Paypal is charging 34% fee to me

[nuttymarketer]

I do not what is going on. But I have a service for $1 menu. Now if someone pay through Paypal, paypal cut a fee of 34%. and I am left with $0.66 . I have writen paypal for clearification. But they have not replied yet.

Is there anything, I have missed. What is this fee. I have never seen such an outrageous fee. Can anybody explain?

Arvind Kumar

[ADAM Web Design]

They charge a fee (I believe it's 30 cents US) for every transaction, regardless of dollar amount. And before you blame PayPal for this, as I'm sure you're going to, every payment processor, online or offline, has a per-transaction fee.

This is the list of fees that apply to you. (https://www.paypal.com/cgi-bin/webscr?cmd=_display-fees-outside&countries=ROW) It comes from the Fees link at the bottom of the opening page, followed by a click through to "Other Countries".

I'm no PayPal fan, but they're right in this case. PayPal was never developed for low-dollar, high-volume transactions. You just didn't read the site and you got burnt. Take it as a lesson learned.

[nuttymarketer]

How can I am be so damn foolish????

I have read everything and when it came to hit, I miss. Thank you Adam.

Can you suggest me something for the low transaction. Like $1 -$10 . I am sure there must be some efficient way to do this.

[Corey Bryant]

$10.00 would be a lot better. What you are wanting is something called micro-payments which is very difficult because the transaction fee will cut into your profits.

If you have a lot of transactions a month, you could talk to the MAP (merchant account provider) to possibly get the transaction fee reduced to $.15 or $.20 a transaction.

[MichelH]

Maybe a payment solution where customers can pay through telephone will better suit your needs, although I haven't got a slightest clue what kind of transaction fee they normally charge. My guess is around 0.05 USD per transaction.

As far as I can see, a merchant account or third party processor is not suitable for you.

[ADAM Web Design]

It really depends on what you're selling, but I'd suggest a minimum of about $5. That way, you're "only" paying about 9-10% initially (.30 cents + $0.12 - $0.17 per transaction). Once you establish volume, then your cost per unit will get lowered and you can also talk to your payment processor about lowering the per transaction fees.

[jestep]

A $1 ticket size is definitely not looking good. A payment processor's buy cost for keyed entry is somewhere around 1.95% and $.25 / transaction (including AVS).

Even if you get a bundled rate, you are going to have to pay a total of at least $.45 / transaction for a $1 transaction. This is assuming that you have no other fees, at all.

There is really no way to get under this, because a merchant account provider can't go under their own buy cost. If you can increase your ticket size, the cost per transaction will go down significantly. Otherwise, there really isn't any other choice than to eat a huge portion of each sale in processing costs, or don't take credit cards.

I hate to put it this way, but I don't see any other options with such a low ticket size.

[MichelH]

Hey, maybe this tread on another forum is helpful to you:
http://www.webmasterworld.com/forum22/4251.htm

It's about Paypal offering micro payments for 5% + 0.05 per transaction.

[tradefax]

Dear Friends out there !

Did you ever here from www.moneybookers.com ???
The are cheapest we know.

Rgds

Fred G. Handreck

[kerer99]

Hey, maybe this tread on another forum is helpful to you:
http://www.webmasterworld.com/forum22/4251.htm

It's about Paypal offering micro payments for 5% + 0.05 per transaction.

Hmmm...forum topic dates back to almost 2 years ago - I don't think it applies anymore.

Over the years, as an ebay seller, and a website product seller, I have accepted that PayPal is simply expensive to use, and they do not cater to small merchants.

Being Canadian, they deal me an extra blow of charging a $0.50 withdrawl fee if the amount is under $150.00 CAD. This is on top of all the other fees they charge.

Pretty outrageous...but I've been unable to find anything as reputable or as comparable.

[MichelH]

Hi Kerer,

Sorry, I didn't even see that the other topic was almost two years old, my mistake.

I think many people do know Moneybookers but don't consider it to be a payment processing platform but more of a person to person money transfer platform.

Anyway, I think the problems for micropayments are legit. Mobile solutions might be an option, but usually does not work when you have international customers.

I have been looking around and I did find two companies that offer solutions for Micropayments. Unfortunately, I really don't know if these are reputable companies, but here are two links:

http://www.centipaid.com/
http://www.paystone.com/

Hope this helps!