# What is so special about \$11.90?

6 replies
• |

I just posted this on my blog - about Paypal micropayment.

What does \$11.90 have to do with your paypal account?

Paypal's Micropayment system has been around for years, but not many digital sellers knew about this - I certainly didn't! I wish I did because it would have saved me a bundle on Paypal transaction fees!

When you sign up for a standard Paypal account, you are automatically put on the 2.9% + \$0.30 transaction fee schedule. But what they don't tell you is that you if you frequently receive small amounts (aka micropayments) then you can opt to be put on their Paypal Micropayment fee schedule.

First, let's compare the transaction fee schedule for the different account types:

Paypal Micropayment: 5% + \$0.05

Anyone with basic algebra skills can solve the equation, \$11.90 is the answer.

If you set the two transaction schedule to be the same:

2.9%(x) + \$0.30 = 5%(x) + \$0.05

x = \$11.90

\$11.90 is the transaction amount cutoff for deciding whether you should accept the money via your Business/Premier account, or your Micropayment account.

If the transaction amount is less than \$11.90, you are better off sending the transaction to your Paypal Micropayment account.

If the transaction amount is more than \$11.90, your fee will be lower if you send the transaction through your Paypal Business/Premier.

Want to verify this? Just plugin a number into the 2 fee schedules, and you will see why.

Now, it's quite simple to convert your Business/Premier account to a Micropayment account. However, before you do I would suggest that you open a new Paypal account, and convert your 2nd account to Micropayment. This way you have the flexibility of saving on Paypal fee for any transaction amount.

http://micropayments.paypal-labs.com/

I hope this will help you save a bunch on Paypal fees, especially those of you who are running \$1 free trial offers - you are talking about the difference between netting \$0.679 versus \$0.90, and imagine the savings on 1,000 such transactions!

Now a brain teaser: What if the transaction amount is exactly \$11.90, should you use your Paypal Business/Premier or Micropayment account to accept the payment?

Original post:
Lowest Fee On Micropayments? \$11.90 and Paypal Micropayment Explained - Guru Consulting Services
• That is great for someone wanting to sell piddly stuff on ebay or where ever. Or even if you have a \$7.00 WSO here or something.
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• Yes, I have been with Paypal for over 5 years and I never knew this information, thank you for sharing!
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• Also, it's possible to switch from micropayment to standard rate, if wish to to just keep one paypal account:

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• This is huge!!!

I believe it will help a lot of us who are selling WSOs
on a regular basis.

Thanks for sharing this info.
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• No problem, Joseph... I actually found out about this when I was checking out WSO Pro (by Mike Lantz) which features Paypal micropayment integration - I was like... What the hell is that???

Upon further digging I went out to get a 2nd paypal account, and just got it converted to micropayment rate... this will be my WSO paypal account
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• Wow, thanks a bunch! Most of my WSOs are 10 bucks and under, and I'm cranking out more of them lately. You just saved me a lot of money!
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