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How to avoid or reduce big fees when offering a service?

by roley
9 replies
I 've been offering a service and using paypal but I'm seeing that if I charge a client $1,000 paypal is taking a big chunk of that 2.9% within my country and 3.9% if the payment comes from outside the country ( thats if they pay by credit card which appears to be where most of mine are coming from )

I send them a paypal invoice before doing the work. I wonder if it makes any difference if i just send them to a page with a paypal button vs sending an invoice

Anyone recommend a way around this

or

A better service for receiving payments so the fees don't eat into my quote

Thanks
#avoid #big #fees #offering #reduce #service
  • Profile picture of the author Robert Michael
    Unless you have them wire it directly to your bank account, you are always going to have some sort of fees.

    That is how these places stay in business.
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  • Profile picture of the author TheContentAuthority
    roley,

    A common business practice is to pass these fees along to your customers. For example, some businesses will try and recoup the fee charged by credit card companies for accepting credit cards (which is typically around 2.5 to 2.7 percent). They call it a convenience fee or something like that in order to pass it along to the customer. Not all businesses do this and some only do it on small transactions.

    You could try something like that if you think your market would bare the cost. I know that customers don't like to be charged more money but that may be one of your only options. As mentioned by whosthatguru, you will be hard pressed to find a service that does this for free. After all, Paypal has their own costs involved with facilitating these transactions.

    here is an interesting article on passing fees along to clients,

    PayPal Fees | Should You Charge Your Clients? | JUST

    best,

    Shawn
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    • Profile picture of the author roley
      If you live in the USA

      Is it best to receive the funds in USA or in the same currency the person you are doing work for is in? and then changing it over?

      As it appears the jump from 2.9 to 3.9 is based on what your accounts currency is set to and what the senders is.

      So USA to USA is 2.9
      Australia to USA is 3.9

      But apparently you can create another currency in your account and then when the Australian one comes in you may only be hit with the 2.9 but then you have changing it over. I dont know. lol
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      • Profile picture of the author Istvan Horvath
        Originally Posted by roley View Post

        But apparently you can create another currency in your account and then when the Australian one comes in you may only be hit with the 2.9 but then you have changing it over. I dont know. lol
        If you don't know, then don't assume...

        Yes, you can have other currencies added to your account but you would lose more on the conversion.

        Are you a business person or a coupon collecting housewife? Business people are aware of the costs of doing business. Fees for processing payments (be it Paypal, a merchant account or any other service provider) are just that.

        Small payments > small fees.
        Big payments > big fees, if they are %-based.
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        • Profile picture of the author JohnMcCabe
          First off, I have to question your definition of "big fees". I was picturing some middleman site taking 20% (like Fiverr) or more.

          3-4% is chicken feed. If it's causing that much angst, do what the big boys do - build it into your pricing.

          Istvan called the shot - do you want to operate like a real business or a housewife making extra pin money?
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    • Profile picture of the author moregare
      Take a look to Bitcoins
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  • Profile picture of the author clever7
    Since you believe that you are paying too much on fees, you should ask for more money from your customers for your service, so that you won't feel that Paypal is taking too much.

    For example, if you are charging $10 for this service, you should charge $13 instead, so that the customer may pay the Paypal fees. I believe that it will be better to directly include the fees in your price than telling your customer that the extra $3 represent the Paypal fees. They may believe that you should pay these fees…

    If you will include them in your price the same way you include other expenses, it will be better.

    Paypal has to take its commissions. It helps you feel safe and be sure that you will receive your payment because it checks all credit cards very well.








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  • Profile picture of the author planbpayments
    You cannot avoid fees if you want to accept Credit card payments online.. but you can definitely lower the fees by applying for a merchant account with an acquiring bank rather than using an ewallet like Paypal.
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  • Profile picture of the author Apra Barua
    You can also take a look at Xoom.com services.
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