No one likes paying fees to receive money they have rightfully earned, but that isn’t something you can change, right? There’s not much you can do to avoid them.
Why do online payment systems rob us of our hard-earned income when we accept payments virtually? If you’re not paying attention, the fees associated with virtual payments can add up quickly.
I started looking for other options after giving up my income because of the fees. I decided to research the options thoroughly before making a decision, so I could be sure I was choosing the best option for my business.
6 Ways to Avoid PayPal Fees
Here are some proven ways to decrease or eliminate PayPal transaction fees:
- Include any Fees in Your Invoice
- ACH Bank Transfers & e-checks
- Direct Deposit
- Online Wire Transfers
- Get PayPal Business Discounts
- Apply for Lower Merchant Fees
1. Include the processing fee in your invoice
If you can get your clients to pay the fees, you will be able to avoid the fees. It’s easier for customers to understand the total cost when the PayPal fees are included in the prices. Small percentage business fees can be included on client invoices. This will allow you to securely collect payments from your clients.
PayPal charges anywhere from 2%–4% to accept payments from clients, so this could save you a lot of money. Since this is the most widely accepted form of online payment, most clients request it. Businesses need to be prepared to accept this form in order to remain competitive.
It is okay to include a standard percentage fee on invoices. It’s important to consider these fees when setting prices for your services because they can help you recover the cost of doing business.
2. Accept ACH Bank Transfers and e-checks
If you use a traditional invoicing software like QuickBooks Online, you can accept ACH bank transfers and e-checks for no fee at all!
ACH transfers and e-checks are completely free for service providers who send invoices and accept payments online. Payments can be processed quickly and securely with the use of ACH transfers and e-checks.
It’s completely free to encourage clients and customers to pay with a bank transfer when you accept credit cards. Businesses can get paid quicker with bank transfers that move funds quickly between accounts.
3. Request Direct Deposit as a Preferred Method
Direct deposit is the best way to avoid paying invoice fees. Direct deposit is the most cost-effective way to receive payments, so take advantage of it whenever possible. Not only will the funds be deposited into your account much faster than a 2-day transfer request from PayPal, but you will save money on transaction fees.
Here are some of the best direct deposit services to use as a freelancer:
Dwolla
Dwolla makes it easy to transfer funds from one person to another and works with many of the best accounting services. The best part? The fee is only $0.25 no matter how big or small the transaction is. It’s a cost-effective option for businesses of all sizes. There is no fee if the transaction is under $10 This is great news for people who make small transactions.
WePay
WePay, a Chase Company has an online payment portal. The payment portal is designed to make transactions quicker and easier. It works with many invoicing services. It’s easy to use and set up, so you can take care of your invoices quickly. All major credit cards are accepted by WePay. Businesses of all sizes can use WePay’s secure payment processing solution. Direct deposit payment processing has a 1% fee plus a small amount of money per transaction. Direct deposit is an incredibly cost-effective way to get paid, making it an attractive option for businesses of all sizes.
This is a big savings over the standard fee. It’s no wonder that so many businesses are using alternative payment services.
4. Wire Transfers Online
If you work with international clients, you might want to set up wire transfers to receive payments. For the most cost-effective and efficient payments, it’s important to research the best options for international money transfer services. Currency conversion rates and other fees may be required to access your money. Before making any international payments, it is best to research payment methods and fees.
It costs your clients $20-40 per international wire transfer so it is a bit expensive. It’s important to consider the cost and convenience of using this payment method. It can take several days to process the payment into your bank account. It is advisable to keep track of the status of the payment to ensure that it has been processed correctly.
TransferWise can be used to avoid the expense of a wire transfer. TransferWise can be used to transfer money around the world. They don’t hike up the cost for a currency conversion like most banks do, and they are fully transparent with their fees. You can be sure that you are getting the best exchange rate.
Wise, formerly TransferWise, is cheaper and faster than traditional wire transfers!
5. Get PayPal Business Discounts
Several accounting programs have a deal with PayPal that can save you a lot of money. Businesses that usePayPal frequently can take advantage of the accounting programs to reduce costs and streamline their financial operations.
If you are a loyal customer of FreshBooks Invoicing, you will get access to the PayPal Business Payments option. It is possible to save time and money by using this feature. You only have to pay $0.50 for bank transfer payments from clients. Bank transfer can be used to make payments to clients.
The funds must be taken out of the client’s bank account in order for this to work. The funds will be deposited into the business’s account once the transfer has been completed.
The process is 3-4 business days longer than using a credit card. It can be a great way to make sure you are paid on time. In most cases, the added savings are worth it. It’s an easy way to save money.
Who doesn’t want to keep more of their hard-earned money? Taking advantage of tax deductions is a great way to save money.
Here’s How it Works:
Start by Creating a new invoice
You can either create a new invoice for a client or use a template from a previous invoice. The duplicate button can be used to quickly create a copy of an existing invoice. If you look under the Online Payment Options section on the right-hand side of your invoice, you will see the different payment options you currently offer. You can easily add or remove payment options from your online account.
Choose the PayPal Business Payment Option
Be sure to check the “business” PayPal Business Payment box under the PayPal tab when creating an invoice, and you’ll only be charged $0.50 per transaction — no matter how large your invoice.
Here’s How it Works in FreshBooks
The process looks like this: New invoice, Accept Payments Online, check boxes for different payment options, and the PayPal Business Payments option is under the PayPal tab. Customers can securely make their payment after selecting the PayPal Business Payments option.
Only a direct transfer from a bank account can you use it with credit cards. It may not be possible to use this payment method if you don’t have a direct transfer from your bank account. Most of my clients use this option and I have never had an issue with it. This is a great way to make sure my clients are getting the best value.
FreshBooks can be used to clock your time with client projects, bill for expenses and services, and then receive payments each month. It’s an easy way to keep track of your finances.
FreshBooks Classic charges a small monthly fee to use their services, although they do have a free service with less features. The monthly fee is a small price to pay for the time and money you will save by using FreshBooks Classic’s features. How much money you could save using this invoicing hack is not as important as the small change. You can reduce the amount of money you spend on transaction fees if you take advantage of this invoicing hack.
This does not include a credit payment option. If you’re looking for a credit payment option, look elsewhere. Your clients have to be willing to pay via this method in order to receive the $0.50 per invoice paid option. Your clients won’t be eligible for the $0.50 per invoice paid option if they don’t pay via this method.
It can be worth the savings and most clients don’t mind using it. It’s important to note that this payment process requires a bit of extra effort on the client’s part, but the end result may be worth it.
This is only available in the U.S. International customers are not able to take advantage of this offer. If your clients pay you using this method, it could save you hundreds of dollars a year. Fees associated with accepting foreign currency payments can add up quickly.
6. Apply for Lower Merchant Fees with PayPal
There is a hack that you can use to lower your payments. You can apply for lower merchant transaction fees if your account processes more than $3,000 per month. If you are eligible, make sure to take advantage of the special discounts offered by PayPal.
If you qualify, this fee could be 2.5% or even 2%. The lower fees could save you money in the long run.
Follow the steps to apply for lower merchant fees. If you need additional assistance with the process, be sure to contact the customer service of PayPal.
- Log into your PayPal account
- Access the Merchant Rate Application form
- Fill in your details on the short form
- Check the box to indicate you have read the User Agreement
- Click “Submit”
You will be able to find out if your account is approved for a lower rate. You can take advantage of the cost-saving benefits right away if you are approved for the lower percentage rate.
Remember, PayPal fees are Tax-Deductible
Transaction fees are only part of doing business online. Transaction fees can add up over time, so it’s important to research and compare different payment processing options to find the one that works best for your business. The good news is that the fees are tax deductible. It’s true!
You can calculate the fees at the end of the year. Schedule C contains the total amount of fees on your self-employed tax return. You should report any estimated taxes you have paid on your tax return.
It is possible to reduce your tax bill at the end of the year by paying PayPal fees. You can make the most of this tax advantage by taking the time to track your fees throughout the year.
These tips can help you decrease your PayPal fees. These tips can help you save money and make your business more profitable.
It will only take a few minutes to apply these money-saving tips so you cankeep more of your hard-earned money!
