Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Mon Feb 6 2017 16:18:18

PayPal Makes Small-Business Exports More Costly

By: Ina Steiner

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PayPal is raising certain fees at the end of March, making it more costly to sell to buyers located outside of the country, as we reported in the most recent issue of EcommerceBytes 411.

PayPal spokesperson Justin Higgs told EcommerceBytes that PayPal is changing the fee for selling online outside the US from 3.9% to 4.4%.

PayPal also charges an additional 2.5% fee for any currency conversion and a 1% international transaction fee to receive payments from another country. Higgs said PayPal is increasing the currency conversion fee from 2.5% to 3.0%.

That is a 1% higher cost for US sellers for international transactions. Sellers outside the US should check to see how PayPal policy and fee changes affect them.

News of the higher fees was published on the PayPal website on January 30th and was buried in an email about Policy Updates, here's the letter one seller received today.

Dear (Seller name),
We are making some changes to the PayPal User Agreement, PayPal Privacy Policy, PayPal Here Agreement and the PayPal Website Payments Pro and Virtual Terminal Agreement that will go into effect on March 29, 2017. If you're interested in more detail, please visit our Policy Updates Page. Updates include:

- We're updating the list of items that will not be eligible for PayPal Purchase Protection or Seller Protection.

- We're revising the set off rights by removing the 180 day past due requirement.

- We're updating our list of restricted activities.

- We're notifying you of the movement and processing of information to cloud-based service providers.

- We've updated the "Payment Method Used for My Transaction" section to describe changes that give you more control and choice in how you want to pay.

- We're changing some of the fees we charge.

These changes, along with the others detailed on our Policy Updates Page, will become effective March 29, 2017 for all U.S. users. We encourage you to review the Policy Update and familiarize yourself with the changes that are being made. If you do not agree to these amendments, you may close your account before March 29, 2017.

Thank you for being a PayPal customer.
Sincerely,
PayPal

Let us know if you've received notification and what you think of the policy and fee changes.




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Readers Comments

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

by: FeelingFroggy This user has validated their user name.

Mon Feb 6 17:45:26 2017

Just another reason to buy and sell AMERICAN....

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

This user has validated their user name. by: iheartjacksparrow

Mon Feb 6 20:23:27 2017

If the high cost of the Global Shipping Program didn't kill foreign sales, this increase probably will.

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

This user has validated their user name. by: Ming the Merciless

Mon Feb 6 20:51:17 2017

Raise international shipping a dollar or two.

Thanks to the avaricious Global shipping program, I now only sell to a handful of European countries, Canada, Australia, and New Zealand.

Ebafia's ubiquitous greed again bites them in their backside.

Does anyone know when their contract with GSP Pitney Bowes expires?

Something more reasonable must replace it if ebafia really wants more sellers to sell internationally (besides illegally changing our settings).

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

by: pace306 This user has validated their user name.

Mon Feb 6 23:03:23 2017

Well, no one can claim that PayPal isn't a "good earner".

The head of the family demands that every part of the family up their kick up to him.

Of course this means that eBay - the other good earner - will have a Seller Update with increased fees as well.

Typical mafioso behavior  

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

by: dans parts This user has validated their user name.

Mon Feb 6 23:34:04 2017

I actually had a guy in Germany ask me this week if I'd check the fees for the GSP, since he considered my shipping charges too much!!

I use calculated shipping, and add on $3 to cover insurance, etc.

And he thinks GSP will be cheaper?

I pretty much (in more polite terms, of course), asked him what he was smoking...

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

by: moto-science This user has validated their user name.

Tue Feb 7 09:11:43 2017

We have to decide whether to raise prices.....the economy is still weak.
We keep absorbing USPS shipping increases. Paypal wants 4.4% tribute
when STRIPE only charges 2.9% on International. I guess we will have to
charge 1.5% more for Paypal....or push our customers into using STRIPE.
STRIPE is fantastic.....if you ask me for credit card processing.

Paypal never really escaped the lousy customer service reputation they firmly established with Ebay.

Then there's this : In representations to your customers or in public communications, you agree not to mischaracterize PayPal as a payment method. At all of your points of sale (in whatever form), you agree not to try to dissuade or inhibit your customers from using PayPal; and, if you enable your customers to pay you with PayPal, you agree to treat PayPal’s payment mark at least at par with other payment methods offered.

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

by: kalannia This user has validated their user name.

Tue Feb 7 09:54:36 2017

I was expecting this increase for a while - when I notice the trend in my stores and the number of buyers pulling a "I didn't receive my order and USPS has no idea where the package is" claim with PAYPAL
1. PAYPAL investigates after I uploaded evidence of shipment and package arrival in the US
2. PAYPAL concludes that it is a "special circumstance"
3. refunds the buyers fully
4. tells the seller that no monies will be pulled from their account due to "special circumstances" and they are refunding the money on their own accord
5. one day after the refund, buyer heads down TO the post office, picks up the item

On PAYPAL's end something has to give.  And of course it falls on us sellers paying higher fees.

On an off (but related) topic :
I'm personally not sure if I can get these errant buyers for postal fraud (it is hard but I have evidence of one of the cases) - but because I have made no loss, could I actually file it?

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

This user has validated their user name. by: LasVagueness

Wed Feb 8 00:22:23 2017

'Nickeled and dimed' should be changed to 'quartered and dollared.'

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

by: Sierra This user has validated their user name.

Wed Feb 8 00:32:19 2017

JD is financing his next golden parachute!  

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

by: Sierra This user has validated their user name.

Wed Feb 8 00:34:18 2017

USPS killed my international sales 4 or 5 years ago ... when they first doubled international rates.

I'm very happy to buy American!  

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

by: comet This user has validated their user name.

Wed Feb 8 00:41:29 2017

Odd  that  after  about a YEAR  with NO  International  sales  via  ebay  in the past  few WEEKS  I  have  a bunch.  Wildly  different  countries.  One  who  placed a Best Offer  and  I  told  him about  what  the shipping  would  be--a  steep  $32 for  a 3 lb  package  to Israel---and  he  immed PAID  and  then paid  $48 for SHIPPING!  Never  (apparently)  batted  an  eye--and  I  will refund  if  there is a big  difference but---

Does  make  you  wonder.  I  do NOT  and  never HAVE  used  the GSP  program;  and I  used to  sell to the rest of the world  ALL  the time;  I  rely  on  the USPS  for  prices  which are  usually  fairly  close;  if  I  have a real question  I  just  take  the item  and  the packaging  to  the PO  and  get a more  exact price.  (I DO  try  and steer  International sales  OFF  ebay if  I  can=--save  them a bunch  and  saves  me  possible  issues)  

I  don't  sell  enough out of  the country  now  for  this to be a big  deal;  but  I  will have  to  make  sure  my weights  are  "padded"  a  bit  to  compensate  for  adjustments  to  these  fees form  the USPS  PP  and ebay.  

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

by: handmedownheaven This user has validated their user name.
Web Site

Wed Feb 8 00:44:02 2017

We left global shipping when we had to fight for hours to remove a negative feedback from Germany.  The reason was our American sizing didn't fit his oversized rear end.  Now the only country we ship to is Canada.  I use first class international mail and can control everything rather than letting Pitney Bowes charge their fortunes.

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

by: Moonwishes This user has validated their user name.
Web Site

Wed Feb 8 00:51:51 2017

Funny I've had a bunch of international shipments since the first of the year. About a quarter of what I had all last year and that doesn't include the mail forwarding to other countries.

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

by: LadyTWH This user has validated their user name.
Web Site

Wed Feb 8 01:20:26 2017

Square is a much better option for accepting credit card payments. I stopped accepting Paypal when they went to the 180 days to return over 2 years ago. Do I miss some sales? Probably, but I would rather close up shop than accept Paypal.  

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

by: zigziglar This user has validated their user name.

Wed Feb 8 01:28:58 2017

Buy American YES, but SELL we have a huge growing client base outside our small 5% of the population, my best margin and sales come from BUYERS and in past year or two even good CHINESE BUYERS! It's about time we get some reward for all we lose to The Chinese markets not just in fraud and manipulation but cheap manufacturing and now micro level sellers who GET subsidized shipping, it's cheaper to ship a 1st class package from BEJING to DALLAS than to ship by USPS from Boston to DALLAS! And nevermind having even the cheap option, duty/tariff free to ship to CHINA! Amazon/Ebay LOADED w/ these sellers, as we just got 8% to 22% increase in FIRST CLASS MAIL PARCELs, China while 14-21 day delivery pays less door to door China to USA! Unfair these negotiations they get!

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

by: BigR This user has validated their user name.

Wed Feb 8 09:47:52 2017

Hey Y'all,
I used to sell over $50,000.00 a year internationally.
With the major increases in postal rates since 2014, my items have become very expensive to international customers.
Along with eBay's ridiculous polices on defects, returns and exchanges, selling internationally has become way to costly.
It now takes just 1 item not as described to kill any profit for 10 additional international sales.
As of Jan 1 2017, I have discontinued international selling on eBay and Amazon.
Thanks to those 2 platforms, international sales for USA sellers is all but dead.  

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

by: go-figure This user has validated their user name.

Wed Feb 8 10:52:11 2017

Well, that will certainly be the end of what little international biz we do with/through Paypal. Don't think this one's going to work out all that well for them.

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

by: moto-science This user has validated their user name.

Wed Feb 8 11:43:24 2017

We are turning off PAYPAL for International payments.......if they persist is charging 4.4% on International. This is PAYPAL
pulling one over. I'm not raising prices.
I can take the payment through Stripe  for 2.9% and offer Paypal as a manual charge method where I will recoup the 1.6% difference.

If we don't resist, how do change anything ? What's stopping them from asking for 5% on international ?

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

This user has validated their user name. by: NiciArt
Web Site

Wed Feb 8 13:51:02 2017

Slowly but surely any hope of growing in international markets seems to be dashed by the ongoing and almost continuous onslaught of fees and expenses.

While currencies fluctuate and strengthening USD has effectively increased the cost of our products by 20-40%, the USPS hike in 2016 really managed to plunge the death nail into our international business. Dwindling from 25% of all orders down to a mere 5%, loosing the international markets has taken a bite of revenues.

Certainly these new Paypal fees are far from a make or break on their own, however in combination with the USPS hikes, strengthening dollar, and stricter enforcement of VATs or taxes, the international sales are slowly cost prohibitive for customers abroad. Factor in the long transit times, unpredictable delivery methods, and lack of adequate insurance coverage, the hope of solid international sales is just a pipe dream

Perminate Link for PayPal Makes Small-Business Exports More Costly   PayPal Makes Small-Business Exports More Costly

This user has validated their user name. by: RKTOYS

Wed Feb 8 14:05:18 2017

Look, I haven't been able to ship to or from Canada for over a decade.  Last week I wanted to help a Canadian seller out; shipping charges across Lake Erie were $30/lb.  And the Chinese get to ship across an _ocean_ for just $1?  That's insane!



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