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PayPal Hikes Fees for Canadian Sales to US

Forthcoming fee changes at PayPal affecting Canadian sellers caused a stir when they were first announced. One discussion at the Etsy forums expressed horror at PayPal’s fee update that will take effect on April 13th.

“We have made changes to Section 8.4(b) of the UA and Section 2(e) of the Pro/VT Agreement to update the fees that apply to Canadian Sellers selling to buyers located in the United States,” PayPal noted in their recent upcoming Canada policies announcement.

Canadian sellers with US buyers will be charged a standard rate of 3.7 percent plus a fixed fee – that’s up from 2.9%. Sellers who have qualified for merchant rates will pay the same rate unless their monthly sales volume exceeds $3000, with higher volumes enabling lower rates.

PayPal provided us with the following statement when we enquired about the change:

“We shared an update to our User Agreement for Canadian customers, including a 0.8% cross-border fee for Canadian sellers who receive payments from U.S. Buyers. This fee will be effective April 13, 2016 and is similar to the cross-border fee we charge these sellers for receiving payments from buyers in other international markets.

As Canadian sellers know, accepting payments with PayPal for international payments is a simpler, safer and more competitive way to grow their international reach and sell to PayPal’s 167 million active customers (outside of Canada).

In a recent survey, Canada was identified as the second most popular shopping destination for American online shoppers and 65% of them identified PayPal as their top payment method for shopping overseas.”

Although PayPal and eBay have separated after a long time together, PayPal’s Canadian customers remain well-represented among eBay sellers. The announcement of the fee changes elicited a vibrant response on the eBay Canada forums. Poster “dianequeenofstuff” opined on the topic:

“What really twists my gears out of shape is their comment: “If you don’t agree to the fee changes, you may terminate your relationship with us by closing your Account before April 13, 2016, and won’t be bound by the amended terms.”

“This is a hostile business practice IMHO. Much like when eBay made sure we could not accept any other payments than electronic /Paypal payments (a few years ago) by blocking any listing mentioning checks or money orders.

“Where does that leave us if we don’t agree? Unemployed?”

But another poster, “pierrelebel,” suggested the changes work out well for Canadian sellers:

“Since 2000 PayPal has been charging American sellers 3.9% (including 1.0% cross border fee) when selling to Canadian buyers while no “cross border” fee was charged to Canadian sellers when selling to American buyers.

“The changes coming in a few months still leave Canadian sellers paying a bit less than American sellers (3.7% vs 3.9%) for cross country (Canada/USA) transactions.

“We had a great deal for fifteen years. Now it is gone.”

You can find out the current fees on the existing PayPal Canada user agreement.

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David A Utter
David A Utter
David A. Utter is a freelance writer based in Lexington, KY. He has covered technology topics from search to security to online business and has been quoted in places like ZDNet and BusinessWeek. He considers his appearance on NPR's "All Things Considered" with long-time host Robert Siegel a delightful highlight. You can find him on Twitter @davidautter and on LinkedIn.