PayPal Here to adjust mobile transaction fees
PayPal are to change the fees that they charge for transactions made using their PayPal Here card reader. Don’t worry though, fees aren’t going up for low volume users, but you may qualify for a discount if you have higher revenues.
PayPal Here will soon support Contactless Transactions on contactless-enabled PayPal Here Card Readers.
Effective from a date yet to be announced (but no earlier than the 3rd of October 2015) the new rates will be based on a sliding scale of fees relating to the payment volume from the previous calendar month. This reflects the PayPal Merchant Rate which offers volume discounts for web transactions.
The new rates
The standard PayPal Here fees are 2.75% of payments using Chip and PIN or Contactless and 3.40% + 20p for card payments made by swiping the magnetic stripe or manually keying in the card details. There will be no discounts for transactions made by swiping the magnetic stripe or manually keyed transactions.
Discounts are to be based on aggregate payments received in the previous calendar month via the PayPal Here App and as Commercial Transaction payments. For merchants with an aggregate volume up to £6000 the fee for PayPal Here transactions will remain at 2.75%, for volumes up to £15,000 the rate will be 2.4% plus 20p and volumes above £15,000 will see your PayPal Here transactions charged at 1.9% plus 20p.
Watch the 20p charges on discounted rates
It’s worth noting those 20p charges for merchants with volumes over £15,000. The additional 20p means the difference between a 55p charge for a £20 transaction at ‘2.75% rate’ and a 68p charge for those on the ‘2.4% plus 20p rate’. Even though the percentage fee drops the 20p charge increases the fee for low value transactions. Let’s not forget that most Contactless transactions will be beneath £20 currently so could all cost merchants on a “discounted” rate more than if they were on the standard rate.
Overall the discounted rates will benefit sellers who handle higher value mobile PayPal Here payments. They may disadvantage sellers who process lower value mobile payments.
Full details of the PayPal Here rates are on the PayPal website.
It will be interesting to see how they develop Paypal Here in the future to compete in both looks and ease of use as normal PDQ terminals.
One question, when the article says you can manually enter card numbers, does this mean you can do CNP transactions on this product ?
I believe it’s long been possible to do CNP (Card Not Present) transactions in the business back end of PayPal. However it’s not desirable as not only are the rates higher but Chip and Pin give chargeback protection and CNP or Swipes don’t.
(You don’t even need the PayPal Here reader to do CNP – just download the app and manually type in the details)
Thank you for the quick reply Chris. I didn’t know you could do that, I thought you needed the Paypal Pro subscription.
I will have to look closer in to it. You are right CNP is not great for protection, but some customers just prefer to phone with their card details rather than enter them on-line and we then decide whether to take the risk or not.