PayPal

At its basic level, PayPal makes it possible to send and receive money via email.  So it goes without saying that to use PayPal, you require an email address.

The standard Gmail address whatever@gmail.com is more than adequate to use with Paypal; however, creators should have a custom domain. For example, @yourdomain.com. This, in turn, will allow you to create a branded email address like money@yourdomain.com,  growing your audience’s confidence in your brand.

In my post “Domain and Links,” I discuss the significance of a domain.

How PayPal works

     Sender

1. Paypal is like a virtual online bank account (Not legally a Bank).
2. Your email address is your username-id.
3. Within Paypal, you connect a funding source your actual bank or credit/debit card to your Paypal account.
4. Fund your account with one of your funding sources.
5. Sent funds to another PayPal user’s or online retailer’s registered email address.

     Receiver

1. PayPal is like a virtual online bank account (Not legally a Bank).
2. Your email address is your username-id.
3. Connect your actual bank account to your PayPal account.
4. Another user sends funds to your account using your registered PayPal email address. Which can be a friend, client, or customer.
5. Use the available at any marketplace, platform, or online store that supports PayPal.
6. Withdraw funds into your bank account.

Being a Sender or Receiver is the basics of PayPal’s two-sided payment platform. For creators, this two-sided payment platform is most beneficial. Creators can be paid by platforms and marketplaces, and they can invoice clients for freelance work through PayPal as Payoneer does. Unlike Payoneer, You can accept payments on your website. With 300 million users worldwide. PayPal gives creators access to a global payment market.

Currencies

Available in 200 countries and supports 25 currencies. However, like other services, the available currencies available to you will depend on your country of residence’s laws and regulations.

Multiple currencies can be held. However, bank routing numbers are not provided. The only way a user can pay into your account is by using your PayPal user ID. Any currency other than the default one paid into your account will be converted into the default currency. If you have opened a currency account in the incoming currency, no conversion is needed by you.

PayPal Fees

Internal Payment

Making payments to another PayPal user is pretty straightforward.  All you need is the user’s PayPal email address. If the user receiving payment has a currency account opened in the currency being sent, no fees will be charged for the transaction. If not, a currency conversion fee will be charged to the user initiating the transaction.

PayPal payments can offer immense convenience; however, this convenience comes at a cost multiple fees can be applied to one transaction.

Selling items on a website can have up to three different types of fees attached before the funds are transferred to your bank account.

1. The initial e-commerce transaction fees are 1.2% to 2.9% plus a fixed fee. For the U.K., the fixed rate would be 0.30 GBP, 0.30 USD, and so on, depending on your country of residence.
2. Cross-border fees for transactions where the buyer and seller are in two different countries. Fees of 0.5% to 2% are applied, and in some cases, depending on the currency received, a fixed fee is applied.
3. Currency conversion fees This is where an item is sold in one currency but paid for in a different currency. For example, an item is sold in British Pounds (£). but paid for in US Dollars ($). A currency conversion would be needed to convert US Dollars into British Pounds.

Withdrawing Money

You are allowed free withdrawals to a local bank account in your country’s local currency. For me in the United Kingdom, that means I can only withdraw GBP (£) from my bank account.

Withdrawals in a different currency to an account in a different country may be possible; however, cross-border charges may be applied.

Another option other than withdrawing is to buy products or pay invoices with your balance. This can save you money if you have multiple currencies held within account. There will be no need to convert currencies into your local currency if you are trading internationally. This will save you money on currency conversion charges.

PayPal Business Debit Mastercard

Another way to withdraw money from your account is with the account business debit card. The card operates like a standard debit card, however, it gives you access to your account balance. If a bill needs to be paid and the business or individual does not have a PayPal account, the business or individual can be paid with the debit card. The card can be used anywhere, offline or online, where Mastercard is accepted.

Financing Services: (For you or your customers)

Your customers have the option to use PayPal has products that benefit online stores  If you qualify, PayPal can offer credit facilities to a creator’s customers.

1. Pay in 3

This is a credit facility that allows payment for a product or service to be split into three payments over three months, interest-free.

1. PayPal Credit

This is a credit facility that acts like a credit card without the card. If your customer has applied for credit. At checkout, customers will have the option to pay using PayPal credit.

PayPal Credit offers a 4-month interest-free period when the checkout total is more than £100 or equivalent currency. However, If the balance has not been cleared after 4 months, then interest is applied to it.

These credit facilities can help if a creator creates a product or service with a high price tag.

Card Reader

If you are in a position where you need to sell person-to-person, PayPal offers a card reader point-of-sale (POS) service.  Whether you are selling at a retail store, a trade market, or selling merchandise and artwork, PayPal (POS) service allows you to process:

1. Mastercard
2. Visa
3. American Express
4. Apple Pay
5. Google Pay
6. Samsung Pay

PayPal’s Zettle card reader supports contactless and chip-and-pin payments.

Card Reader: Pricing and Fees

Depending on requirements, the card reader’s model pricing ranges from £30 to £600, or the currency equivalent. With transactions charged at 1.75% of the transaction amount.

PayPal is an all-around solution for the creator-entrepreneur. While its fees may be higher than other solutions, the convenience that PayPal brings is hard to match.