Paypal payments that you receive. This is particularly important for merchants selling goods, or big sites that accept subscriptions, but it’s important for ebay sellers and anyone selling more than $3k/mo via Paypal. It’s called Merchant Rate pricing, and it’s something you have to opt-in to, on this page at Paypal (must be logged into Paypal, then visit that link - yes it’s a real Paypal link and no I’m not a phisher).
When I decided to write this post, it took me half an hour to find that page so don’t bother to look for it, they’ve hidden it well. No doubt, their requirement to opt-in to qualify for the discounted tiered pricing is probably buried in some legal agreement, too.
If you earn more than $3,000/mo in Paypal payments, the Merchant Rate switches your transaction fees from 2.9% to 2.5%, and again to 2.2% (>$10k/mo) and 1.9% ($100k/mo) saving you potentially hundreds or even thousands per month. I just assumed that Paypal’s tiered fees adjusted automatically to take my order volume into account but not so, you have to manually choose the lower tier if your sales volume qualifies.
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Wednesday, May 7th, 2008 at 6:43 pm and is filed under Web Business. If you like this post why not subscribe to my full text RSS feed. You can leave a response, or trackback from your own site.
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Dude, you rock. We process tens of thousands of dollars each month in subscription fees via PayPal and never knew this. Thanks!
Awesome, you’re welcome - glad to help out. I think it’s slimy for them to publish the tiered rate charts and not make it clear that the lower priced tiers are opt-in (like who wouldn’t opt in anyway?)
the only reason i wouldn’t opt in is if there was a stiff penalty coming down a level and I was hovering around $3,000 a month (which there shouldn’t be, but with sleazy companies who knows).
Is this something that goes away if you don’t maintain the $3k/month of incoming payments or is it a lifetime once it’s applied?
I think it goes away but I don’t know what the timeline is like i.e. how long it lasts from the time sales drop below $3k.
thank you so much for that tip! Damn paypal are so sneaky….you’d think they would offer it to anyone that meets the criteria….more people need to know about this
That’s a very nice tip Scott. I don’t earn enough each month through PayPal but I’m sure a lot of people will save a lot of money.
Best Wishes
Carl
Thanks for the tip. Playing devils advocate for a minute why would PayPal want to advertise the fact and lose revenue.
[…] to Scott Wainer for his excellent post on PayPal’s secret merchant rate for this […]
Its methods like this why i dont like paypal. They are big, they are sneaky, they are ugly.
Paypal sure makes you run round hoops to change, cancel or edit anything. And this in a day when every designer takes about user experience.
Good tip. Ill put this to use once i make more money
Useful Paypal info, thanks! I hope i can get such $ale numbers one day
[…] use paypal, and a few may be making quite a bit of dough, this is something they may like to know. What Paypal Won’t Tell You | W Revenue dot Com Basically it says how you can get lower fees due to the tier system, but instead of upgrading […]
this is very useful info indeed i would have never known :O
If only I was making a lot from paypal I could put this to good use
Great tip. But when I went to Paypal to opt-in I found that I was already receiving the Merchant Rate without any sign-up on my part. So, apparently Paypal has some sort of automatic process here.
That’s good to hear, but it wasn’t the case for me or for others who I’ve heard from, so it’s good to double check.