Paypal Micropayments account - pay lower fees!

As most online sellers know, charges for a normal Paypal macropayments account are 3.4% + 20p. What Paypal doesn’t shout from the rooftops, and which I only found out when I registered as a designer on Ravelry to sell my felted bag patterns, is that they also offer a micropayments option for sellers of low-value items. The charges for this are 5% + 5p. For example, if an item (including p&p) sells for £3, this is what you would pay in fees:

Macropayments: £3 x 3.4% = 10p, plus 20p = 30p

Micropayments: £3 x 5% = 15p + 5p = 20p

A big difference, especially when you work out what you might sell over a year!

The breakeven point is somewhere between £9 and £10, so if most of your items (including p&p) sell for less than £10, it might be worth converting your existing premier or business account from macro to micro by following the link at the foot of this post. The lower your prices, the more money you'll save.

Alternatively, you could open a second Paypal account. Paypal allows each person to hold two accounts, one macropayment and one micropayment (very useful for eBay sellers with a mix of high and low prices) but it's not possible to link them both to the same bank account, sadly.

To switch your current Paypal account to micropayments, follow the link below, click 'Signup', choose your country from the drop-down menu, and take it from there. You should receive confirmation of the switch within 48 hours. I say ‘should’ because I didn’t – it was only when I checked my Paypal account a couple of days later that I noticed I was being charged at the lower rate!

If at any time your circumstances change and a micropayments account is no longer viable, you can simply switch back. :-)

https://micropayments.paypal-labs.com/