What do people think of the rise in pay pal fees ? They have increased their targets to $500,000PA

[mongrelfishing]

Pay Pal Australia as of 5/4/2018 have changed their discount targets to the following:

Standard fee 2.6% + .30c transaction fee unless you turn over P/A

500k to 1.8M will be 2% + $0.30

1.8M to 5M will be 1.5% + $0.30

over 5M will be 1.1% + $0.30

Previous targets were calculated monthly as follows

Monthly sales volume  $2,500.01 - $5,000.00  2.2% +fixed fee w/cross border 3.2% + fixed fee

5,000.01 - $15,000.00  2.0% + fixed fee w/cross border 3.0 + fixed fee

15,000.01-150,000.00  1.5% + fixed fee w/cross border 2.5% + fixed fee

150,000.01 and over 1.1 % + fixed fee w/cross border 2.1% + fixed fee

Standard fee is 2.6% + fixed fee

The new targets are simply unrealistic and unachievable for most small business. The old targets were fair and reasonable but the new one ?? 

I have emailed Pay pal and voiced my concern and have had phone conversations with a supervisor at Pay Pal who tried to justify the new targets. They have had many complaints and I trust there will be plenty more, Love to know every ones thoughts and hope more people protest...

[clarry100]

IMHO it's just one more reason to bail from selling on eBay where you get little/no other choice than to accept PayPal.
Better to focus on your own website where you can choose any payment gateway you please.
Of course you will have the work and expense of driving traffic to your own site.

[jfmgray]

Never happy when fees go up, but sadly fees always go up. For me its an additional 0.6% which I will have to absorb. 

[countessalmirena]

Well... PayPal adds another layer between buyer and seller. I suppose it was inevitable that their fees would go up at some point.

For sellers who may want to think about other ways of receiving their payments, it might be a good idea to have a chat with your bank and see whether they offer a merchant account package (including a gateway) that gives you a better deal. Sellers have some options; if they can accept credit card payments directly, they will have the ability to accept credit card payments from buyers without requiring PayPal.

There may potentially be some fallout for sellers deciding to do this, but not as much as there might have been a year ago, before it became known that PayPal is going to be phased out as the payment method of choice on eBay anyway, with Ayden replacing it.

There are always new members or guests buying on eBay, who have not gone through the whole payment saga here. For such members, buying from a seller who accepts credit card payment rather than PayPal payment (however it is funded) would probably not be seen as unusual.

Sellers could also do a little bit of extra checking with credit card payments if the card details look suspicious - come from a country not matching the buyer's address, etc. A refund could be given and the sale cancelled if it looks too dodgy.

It is, at any rate, worth thinking about... After doing a proper and thorough comparison, it might be for some or even many sellers that PayPal remains the best option, and in that case, it's a matter of revisiting every aspect of your selling strategy, right down to what you're selling and what further costs are going to be coming your way...

[mongrelfishing]

I won’t absorb it I’ll have to have a price increase of course the issue is about the increase in targets, perhaps I was unclear.. we almost have to triple our business to receive the discounts. The discounts are still in play just the goal posts have shifted .. we’re quite a bit higher than 0.6% btw

[mongrelfishing]

Some good points but Paypal probably still want us to use the with things such as postage through my post etc. I’m considering using credit card for all our own purchases for the business. They can’t have it both ways

[davewil1964]

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@mongrelfishingwrote:
I won’t absorb it I’ll have to have a price increase of course the issue is about the increase in targets, perhaps I was unclear.. we almost have to triple our business to receive the discounts. The discounts are still in play just the goal posts have shifted .. we’re quite a bit higher than 0.6% btw

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1.1%?

If you've gone to 2.6%, your turnover is less than 42k per month, so the best you would have been on is 1.5%.

It's a percent. Food, utilities, postage all go up by a lot more than that every year.

All I can say, as I said on the last thread about this, is that if your margins won't support a 1% increase in costs you need to seriously look at your business model.

[digital*ghost]

Personally, I'm thankful I had access to merchant rates for the time that I did - a couple of years ago? they introduced lower thresholds and gave access to many more sellers, even if it was for a limited time. (I believe the original threshold was $10k per month, which I definitely don't do...) But then they introduced the $2500 and $5k thresholds and I got a small break for a while. 

I am not surprised PP withdrew the discount, all things considered. It won't be that long before PP won't be the default option here, and I believe in around 5 years it won't be offered at all. While eBay purchases count for a small-ish percentage of the revenue they process, I still suspect that it's one of the largest, single sources of their profit (by which I mean, I think eBay = around 15% of their revenue, so when you consider how many other hundreds of thousands of businesses around the world are utilising PP on a daily basis, ebay is a huge part of their business), so it's still going to hit hard and I'm guessing they just want to make the most of the time they've got left. 

It's difficult to complain about it, in all honesty. While functionallly it's a fee increase for sellers like me, it's still technically the loss of a discount, which in real terms is a rewards program they have no obligation to maintain - i.e. it's not that far removed from when Subway got rid of those little cards that let you get free sandwiches after 6? purchases. I'll be curious to see if eBay offers sellers fee discounts for volume when their payment system comes in...

Wait, what am I saying.   Of course they won't.    

[jellybirddesigns]

Unfortunately as I add new items, I will have to price them a bit higher to compensate for the fact that I am now paying an extra 10% in "Digital Tax" on my store fees etc, as well as any higher PP fees, so it's around 10-11% more that I now have to pass on.

Fortunately my sales continue to be steady, so people are still seeing the value in my items. Since 40-50% of my buyers are overseas, they don't really worry about the price as the exchange rates are in their favour. 

[mongrelfishing]

Business model is just fine here thanks jusk asking what people think. When I spoke to management at Paypal they have had an influx of complaints regarding the shifting of the goal posts. We have easily absorbed FYI..
At least I have had a taste of what happens in a forum now