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What Paypal Won’t Tell You
Posted by Scott on 7th May, 2008 | 56 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.
I agree and am looking into changing my CC processor. They don’t seem to know how to answer questions, either, except their canned responses which rarely apply.
Wanda
Everything in paypal is hidden. Even a simple process of canceling a subscription takes me a minimum of 4 clicks to get to the page. Talk about designing the site to be user friendly.
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.
I applied for it 7 days ago. But I didn’t get any response yet.
Would be nice to take $3000/month!
hey thanks for the heads up on paypal! i’d like to model my blog after yours
I guess this isn’t a problem for most paypal users
$3k/mo isn’t actually that much for people who sell things on ebay for a living - $3k/mo is a very small 1 person kind of business.
Thank you for these tips, I will check out my Paypal settings and modify them accordingly.
[…] The PayPal secret opt in for reduced fees found by Scott at W Revenue. […]
Thanks for the tip!!
Gosh, thanks for telling!
This is great advice, never knew this. Thanks for this useful tip.
That was a great news. I ve been paying them. I use to close my account for $5000 and more a month
Definately worth knowing about PayPal. I didn’t have a clue.
Wish I know that before…
Thank you very much for posting this! This will drop my fees and nothing is better than that. It’s also good news that PayPal automatically accepts your application. I’m ‘ready to go’ now!
You’re awesome for finding that hidden page
Excellent, you’re welcome!
Thanks for the great tip - I found your article via StumbleUpon and am glad I did.
Here’s the quick way to find it:
1. Login to your paypal account
2. In the top right corner there is a search bar, type this in: fees-rate-about
3. You’ll come to the page - apply and SAVE MONEY!
Thanks for the great post and money saving tip!
[…] How to save money - Paypal won’t tell you this […]
Never knew this - great advice. Thanks for the useful tip.
Great information, thanks for these tips.I´m not yet at the $3k mark, but once I get there I sure will use this money saving tip.
I am too follower of Tom but I suggested this to some of clients
they are happy with the information 
wow wow wow
Very good to know. I thought that it automatically changed based on your volume. Good to know you have to manually switch it over. Thanks for the info!
I came across your site after stumbling across the “Merchant Rate” info in Virtual Terminal. After being approved, I still couldn’t find any info on what my new rate actually will be. It was 3.1%. If it goes down even .5% it will translate to a $25.00 per month savings to me. Just about covers the virtual terminal fee of $30.00 Though the card processing rate seems quite high to me at 3.1% for merchant services as it is!! PayPal is not impressing me with their (raised) $30.00 per month service charge, then charging 3.1% on transactions. You’d think they would offer a free USB card swipe device for your cash register at these rates!!! This is not much less than a banks rates with a card terminal included!
That is excellent, can I ask how you came across that? That will save a lot of people so much money.
Stumbled upon it by chance when looking at my own account.
Thanks! you made my day, we will save a lot of money & the credit doesn’t goes to PayPal , it goes to you & only you..
Paypal does not work in my part of the planet, Pakistan. I cannot even register an account. Any ideas of any ways around it??
I miss on a LOT of transactions because of this reason because most people ONLY accept paypal for online transactions.
John
[…] What Paypal Won’t Tell You […]
[…] holder and have a good standing with PayPal you can apply for merchant rates. Merchant rates attracts lower fee than normal premier/business accounts rates. To qualify for merchant rates you should have received […]
[…] holder and have a good standing with PayPal you can apply for merchant rates. Merchant rates attracts lower fee than normal premier/business accounts rates. To qualify for merchant rates you should have received […]
Even at the low fees PayPal is still ripping off the merchant. Its sooooo much cheaper to get a regular merchant account. Paypal is great for very low volume merchants, but when you really need payment processing you need to get a merchant account.
Very true, but consumers love how easy paypal is, so unfortunately you’re throwing away money if you don’t accept it. Making it easy and quick to pay will make the difference between closing a sale and not — it all depends on how badly the consumer wants the product.. If they are indifferent, then the thought of getting up to get their wallet, putting in their address and all their info for several minutes, can deter the sale.
[…] How to save money - Paypal won’t tell you this […]
[…] holder and have a good standing with PayPal you can apply for merchant rates. Merchant rates attracts lower fee than normal premier/business accounts rates. To qualify for merchant rates you should have received […]
Another interesting item, if someone pays by E-CHECK, the maximum fee charged will be $5 for a transaction.
E-checks behave like checks - the funds have to clear before they show up as completed on your merchant account - so not the best for goods you ship unless you hold the order till the PENDING status clears. But if you do something like take funds for a service that will be delivered later, bingo.
You have to educate your customers about how to use E-Check - they have to opt in from a similarly difficult to find payment option just before they approve a payment.
Savings in fees on a $1000 payment - about $24.30 out of $29.30, even if your account hasn’t been approved for merchant fee reductions.
I’m so tired of big businesses ripping off the little guy because they don’t have law degrees. This mentality of gouging customers because of ignorance is a big part of why the economy is in such disarray. Seriously… what is ethical about making customers “opt in” … it’s called doing the right thing. It should be automatic. I hate paypal but I have to use it. Sad that one has to find out about these things from other people because Paypal won’t just do the right thing. Good post!
Great info, thanks.