PayPal is a highly effective system for online payments. However, you should be aware that using PayPal when your shop isn’t always great for your finances. PayPal has fees on international purchases and payments.
These fees aren’t always high, but they can add up quickly, especially when you are processing many international payments.
Thankfully, if you understand how PayPal’s charging structure works, you may be able to avoid some of these fees. You should take the time to learn more about PayPal international fees and how they work so that you can minimize the impact they have on you.
Pay Attention To How You’re Funding Your Payments
There are plenty of different ways to fund payments on PayPal. If you have money in your balance, that can be your source of funding. You can also use a linked bank account or a linked debit or credit card to cover your payments’ cost.
The fees you pay will vary based on the way your payments are funded, which is why this is something that you’ll want to pay attention to. Using PPCurrencyConverter.com, you can check the conversions for personal and business transactions, which will avoid the stress of estimating the exchange rate fee and knowing exactly how much you will pay or receive when doing international transactions via PayPal. When possible, you’ll want to choose the option that has the lowest fees. In many cases, switching the way you fund your payments will save you a great deal.
Use Your Balance When Possible
If you already have money in your PayPal balance, you should use that to fund your purchases. It is the option with the lowest fees, which means it’s the option that will be most beneficial for you. You may want to specify that you want to use your PayPal balance if possible, in your PayPal settings.
If you typically transfer money from your PayPal account to your bank account immediately, you may want to change those habits. It can be very valuable to keep some money in your PayPal balance, especially if you regularly make international purchases on PayPal.
Consider Other Options
PayPal is extremely popular, but you should remember that it isn’t the only option you have. There are other ways to make international payments, and you may want to explore some of those options. For example, TransferWise supports online payments and has seen a surge in interest in recent years.
If you’re making a sale or a purchase, you won’t always have options outside of PayPal. You’ll be limited to the possibilities that the other party is willing to use. Despite that, it can be useful to look into these other systems. If you can switch to using another system for some of your purchases, you’ll still be able to save.
Try to Get A Better Exchange Rate
One of the reasons that international fees can be so high on PayPal is because of the exchange rate. That’s why you should look for ways to make that exchange rate better for you. Learning more about how exchange rates work on PayPal could wind up, saving you quite a bit of money.
A more favorable exchange rate could lead to significant savings, especially if you’re making a larger purchase. That’s why you should set aside some time to make sure you’re getting the best exchange rate possible on PayPal. If there’s a way for you to save money, you’ll want to take full advantage of it.
Limit Your Payments
You’ll have fewer fees if you make or receive fewer payments. If it’s possible to work with clients to reduce the number of payments, you should do so. If a client is making payments to you, you may want to send them invoices at the end of the month instead of having them pay you for each purchase. If you’re making payments to a client, you could request that they invoice you.
If you can limit payments, what you’ll spend on fees will decrease. This is one of the most effective ways to deal with PayPal’s international fees, so many people try to limit PayPal payments when possible.
Start Using Accounting Software
If you’re not using accounting software, this is something that you’ll want to invest in sooner rather than later. Accounting software can help you save in many ways, and the right software could help you reduce your fees on PayPal. In fact, some types of software are designed explicitly for PayPal users.
You may not have room in your budget to hire an accountant, but you can enjoy many of the same benefits if you start using accounting software. Take the time to find well-reviewed software that includes the features you need.
Request Friends and Family Payments When Possible
You can often avoid fees on PayPal by taking advantage of Friends and Family payments. While you’ll miss out on some of PayPal’s protections when you make or receive payments via Friends and Family, these payments often allow you to avoid fees entirely.
If you have a client or a business you work with on an ongoing basis; you may want to speak with them about switching over to Friends and Family payments. These payments require some degree of trust, but if you’re comfortable with them, they can save you a lot.
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Charge For PayPal Fees
Instead of avoiding PayPal fees, you may want to pass along the fees to the clients or businesses you are working with. For example, when you’re invoicing someone, you could include your PayPal fees in your payment. That way, you won’t take a financial hit from these fees.
Passing along PayPal fees may require you to raise your prices slightly. Thankfully, in most cases, it won’t make a difference. If you learn more about international fees on PayPal, you should adjust your prices and get paid more appropriately.
It’s essential to be familiar with PayPal’s international fees and some of the other types of fees on PayPal. If you’re more cautious when you’re using PayPal, you’ll be able to reduce what you spend, leading to substantial savings for you.