Of course, nobody likes paying PayPal hidden fees to receive the funds that you have worked hard for. Right? But you may be wondering, is there a way to circumvent this? Yes! We have uncovered 5 simple ways for you to keep a close tab on. Read on for a closer look at PayPal’s hidden fees and how to avoid them.
PayPal Hidden Fees
PayPal account registration is absolutely free and the signing up process does not cost you a penny. For this reason, some people feel that PayPal is great when used for international money transfer. No, it’s not – in fact, it’s actually very expensive.For example, while you don’t get charged for an upfront fee, PayPal simply rolls the cost of transferring money in a foreign currency into their exchange rate margin. While you may find it complicated to work out what exactly is their currency conversion rate margin, the PayPal rate is taken from the standard exchange rate (known as the Interbank Exchange Rate) which is not guaranteed.
Depending on your country of residence, PayPal’s exchange rate ranges between 2.5% and 4%, and this is a lot more expensive than Knightsbridge FX.
In addition to these PayPal fees, there are also other hidden fees that you can incur as you conduct your online business. They include:
- Withdraw fee: While withdrawing money directly to your bank account is said to be without cost, there is actually a fee to withdraw outside of the US. Some banks may even charge you for withdrawing from PayPal.
- Reversed payment fee: You will only receive a percentage of your paid fee when you refund money to a client as PayPal retains a fixed fee.
How to lower or Ignore PayPal Hidden Fees?
Knowledge is power, they say. Now that we know what PayPal hidden fees are, we can take active steps towards avoiding them.Apply for merchant fees
If you’re consistently receiving $3000 or more in sales on a monthly basis, you can then apply for merchant transaction fees. If you qualify, your transaction rate is reduced to 1.9%.Trade in Local Currency
While it is normal to incur some fees when exchanging currencies, you may be able to avoid PayPal's hidden fees by accepting payments in the same local currency that you trade in.Ask to Be Paid as Friend or Family
You can ask your customers to pay you via the friends or family option in PayPal. With this method, your client won’t be charged a fee for sending you money and you won’t also be charged a fee for receiving your funds.You deserve to save as much of your hard-earned money as possible rather than giving it over to PayPal in the form of hidden fees!
