In our forum a member recently asked if there are alternatives to PayPal when deciding how to accept pay from clients. She loved the convenience and hates the fees. Typically PayPal charges 2.9% of the sales price plus .30 USD per transaction. On a $100 deal, they would, in most cases, collect $3.20, leaving you a net of $96.80.
I’m a big PayPal fan
The thing about PayPal is it gives you the ability to accept Credit Cards without paying a monthly fee. Yes, you can find Merchant Accounts that charge lower processing fees but that monthly fee, which you pay even if you don’t make a sale, generally eats up most or all of the savings. Plus, getting a merchant account isn’t the easiest thing in the world.
The other thing I like about PayPal is I can make payments to others from my account there or through a debit card.
Finally, PayPal is pretty well recognized around the world, which is important when you need to decide how to accept payment.
Other ways to accept payment
There are a ton of other services. Some of the better known are:
Google Wallet is a possibility but after 15 minutes or so of poking around their site I couldn’t find a clear statement about fees.
Amazon Payment charges the same as PayPal and after waiting 14 days for your first payment to settle, it takes 3-5 days for you to receive payment.
Dwoalla makes ACH transfers. They advertise no transaction fees, but they do have a monthly cost for merchants.
Wire transfers are another way to accept payment. Ask your bank about fees.
Western Union – I’ve received money via Western Union – it’s fast and works across most borders. The fees your client will pay will vary from place to place and by the amount.
Check – if you and your client are both in the US, receiving a check via (snail) mail still works well.
Cash – yes, I have one client who occasionally pays me in cash. I report every cent of it.
Fees are business expenses
Whatever fees you pay to receive money, as in the case of PayPal, merchant accounts and sometimes wire transfers, are legitimate business expenses and, in the US, can be deducted.
When you can anticipate such fees it only makes sense to increase your prices so you’re passing the fee along. Since most of my clients pay me via PayPal, I’ve increased my fees to cover that cost.
It’s up to you to track and report your fees and your income
No matter how you accept payment, it’s up to you to track your fees and report your income. The online services do create a record for you. Some are easier to understand than others. For example, when I receive money via Western Union I usually end up with a paper receipt because I have to go to a store to collect my money. PayPal provides a record of all my transactions online.
Regardless, it’s up to me to track and report both my income and my fees.
How do you accept payment for your writing?
Write well and often,
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