Sellers from the Philippines using Paypal will have to pay higher fees starting September 10, 2013. This paves the way for an increase in fees affecting commercial payments.
Honestly, we find the revised fees as shown in Paypal’s latest Policy Update to be a bit confusing. To make it easier for PinoyMoneyTalk readers to understand, we’ll try to simplify the table and explain how it will impact Paypal users.
First things first: in cases of “commercial payments”, Paypal fees are charged only to sellers or merchants.
That means buyers using Paypal for payment will not be charged any fees. PayPal sellers are the ones charged a fee every time a transaction is completed.
“Personal payments” are charged separately. Scroll down to the latter section of this article for details on “personal payments”.
Paypal Fees in the Philippines — Regular Commercial Transactions
First, let’s discuss Paypal fees for regular commercial transactions. Below is a table summarizing the revised fees charged to Philippine-based sellers.
Domestic payments are payments from users within the same country, in this case, the Philippines.
International payments, meanwhile, are payments from users in another country.
Example of Paypal fees charged to Different Transactions
If you are a Philippine-based merchant selling a product (outside eBay) worth P1,000, you will be charged 3.9% + PHP15.00 or total fees amounting to PHP54.00 — if the buyer is from the Philippines.
Thus, the net amount you will receive from the sale of a P1,000 product is PHP946.00.
Here are the fees charged to other cases of commercial transactions:
- 3.4% + PHP15.00 for sellers on eBay (eBay owns Paypal, that’s why rates are lower) if buyers are from the Philippines;
- 4.4% + PHP15.00 if payments are from abroad (international payments).
If the transaction is done on eBay and the buyer is from another country, the international eBay payment fee of 3.9% + PHP15.00 applies.
Here’s an example of an International payment on the eBay website:
A Philippine-based merchant selling a product on eBay worth P2,000 is charged a Paypal fee of 3.9%+PHP15.00 or a total of PHP93.00 — if the buyer is from abroad (outside the Philippines).
Thus, the net amount you will receive from the sale is PHP1,907.00.
Discounted Merchant Rates for Qualified Sellers
Paypal offers discounted rates for qualified merchants. These “Merchant Rates” apply to members in good standing (whose accounts are not currently under investigation) and who received more than PHP150,000.00 in PayPal payments in the previous calendar month.
Qualified users have to apply first in order to be granted the discounted “Merchant Rates”.
Here is the discounted fees table applied to qualified merchants.
The increase in Paypal fees also becomes effective for users in other Asian countries such as China, Hong Kong, India, Indonesia, Malaysia, Singapore, Taiwan, Thailand and Vietnam.
The rates are the same as in the tables above. The only difference is the fixed fee charged which varies per country (this is PHP15.00 in the Philippines).
Definition of “Commercial Payments”
The new rates above affect online commercial payments. According to Paypal, “commercial payments” include the following:
- Payment for the sale of goods or services;
- Payment received after the Seller has used the “Request Payment” tab on the PayPal website; or
- Payment sent to, or received by, a business or other commercial or non-profit entity.
Paypal Fees for Personal Payments
Personal payments, on the other hand, are charged 3.4% + PHP15.00 in the Philippines.
Personal payments are payments made mainly to individuals as opposed to businesses, for example, splitting the cost of a birthday gift or paying back a friend for lunch.
The fee may be paid either by the sender or the recipient of the Personal Payment. In most instances, the sender will determine who pays the fee.
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