Increased fees, as the progressive PayPal rate replaces the PayPal merchant rate

As of August 19, 2019, the PayPal merchant rate no longer applies. Instead of the PayPal merchant rate, a new lower PayPal standard rate of 2.9% plus a fixed 30p fee applies to each domestic trade transaction payment received by merchants in UK, Jersey, Guernsey, Island from Man or Gibraltar. There is also news of a new PayPal tiered rate for major merchants.

More PayPal merchant rate, lower standard rate, higher fixed fee

The big news is that under the PayPal Tiered Rate everyone will pay 30p per transaction (or 25p for very high payment volumes) instead of the current 20p under the PayPal Merchant Rate, but for those who weren’t. previously on PayPal Merchant Rate the fee percentage will drop from 3.4% to 2.9%.

Almost everyone will pay more bar the very small and very massive merchants. You’ll want to read and understand the impact of fee changes, as they could determine which products may no longer be profitable to sell. Even with the new lower PayPal standard rate, the 10p increase represents a punitive increase in fees for low value products.

New PayPal tiered rate

Some users were told of a new PayPal tiered rate in August that is due to go into effect on August 16, 2019. We don’t know how you’re prompted, if you’re not (or if your payment volumes are lower. at £ 20,000 per month), it looks like the standard PayPal rate and fixed per transaction fee will apply to you.

While users with monthly payment volumes of up to £ 6,000 or between £ 15,000 and £ 20,000 will not see a percentage increase in fees, everyone with payment volumes outside of these ranges will see it. Users with very low payment volumes (less than £ 1,500 per month) will see a fee percentage drop from 3.4% to 2.9%.

There is good news, for those with a monthly payment volume over £ 75,000 there are two new tiers with discounts of 1.4% up to £ 200,000 and 1.3% if your payment volume is monthly is over £ 200,000.

While the increase in percentage fees is not welcome, for those with low average selling prices, the biggest impact will be the increase in fixed fees from 20p to 30p. It hit those with very low selling prices the hardest. Those with massive monthly payment volumes and higher average selling prices may be better off because of the new discount levels.

PayPal Merchant Rates and PayPal Tiered Rates Comparison Table

Old PayPal merchant rate

New PayPal tiered rate

Modification of fees

Old level

Old rate

New level

New rate

£ 1,500
3.4% + 20p Up to £ 20,000 2.9% + fixed fee (£ 0.30) -0.5% More 10p
£ 1,500.01 – £ 6,000.00 2.9% + 20p More 10p
£ 6,000.01 – £ 15,000.00 2.4% + 20p + 0.5% Plus 10p
£ 15,000.01 – £ 55,000.00 1.9% + 20p + 1.0% Plus 10p
£ 20,000.01 – £ 75,000.00 1.9% + fixed fee (£ 0.30) More 10p
Over £ 55,000 Price on the app compared to previously negotiated rates and Plus 10p or Plus 5p
£ 75,000.01 – £ 200,000.00 1.4% + fixed fee (£ 0.30)
£ 200,000.01 or more 1.3% + fixed fee (£ 0.25)

Other PayPal changes

PayPal announced a ton of Policy updates June 14 although we haven’t seen any mention of the new PayPal online tiered pricing yet.

Other changes include changes to payment fees for cross-border business transactions and changes to PayPal Here fees.

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