PayPal Here fees hiked with Micropayments
The Paypal Here card reader and payment plan is advertised as “No monthly fees, no hidden costs”. Costs are 2.75% Transaction fee for payments using Chip and PIN cards and 3.40% + 20p for card payments made by swiping the magnetic stripe or manually keying in the card details.
However one Tamebay reader has an unpleasant surprise when he discovered that he was being charged 5% + 5p per transaction for payment accepted with the PayPal Here card reader.
What are PayPal Micropayments
Our reader had signed up for Micropayments on his PayPal account which are designed for PayPal users who accept a large volume of low value payments. Rather than 3.4% plus 20p, it can work out more cost effective to pay a higher percentage but a fixed 5p per transaction charge than the normal 20p charge with a lower percentage fee.
Where are the warnings that PayPal Here fees will be higher with Micropayments?
What I can’t find on the PayPal Here website or the Micropayments pages is the information that if you’ve applied and been accepted Micropayments that these rates will also apply to PayPal Here. However what appears to be happening is that the Micropayment fee structure of 5% plus 5p over rules every other PayPal fee plan including PayPal Here.
When you apply for a PayPal Here account you log in with the same email address and password as you use for your normal PayPal account (although on mobiles it’s run as a separate app). That means that when you apply for PayPal Here, PayPal should know if you’re applying with standard rates on your account or if your account has been set up for Micropayments. However they didn’t warn our reader that Micropayments would result in higher PayPal Here rates than those advertised as “No monthly fees, no hidden costs” and let him apply for and receive his PayPal Here card reader and set up the PayPal here app.
How to avoid higher than advertised fees
So, all we can tell you at the moment is that if you’ve got a PayPal account accepting Micropayments don’t apply to use PayPal Here on that account. PayPal’s advice appears to be set up a second account without Micropayments and apply for PayPal Here on your account using standard PayPal transaction fees.
It has become so common for companies to name their service offerings with a specific term that they do not factually represent. The PayPal (so-called) MicroPayments actual fees exceed what the actual concepts of micro-payments represent. Just like my former employer Microsoft named a product HoloLens though I do not believe it relates to actual holographic technologies. So many other companies are doing this it is maddening.
Simple solution really – as PP allows you to have 2 accounts attached to a bank account – the user can simply open a second account on standard rates and link that one the Here device.