Subsription Fees

[ManchesterFo]

I'm really confused about fees for subscriptions...

The website says Paypal charges 20p + 3.4% for a transaction. Does that mean each payment in a subscription charged 20p? Or is the 20p charge a one off payment for setting up the subscription?

This would mean changing our annual subscriptions to monthly would mean we get a lot less money!

[kernowlass]

Not sure what you are talking about when you say subscription.

You pay 3.4% +20p on every payment you receive from a buyer as paypals fee for allowing you to accept card funded payments with paypal.

[ManchesterFo]

Thanks for your help. I mean the recurring payment option... if it's a monthly recurring payment, is the 20p charge incurred once when you set up the payment, or is 20p deducted from each monthly payment?

[PayPal_Siobhán]

Hi there ManchesterFo,

The standard fee is charged for every individual payment you receive.

Here’s how to view fees applied to any of your transactions:

1. Go to www.paypal.co.uk and log in to your account.
2. Click ‘History’ near the top of the page.
3. Find the transaction you want to look at and click ‘Details.’

We do have Merchant rates if you have a PayPal Business or PayPal Premier account. You must also have received at least £1,500 GBP in payments in your PayPal account within the last month.

Here’s how to apply for the Merchant Rate:

1. Go to www.paypal.co.uk and log in to your account.
2. Click ‘Fees’ at the bottom of the page.
3. Click ‘1.4% to 3.4% + £0.20 GBP’ under ‘Get paid.’
4. Click 'Are you eligible for lower rates?' near the bottom of the page.
5. Click ‘Apply now’ and complete the Merchant Rate application.
6. Read the User Agreement, and then check the box to indicate that you’ve read and accept the agreement.
7. Click ‘Submit.’

If you’re approved for the Merchant Rate, we automatically adjust your fees at the beginning of each month. The adjustment is based on your payment volume for the previous month. 

Siobhán

[soulbriski]

Hi Siobhán

I've just picked this thread up after being confused by the same thing that confused ManchesterFo.

Is it still the case that PayPal charge 20p for every payment i receive even if it is part of a subscription or recurring payment?

All figures below a rounded

Scenario:

Monthly Subscription

I charge my customers £2.00 per month for a service so your fees cost me 27p ((2 * 3.4%) + 20p) resulting in me netting £1.73 per month and/or £20.76 per year

Yearly Subscription

I give them the option to pay yearly then that's 2 * 12 = 24 which netts me  24 * (3.4% + 20p) = £22.98 per year

My theory therefore would be to charge my customers a monthly surcharge of 18p meaning they would pay £2.18 per month netting me £1.91 per month or £22.92 per year

Assuming my calculations are correct, would this be the best way to cost my subscription options to my customers?

[PayPal_Dian]

Hi soulbriski,

Thanks for posting in our Community. 

Yes, your calculations are correct. It would be cheaper for you to let your customers pay monthly. Have you looked into the option on receiving micro payments? This is for payments under 10 USD and the fees are 5% + 5P per transaction. This might be an even better option. 

If you would like to apply for these fees you can contact our customer service team and they can set this up for you. 

I hope this information helps.

Dian

[soulbriski]

Hi Dian Thanks for replying. £2.00 per month was an example of an additional fee my customers pay on top of a regular £80 per month. I could have used that as an example instead. The point here is that micro-payments are not applicable. It's interesting to note that you think it's cheaper for me if my customers pay monthly. I believe it's the opposite! Whether they pay monthly or yearly I get charged 3.4% so we can take that out of the equation but of they pay monthly then I pay 20p per month which is £2.40 per year. If they pay yearly then I pay just 20p since there is a single anual transaction. I must therefore disagree with you and say that it's cheaper for me if they pay yearly. I also note that you didn't answer my question directly. Is it still the case that PayPal charge 20p per transaction even though the transaction is part of a subscription? Thanks

[PayPal_Siobhán]

Hi soulbriski,

Apologies- you are correct, there would be less fees involved with receiving these subscriptions annually as the 20p is charged per payment received regardless of if it is a subscription or not.

Hope this clarifies things, 

Siobhán 

[soulbriski]

Ok thanks Siobhan. All clear now