How to Stop Paying High PayPal Fees for Freelance Work
As a freelancer you are likely used to dealing with high PayPal fees if that is your regular payment method. However, you may not be aware that there actually is a means of avoiding the annoying PayPal fees that are potentially losing you hundreds if not thousands of dollars every year. This fee loophole comes in the form of PayPal Business Payments. You can select this option when invoicing your clients through Harvest or Freshbook among other invoice programs. With this service you will only be charged a flat rate of 50 cents for every transaction, instead of PayPal’s usual 2 to 3 percent. Here are a few things to know about the PayPal Business Payment feature.
How PayPal Business Payments Work
PayPal Business Payments is a pilot system that started in 2011, and can only be used for invoices using U.S. currency. As said earlier, PayPal Business Payments cost 50 cents per transaction. This program enables you to collect online payments for a simple flat fee, and not as a percentage. It allows clients to pay using their PayPal balance from their own account or eCheck. Clients cannot use a credit card if they’re using the Business Payment program. Keep in mind that if you want to have access to this PayPal feature then you’ll need to send an invoice. This means you can’t just let your client know how much money they owe you. Instead, the client must be able to click a Pay Now button through Harvest, Freshbook or any other invoicing system that lets you use PayPal Business Payments.
Using an Invoice System
If you don’t use Harvest of Freshbook then it is highly recommended that you sign up for an account. Harvest doesn’t charge you a single cent for invoicing up to 4 clients, however any more and you’ll be charged $12 per month. Freshbook on the other hand also offers people a free plan, however only for one client. Its lowest priced plan is $19.95 a month, which allows you to manage as many as 25 clients. Freshbook tends to be more popular with freelance writers, as it has many more features. However, if you want a simplistic design and a company with great customer support then stick with Harvest.
Step-By-Step on Using PayPal Business Payment
Create a PayPal Standard account if you don’t already have on. Once this is done, log in to your invoice account and head to your settings. Click “Online Payments” and select the PayPal option and enter in your PayPal information. After this, select the option to collect payment using PayPal Business Payments for a $0.50 flat fee. Once this is complete your clients will be given the option to use PayPal to pay, and they will be prompted to sign into PayPal in order to pay the invoice using the PayPal Business Payments.
Business Payment Restrictions
In order to use PayPal Business Payments, your clients must have an active PayPal account that is linked to their bank account. Additionally, even if you reside in the United States, your clients can’t send payments from anywhere outside the states. Keep in mind that once your client has sent an invoice it may take anywhere from three to five days for the payment to be sent and credited to your account. This is due to the fact that Business Payments use an eCheck process.
If You’re Outside the United States
If you’re unable to use the PayPal Business Payments feature due to the fact that you reside outside the United States then consider calculating the fee that you will receive from PayPal using an online PayPal fee calculator and asking the client to cover the cost.
Business Payment Limits
If you are a freelance writer that makes a substantial amount of money then you may run into some trouble, as there is a transaction amount limit placed on using PayPal Business Payments. This limit is $10,000 if both you and your client’s account are verified and less than that if one of you is not. If your client tries to send more than the allowed amount they will see an error stating that the invoice exceeds the PayPal transaction limits.
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