How To Reduce Or Avoid PayPal Fees
PayPal is one of the leading and famous service providers that allow people worldwide to either send or receive money. However, just like any other similar platform, you have to pay some fee for your transactions to go through. If you check your financial records at the end of twelve months, you will notice that the prices sum up to a considerable amount, which is technically a loss from your end. But is there a way you can avoid or reduce these costs? PayPal charges are limited to a variety of transactions. Sending money to friends and family is free. By taking advantage of such opportunities, below are some more ways to save money and maximize your profits.
1. Use Alternative Invoicing Methods
Most people who use this platform are in business and they tend to overlook these minor fees when they calculate PayPal fees. Under such circumstances, PayPal charges a fee of almost 2.9% for every transaction that you make. It happens when you request to either receive any goods or services. However, if the operation indicated that you are sending money to either a friend or relative, it does not attract any fee. You first need a guarantee that your recipient is comfortable with this kind of arrangement. There should also be a strong trust base that the money you are sending will land in safe hands. Nevertheless, another option is to split the fee between you and the other party.
2. Avoid Frequent Unplanned Transactions
You will enjoy when working with PayPal that you have no limit to the number of transactions you can make within a specified period. However, what you do not know is that it is beneficial to the company and a loss. PayPal allows you to pay for food in a restaurant, buy groceries in a shop, or even shop online for shoes. Every time you click that button, you add a coin in their account and subtract from yours. It is far much wiser to plan so that you can make one lump sum withdrawal. It reduces the charges by a significant percentage, and you also avoid overspending.
3. Change Your Business Payments Structure
If you operate a business where you get frequent payments from your clients each day, PayPal will charge almost $0.3. If accumulated, this figure translates to a large amount of money that you can use for other essential things. If possible, ask your clients to be making a one-time monthly payment on a specific date to reduce the fee. It can inconvenience you, but with proper accounting methods, you will benefit more.
4. Be Tax Compliant
Most people avoid the burden of paying taxes, not knowing that there is some advantage to it. If you are a frequent PayPal user, you can claim your transaction fees when you file your returns. It is a benefit that hugely builds people in the business. For any online payment that you make, add up the overall costs that you had been charged over the year then sum them up with your deductions. It is a relief, thus not so many financial losses on your side.
5. Use Another Platform
If you can't find a way around this issue, you can always use alternative money sending platforms. There are quite a number of them, and they function more or less the same way. Some of them include Venmo, Skrill, and Neteller, among others. However, you need to research and establish if you will be getting better services or not. All these providers work in a competitive way to attract users; hence most of their operations run on the same policies.
6. Request To Have Payments In A Specific Currency.
Conversion fees are always fluctuating; therefore, depending on when you will be receiving money, the price can either be high or low. If you ask to get your payments in a specific currency like USD, you eliminate this factor and evade the costs. However, it would help if you were sure that this method applies to all other major currencies.
7. Acquire A Business Account
Rather than operating on a freelancing mode, you can get a PayPal business account if you are an entrepreneur. Businesses always have a high turnover of cash, and this account is ideal for making things simpler. If you own it, you get to benefit from a reduced fee on any transactions. Whether you are making payments or receiving money, you will only pay for a standard fee despite the amount of cash.
PayPal has made life more comfortable, and many people continue to benefit. However, you have to ensure that you do not lose your hard-earned money through situations that you can avoid.