Sometimes it pays to be picky, which is why it’s crucial to weigh all your options before selecting a payment processor, especially PayPal. So if you’re considering a partnership with them, you should be aware of the increasing PayPal partner fee that comes with their services. Otherwise, if you’re not careful enough, you could be wasting your business an unnecessary sum of money.
Let’s explore the most common types of PayPal fees that you could potentially end up paying, so we can help you make better-informed decisions on which payment processor is suitable for your business.
As of late, PayPal’s approach to credit card transactions combines different fees and adds their additional cost on top of that. Currently, companies in the United States that use PayPal have a fee of 2.9% with an added .30 per transaction.
All parties involved will receive a percentage of the sale for every transaction, otherwise known as interchange. In case anyone was wondering, an interchange consists of the issuing bank (the customer’s bank), the credit card company, the merchant bank (your bank), and the payment processor (PayPal). Recognizing who’s involved in the transaction process will help us better understand the individual fees tied to the PayPal partner fee.
For credit card transactions processed through PayPal, three types of fees take place:
An interchange fee is the percent of the sale amount determined by the issuing bank, along with a fixed transaction fee. Meanwhile, an assessment fee is decided by the card network associated with the cardholder (primary cardholders include Visa, Discover, Mastercard, etc.). Finally, a markup fee is for the remaining entities involved in the credit transaction and receive a portion of the sale through the card network.
As you can see, it’s essential to look more closely at PayPal partner fees because overlooking these important details could harm your business.
While you might not be able to eliminate every single fee, there are measures you can take to reduce the number of expenses. Here are some tips you should consider to help you avoid extra costs:
On the surface, PayPal may seem like a decent processing partner to start your business with; however, it’s not uncommon for them to freeze accounts after some time due to various reasons. For example, PayPal’s seller protection policies do not reach digital goods, and that can lead to numerous chargeback fees. Also, PayPal isn’t a super-friendly payment processor for high-risk merchants, which is another crucial factor you must consider for your type of business.
Consider an alternative to PayPal and PayPal partner fees by contacting our team of experts here at WizoPay! We specialize in helping high-risk merchants and can get you fast approval in no time. So, begin your payment processing journey today with WizoPay!