Unless you’ve been hiding under a rock these last few months or you are completely new to eBay then you will know that eBay Australia requires all sellers to offer PayPal as a payment option.
This policy requires you to sign up for a PayPal account if you wish to sell on eBay.
3 Types of PayPal accounts: which to choose?
- Personal Account: suitable for individuals that are mainly buyers and may only sell an item now and again.
- Premier Account: suitable for individuals that are selling regularly on eBay.
- Business Account: suitable for registered businesses that are selling regularly on eBay.
It is important to note that there is a marked difference in the fees charged between a Personal and a Premier/Business Account.
There is no difference in the fees charged between a Premier and a Business Account which is why you will see them referred to jointly as a Premier/Business Account.
For all accounts it is free to join, free to send money and free to withdraw funds over $150.00 AUD.
The difference between a Personal and a Premier/Business Account lies in the fees charged for accepting payments.
A Personal Account allows you to accept unlimited payments, free of charge, if funded by the payees:
- PayPal Balance,
- PayPal Instant Bank Transfer, or
- PayPal eCheque
However the sting comes when a payee funds his/her purchase with a credit or debit card. Holders of Personal accounts may accept a limit of 6 credit/debit card funded transactions per year:
- charged at a rate of 3.4% of the total payment plus $0.30 for every domestic payment.
- If your buyer is from overseas you are charged 4.4% plus an additional flat fee which depends on the currency the original payment is made with (please check the PayPal Fee Schedule for rates).
The thing is that you have absolutely no control over how your buyer funds their payment and you are not able to specify that you will only accept certain types of funded payments. This is an eBay policy - not a PayPal policy mind you.
What happens when you reach the limit of 6 payments funded by a credit/debit card?
Well as a PayPal user you have the ability to refuse payments funded by this source. You will receive an email from PayPal and you will be asked to either refuse the payment or upgrade to a Premier or Business Account (from which you can accept unlimited credit/debit card funded payments).
However, as an eBay seller, you must abide by eBay’s rules which specify that you cannot refuse a payment. So, even though PayPal gives you the right to refuse a payment, eBay does not. When you reach your limit with a Personal Account you will need to upgrade to a Premier/Business Account and accept the payment, there is no way around this.
The good thing about a Premier/Businss Account is that the fees for credit/debit card funded payments are significantly lower than with a Personal Account:
- domestic payments: 1.1% to 2.4% plus $0.30 AUD (depending on your sales volume - the rate lowers the more you sell
- international payments: 2.1% to 3.4% plus the applicable flat rate currency fee
The not-so-good thing is that now you are also charged the same rates for all payments regardless of how they are funded. Unfortunately, as the policy now stands you do not have the ability to control and try to limit your costs. You may start off with a Personal Account but once you reach that 6th buyer who wants to fund their PayPal purchase with their credit/debit card then you will be forced to upgrade to a Premier or Business Account.
Check the PayPal Fee Schedule.
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