I don't complain or blog but I wanted to see a story run on PayPal Merchant Fees changing. I am a small business owner and process all my coins and collectibles transactions on eBay and Amazon. I am considered high volume by PayPal at the 2.2 percent rate, currently. However, I received a recent notice of an increase in .7 percent in processing fees taking affect next month to 2.9%. This is going to kill me since my margins are already small.
What irks me is that PayPal is completely doing away with customer loyalty. No matter what volume you do, you are going to be charged the same straight 2.9 percent fee.
This may not be much for someone that does $100 a year but makes a huge difference for a small business owner doing 2-3 hundred thousand in sales since it's a flat rate change ($700 increase per 100K). You are actually harmed by doing more business with them with this type of schedule.
The price change harms mid-high volume sellers that only process via PayPal on eBay. If you have a separate credit card terminal, you can keep the rate and pay a monthly fee for PayPal payments pro account that excludes these changes.
They tried to sell me this but NOONE uses credit card on eBay so I could have this new feature on my account and it would do no good!
PayPal told me the reason they have to do this is because of the increase fees in fraud protection. I think they are trying to hurt eBay sellers.
Just thought I would pass this along for a potential story. I don't know how many people this affects but I believe it to be a lot.
I enjoy your stories and read them every day.
Here is the letter the seller received from PayPal earlier this month:
Beginning on August 22, 2016 we are simplifying the prices we charge for PayPal transactions and will be removing tiered merchant rates on US domestic and international purchase payments. If you are currently receiving a merchant volume discount, this will result in an increase to your rate. Your new rate will be the standard rate of 2.9% + $0.30 USD for domestic transactions and 3.9% + fixed fee* for international transactions. Please note that your current card-processing rates on PayPal Payments Pro and Virtual Terminal** will not change at this time.
Lastly, if your account qualifies as a 501(c)3 nonprofit, please refer to this link to determine if you are eligible for our discounted nonprofit rate.
If you have any questions, or want to understand these changes in more detail, please give us a call at (888) 221-1161 or visit our Help Center. This email is for your information only. The changes described above will apply automatically, there is nothing you need to do.
We value our partnership with you, and are committed to delivering value to you in many forms. PayPal Seller Protection and our fraud detection capabilities help shield you from losses so that you can sell with more confidence. We help you drive improved customer conversions and order value by offering One Touch(TM) and PayPal Credit. PayPal Working Capital lets you easily apply for loans that can help grow your business. And to drive customer base growth, you have access to sales tools for cross border selling, making it easier to sell internationally.
Thank you for being a PayPal customer. We appreciate your business.
* Section 8.4(d) of the PayPal User Agreement
** Rates where an American Express Card is used are also not changing
Note from the Editor:
The rate change the reader is referring to was actually announced last year - PayPal has just recently sent the email notification to the final phase of customers. You can see the EcommerceBytes Newsflash story
from last summer.
And here's what sellers had to say about the price change last year