The first year you do business online, you’ll love the convenience of instant payments by PayPal. But then your business will grow a little more, and some customers will ask you to pay by credit card. You must upgrade your PayPal account in order to offer them this.
Once your account is upgraded, PayPal will help themselves to a wee little service charge for every transaction you make. Bank-account-to-bank-account payments incur one fee, and then credit card payment fees are even higher. The regular PayPal fee is 2.9% plus .30 USD. I forget what the credit card fee is; I think I blocked it out.
Gradually though, as your client invoices grow larger, you’ll see more and more money being deducted from what they pay you. You might think, “Oh, it’s such a such a small amount.” But what if I told you that you’d be making $70,000.00 this year? And then what if I said that I was going to take out of that $2,030.30, for no real reason. You’d be disappointed, right?
It’s the equivalent of opening your window and tossing two thousand bucks out into the street. Just not really a smart move.
Thankfully, there’s an awesome tool out there that lets you calculate your PayPal fees up front. So, if you’re billing your client $2,000.00 for a website design, you can add a PayPal Convenience Charge to the invoice.
The charge that PayPal would take out of a $2,000.000 payment is $58.30.
I know some people would say, “Oh, what’s sixty bucks?”
But I think they forget that financial institutions get rich by taking out 2 dollars there and 3 dollars here, a $15 processing fee here and a $50 late fee there, from every customer they serve. And the rich get richer by being good old-fashioned, penny-pinching misers.
If you think you’re going to be a hero and eat the charges for your clients, just give up the dream. Every major corporation charges the customer for banking and electronic payment fees; that’s just how it’s done. It’s a convenience. If the customer doesn’t wish to pay the fees, they are welcome to mail a check.
Next time you bill your customer $1,800.00, and you feel sad when you see that PayPal helped themselves to $52.50 of it, remember the PayPal Fee Calculator and tack on a Convenience Charge for using PayPal.
One of my clients actually sent me the link and I can thank him for saving me a few thousand dollars on next year’s income!
- Dina at Wordfeeder.com Copywriting and Marketing
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Email Dina@Wordfeeder.com for a copywriting or website marketing quote today.
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