PayPal Here fee changes cause confusion
You may well have been greeted with a decision when you logged into PayPal today.
They might have asked you to make a judgement about whether you want to be on the Blended fees schedule or something called Interchange Plus. You’ll have seen these options if you’re a PayPal business account holder who likely has also signed up for PayPal Here.
PayPal Here is the system whereby you have a PayPal handset and take payments in person. So, first thing’s first, don’t worry about this if you’re not using PayPal Here or just accepting online payments for ebay sales. Online payments are not affected. We’ve had several enquiries from readers today and, whilst it isn’t particularly clear from the info that, it’s just PayPal Here relevant.
(One unanswered question: Payments Pro and Virtual Terminal may also be affected. As we say, confusion reigns. It’s best to check your account. And do let us know. We’re not 100% sure.)
But if you are a PayPal Here user there is a decision to be made, so do take some time to digest the information on the PayPal site. But it seems that sticking with Blended (which is both predictable and means you get your cash immediately) is a good default position
If you’re taking a huge level of PayPal Here payments from non-EU payers the situation may be different, so reflect on your business activity. Only you know the ins and outs of your own business..
The bigger concern here for Tamebay is that Paypal has caused confusion and certainly we have corresponded with sellers today worried that this applies to all PayPal payments and we’re also not entirely sure which PayPal services the changes extend to.
One thing we can say for sure: this doesn’t affect normal PayPal payments online for eBay sales. As you were.
We’ll doubtless revisit this.
As far as I can see it applies to everything and its really hard to get a handle on which might be best as there’s such a huge range of interchange rates. Interchange rates for commercial cards are way higher than regular cards, so if you get quite of few of them it could easily push you over the 0.5% differential between the blended and interchange rates.
We’ve had comment from PayPal, these fee changes only impact: PayPal Website Payments Pro, PayPal Here and Virtual Terminal.
I’ve had a good look at this for our company, and I believe interchange is definitely the best option if your customers are all/mostly consumers rather than businesses.
The reason for this is that due to an EU directive consumers transactions be charged more than 0.2% or thereabouts in interchange fees. PayPal conveniently forget to mention this in their information and state that interchange fees can go up to 2%. Check it out for yourself at visa’s website: https://www.visaeurope.com/about-us/interchange/fees-and-interchange
So on interchange plus you’re looking at 2.9% PayPal fee + 0.2% interchange fee + PayPal’s 20p per transaction charge. Compare this to blended which is 3.4% PayPal fee + PayPal’s 20p per transaction charge.
It seems to be a no-brainer if your customers are consumers rather than businesses. PayPal would rather you didn’t know this of course…
And Paypal’s figures for debit card interchange fees look highly dubious (0.2-1.6% consumer debit and 0.2-0.9% commercial debit). Last time I had a normal card processing account my fees for debit cards were 20p and no percentage.
Unfortunately as a result of all these changes, all debit card transactions are going over onto percentage terms instead of fixed price per transaction. It hasn’t affected everybody yet, but as merchant account contracts come up for renewal, every merchant will be moved across to the new system.
This isn’t just a PayPal thing. This is due to the ongoing EU changes about capping fees and making them more “transparent” and it affects all card processors.
Well, I looked through all the reams of terms and conditions, and, in my case, it appears that the actual maximum differential will be 0.05% if I take the lowest interchange fee consumer card. But it could also be more than my current fee if I inadvertently take a business card.
So that’s 50p per £1000 takings for a guarantee of a fixed rate and money instantaneously in my account. I think I’ll stick with blended!