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US Business PayPal account for a California LLC, with owner living in California. Software sold online, 95% to UK customers so the billing is done in GBP, so I have a GBP balance and a USD balance (usually zero), plus an "estimated USD value".
When I withdraw money to my US business bank account it naturally undergoes a currency conversion. That is, the product is sold and charged in GBP. The actual currency conversion happens at time of withdrawal, not time of sale. All well and good - for me.
Now, I also have contractors in the UK so would really like to pay them without anybody incurring a double whammy: a currency conversion from USD back to GBP - or to minimise any other fees.
Currently I do this:
PayPal (US) business -> US bank account -> XE.com -> my UK bank account -> contractors' bank accounts
But would any of these be cheaper AND still within PayPal's Ts&Cs and the relevant laws:
1. PayPal (US) business -> PayPal (UK) personal -> UK bank account -> contractors' bank accounts
2. PayPal (US) business -> PayPal (UK) personal -> contractors' PayPal (UK) accounts
3. PayPal (US) business -> Contractors' PayPal (UK) accounts (I think this is a 3% fee; deducted from the amount they receive if I select "pay for goods or services")
4. PayPal (US) business -> my UK bank account (does not seem to be possible)
Or any others?
Trying to do everything above board while cutting costs for my small business and my contractors. They're responsible for their taxes, as am I with mine.
A few years ago I did research a merchant account with Wells Fargo (my bank) but they wanted my domain name to be .com instead of .co.uk so they could control it. Backed away slowly while smiling. The fees weren't any better than PayPal at my sales volume anyway.
You are going to have to accept the fact that there are fees for PayPal to send money for you in business. Someone has to pay them. You can split it down the middle: pay with your GBPs from your PP GBP balance when your contractors invoice you in GBP and include extra for half the fees to send as goods and services.
Thanks but the title and the body both say that I want to minimise the fees. I'm well aware there will be fees, as I clearly state.
The problem is even after reading through the US and the UK PayPal User Agreements (and what applies when?) it's still not entirely obvious to me which fees would be charged where - like 3% for a currency conversion fee, then a mention of 2.5% in the same paragraph. I did one payment already PP->PP and the end user got charged a fee that wasn't obvious to me.
Since March 29th,conversion fee has gone from 2 1/2% to 3%.
Since you are being paid in GBP and keep a GBP balance,so why cant you use it to pay your British contractors?
then there is no conversion fee.
as for whether it should be friend and family or goods and services,use your own good judgment.
no one works for free,or lose money,while you minimise,some one is earning less.
Paypal is country specific,if you open an account based in UK,your local currency is GBP,link it with a UK bank as well as US bank(US expatriates are allowed to do so).
The GBP proceeds will be transferred to your UK bank account,from that account,you do onlinebanking outside Paypal to paqy your vendors,then your vendors avoid Paypal fee.
Using Paypal to pay under friend and family will arouse Paypal suspicion if you do it regularly.
key is how can you open a UK bank account and what happens if you always access the UK pAYPAL account from where you are -good old USA.
just a suggestion,no guarantee if it will work
Sumiko - thanks. It seems that what I already did (PayPal US -> contractors' PayPal UK) is the best as it's one that doesn't involve forex. My concern is what you said about friends and family: I want to ensure I'm well within PayPal's Ts&Cs, and laws of course. I can't afford PP suspending my account for any suspicions, however unfounded.
VPNs can get around website access issues but it is more hassle.
Question arised because some of the contractors are moaning about the fees - not that they're much in all honesty, they're probably more annoyed about the principle of it, ie PayPal's business model which is entirely up to them. Play by their rules or go somewhere else. Wells Fargo have shown that not all alternatives are sensible, so we'll stick to PP and their rules.
your contractors do not like to pay the Paypal fee of 30 cents transaction and 3.9% or 2.9% discount rate ?
They are accepting payments for goods and services surrendered via Paypal, Paypal needs $$ to keep the site up and keep the place running.
my suggestion would skip Paypal if you transfer your GBP from your UK paypal account to your UK bank account and you go to your bank website and do bank to bank transfer to THEIR BANK ACCOUNT.
DONT TELL ME THEY DONT HAVE BANK ACCOUNT IN UK ?
anyone who keeps sending payment via friend and family on a regular basis risk being questioned - money laundering or asked to start using goods and services.
you can also do western union,intl money order or transfer a lump sum to someone you trusted in UK and ask him or her to write checks.
Hah, well I never suggested the contractors' moans were justified, just doing due diligence to minimise the fees to show them that they're getting the best possible rate.
I don't have a UK PayPal account and looking at the Ts&Cs that is only allowed if I maintain a residence there (I don't). Another option would be a UK subsidiary company but I know from painful experience that is going to be much more effort than save any money.
WU/money orders etc will result in a double currency conversion - once when PayPal convert GBP to USD, another when sending USD to the UK by any means.
They will have to suffer the roughly 3%.
yes,it is not a good idea to open a UK PAYPAL account if you dont live there,right now there is this lady posting on this forum,she has an Aussie account but she is in Malaysia,Paypal locked up her acount and need her t o verify her aussie address which she does not have.
Last year,an Irish lady goes to London often and conduct business there and have UK bank account,one day Paypal ask for her UK ID which she does not have,irish dirver license ,irish passport,Irish electrc bills,Paypal would not accept/
better let your contractors pay that 2.9-3.9%if you use your Paypal GBP fund,it is 2.9%,if you use your US debit or credit card,it is 3.9%