Are you getting the PayPal Merchant Rate?

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As a bit of a public service, we periodically make this post.

Are you getting the PayPal Merchant rate? If you take more than £1500 in PayPal payments a month, check out that you aren’t eligible for lower PayPal transaction fees.

Information on PayPal about the Merchant Rate

Last time we made this reminder, we heard from several sellers who were not aware that they were eligible for lower PayPal fees and were glad of the savings they could start making immediately.

Equally, several of them were a bit miffed that PayPal hadn’t proactively applied the preferential rates before. One seller calculated he had spent maybe £9000 in excess PayPal fees over the years. Yes, he was kicking himself.

Why doesn’t PayPal apply this automatically or communicate it more fully to merchants? We don’t know but if you want it, you have to apply for it: all the info is on the page above.

5 Responses

  1. I applied for the merchant rate, but then my turnover dropped below the £1500 one month, so they took it back off me,

    I don’t know how long I was running without the rate, but I had to re apply to get it again, so lost out on months of fee reductions,

    It is probably still the same just be careful if your turnover drops around Christmas that they don’t take it off you,

    As no emails are sent to let you know you have lost the discount, it is up to you to check,

    Easiest way to check is work it out on the transaction details page in paypal as they show the individual paypal fees paid on each item sold.

  2. Last week I came across Paypal Micropayments

    I hear from forums that you can sign up to a higher rate 5% on all transactions but with a smaller 5p charge on each transaction (as opposed to 3.4% + 20p)

    So if your average sale is less than £8-£8.50 it would be more benificial to change over to a “micropayments” paypal account.

    This is the theory anyway, since Paypal UK does not seem to state these rates anywhere on their website…

  3. just followed this and got accepted! but im now thinking of my turnover and if micropayments will be the way for me. although i do have some items that i want rid of an expect to get 30+ so that would probably hurt me! i wonder at what price micropayments becomes more expensive.

    just a side note, to keep the amount 1500 and the new rate, could you just get sent some extra cash (eg say i was going to be at risk of losing the rate), and then refund the payment.

    i know some banks, who say you have to pay in a certain amount eg 2000 a month, you can literally just withdraw one day, and deposit it the next to meet the criteria.

    eg wages of 1900 go in the account, and then your short, so withdraw 101 and then deposit it back! you have now technically paid in over 2000 and kept the rates or benefits. ive tried it and its worked!

  4. Most buyers I deal pay by either debit card or bank transfer so there are many months when I don’t meet the threshold for preferential rate. However I have noticed that it does seem to automatically adjust back to 2.9% when payments received go over £1500.

  5. It is worth noting that registered charities get the lowest rate (1.4% + 20p) normally available to merchants with total transactions of over £55,000 per month


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