PayPal posted an article titled: “Upcoming Changes for Some US Businesses”. The new rates will apply to a portion of their merchant customers in the U.S. beginning on August 2, 2021.
Here is what is changing:
PayPal Digital Payments: For PayPal products, (such as PayPal Checkout, Pay with Venmo, Pay in 4, PayPal with Rewards, Checkout, and crypto), which include Seller Protection on eligible transactions, the new rate for online transactions will be 3.49% + 0.49 per transaction.
In-person Payments: For PayPal and Venmo QR code transactions over $10, the new rate will be 1.90% + $0.10. For transactions that are $10 and under, the rate will be 2.40% + $0.05. For certain in-person debit and credit transactions the rate will be 2.29% + $0.09.
Credit and Debit Card payments: Online credit and debit card transactions will be 2.59% + $0.49 per transaction without Chargeback Protection, or 2.99% + $0.49 with Chargeback Protection.
Charity Transactions: Fees for charity transactions will be 1.99% + $0.49 for confirmed charities (subject to application and pre-approval).
Non-standard Pricing: For U.S. merchants who have custom, non-standard pricing, rates will remain unchanged for those services as agreed.
The Verge reported that in the past, PayPal has had a flat rate for sellers processing payments, charging 2.9 percent of a transaction price, plus a 30-cent fee. The new higher rates will apply to the company’s newer products like PayPal Checkout, and Pay with Venmo.
Fortunately, there are alternatives to PayPal.
Ko-fi does not take any fees. (They make their money from Ko-fi Gold subscriptions and donations to their own Ko-fi page.) If you have a Ko-fi account, and connected it to your PayPal account as a payment processor, PayPal will still take its transaction fees.
Stripe charges fees that are lower than PayPal’s. Cards and Wallets: 2.9% + 30 cents; Bank debits and transfers: 0.8% – $5.00 cap; Additional payment methods: starting at 80 cents. Stripe offers invoicing at 0.4% per paid invoice with the first 25 invoices free per month.