Fees applying and not applying depends on the circumstances of the money used for payment, so in sometimes there are no fees to be paid.
Payment owed and payment for goods are two different circumstances, e.g. payment owed is like wire transfer. There is no protection and it is purely on trust between those involved, you are giving money to someone with nothing expected in return. PayPal is only the agent taking your money and giving it to the recipient.
Payment for goods comes with some rules and protection. PayPal is acting as an agent, but also offers a level of protection to the buyer if the goods don't arrive or are not as described.
For the service and protection PayPal take a fee.
The point of view is that the seller is using PayPal as a payment processing service, in the same way that a shop uses a payment processing service usually through their business bank account to handle debit cards, credit cards etc. This costs companies money to use these services.
I sometimes pay fees but do so on a case by case basis. You would not go onto an online shop, choose goods and when paying change the amount to add on PayPal fees or credit card handling etc.
You do however see shops saying 'no card sales under £5' or card payments add x%, and also variations between debit & credit cards.
Back in the day it was also a matter of which credit cards were accepted. This related to the payment handling the shop had, American Express was always a dodgy one as they charged shops more for their handling so often no-one would take them.
When buying from an individual the advice is to ensure fees are covered and to not use 'payment owed'
But what should occur is the pricing to reflect that in the first case.
It does make a difference if paying cash face to face or paying electronicaly over the internet and then posting the goods.
But if it is just an online sale then it makes things look cheaper when the price is shown but afterwards fees & post have to be added on. It also makes sales quicker and easier if the seller thinks about this up front, it's a bit frustrating if something has been on the forum for sale but then buyers have to wait for the seller to then think about weighing the goods and finding out postage costs afterwards.
Note that if you go for adding on a percentage to cover fees you need to take into account that fees will then be taken from the percentage you added on.
e.g. £100 sent to me would have 3.4% charged as fees (£3.40), so I would receive £96.60
If £103.40 was sent to me then 3.4% would be charged, (£3.5156 or £3.52) so PayPal make and extra 12p and I only get £99.88
To receive £100 I have to consider it as 96.6%, so the payer has to send £103.52 to cover 3.% fees
Sending money:
There are two options to choose from when sending money through PayPal:
- Send Money to family or friends:
It's free when you use your PayPal balance or your bank account. A small charge applies to debit or credit card funded payments, which either the sender or recipient can pay. The total fee will be displayed below the payment type description when you make an entry in the amount box. For more information, click Fees at the bottom of any PayPal page.
- Paying for goods or services:
It’s free to send money to pay for purchases using PayPal.
Receiving money:
The fees for receiving money depend on the situation:
- Receiving a domestic personal payment (e.g. a gift from family) is free if the sender uses their PayPal balance or their bank as the payment method. If they use a credit or debit card there will be a small fee. The sender can decide to pay this or pass it on to the recipient.
- If you're receiving a business payment (e.g. when selling items on eBay) then you'll be charged a fee. For more information, click Fees at the bottom of any PayPal page.
Adding or withdrawing money:
We do not charge for adding money to your PayPal account. The same applies for withdrawing money from your PayPal account to your UK bank account. However, bank fees may apply. Please contact your bank for details.
Note: If your attempt to withdraw money fails, PayPal may charge a fee of 50p in the UK to cover the costs of the returned bank withdrawal.
Refunds:
If you issue a refund within 60 days of receiving a payment by using the 'Issue Refund' link we'll reimburse you the variable part of the fee you were charged, but we'll keep the fixed part of the fee.
Currency Conversion:
PayPal charges an exchange rate for exchanging money from one currency to another.
If your transaction requires a currency conversion, we'll use a retail exchange rate. The retail exchange rate is our wholesale cost of foreign currency (determined by an outside financial institution) plus a currency conversion fee. This fee depends on the currency you are converting into.
Cross Border:
When you receive a payment from a customer in a different country you will be charged a ‘Cross-Border Fee’ in addition to the normal receiving fee.
This fee is to cover the cost of the extra processing required for payments between different countries or regions.
