PayPal sent an email to customers alerting them to “some changes to our legal agreements,” but despite the fact the changes impacted fees, it never said so in the email notice, instead advising sellers: “There is no action needed from you today, but if you would like to learn more, you can find details about these changes, when they apply and what you can do if you want to decline the changes on our policy update page.”
Sellers who visit the policy update page by clicking on Legal at the bottom of the PayPal homepage and then select “Policy Updates” can find the information by scrolling down the page to Notices, Issued: December 3, 2024, which contains the information about fees changes that take effect on January 13, 2025.
The fees PayPal business accounts pay for receiving transactions are being updated for certain Payment Types – excerpts of the changes follow below (be sure to visit the page for the full details):
PayPal Pay Later options. PayPal business accounts, when acting as sellers, will be charged a standard domestic rate of 4.99% plus a fixed fee per transaction when a buyer uses a PayPal Pay Later option to fund their purchase, including when the purchase occurs through PayPal’s Invoicing service.
Alternative Payment Method(s). The standard domestic rate for Alternative Payment Method (APM) transactions will be 2.89% plus an updated fixed fee per transaction. At this time, there is no change to fees for APM transactions when the purchase occurs through PayPal’s Invoicing service or to fees for APM transactions through Pay Links and Buttons.
Advanced Credit and Debit Card Payments. The standard domestic rate for Advanced Credit and Debit Card Payment transactions will be 2.89% plus an updated fixed fee per transaction. The domestic charity rate for Advanced Credit and Debit Card Payment transactions will be 2.19% plus an updated fixed fee per transaction. At this time, there is no change to fees for Advanced Credit and Debit Card Payment transactions on the Interchange Plus Plus fee structure.
Virtual Terminal. The standard domestic rate for Virtual Terminal transactions will be 3.39% plus an updated fixed fee per transaction. The domestic charity rate for Virtual Terminal transactions will be 2.69% plus an updated fixed fee per transaction.
As PayPal states on the policy-change page, “The updated pricing listed above will result in fee increases for some transactions.” For example: fees for using PayPal Virtual Terminal are currently are currently 3.09% plus 49 cents (for US currency). As stated above, beginning next month it will cost 3.39% plus 29 cents (US currency). Because the fixed-fee is decreasing for Virtual Terminal transactions, it could result in lower fees for transactions conducted in US currency, depending on the value of the item.
PayPal’s Virtual Terminal is a web-based application that processes credit and debit cards, replacing swipe machines. Merchants can accept credit or debit card payments by phone, fax, or mail – allowing online sellers to process payments for offline sales.
