Anyone whose work is tied to the online world will know of and have used PayPal. Bloggers and freelancers may use the platform more than most; however, there are a lot more people who pay or get paid through this service, and will enjoy these tips.
If you are reading this, then you’re probably familiar with how transactions through PayPal work. You should already be aware of the fact that the platform does have fees that you must pay every time you receive any amount of money. The website currently charges 2.9% + $0.30 for every transaction that you invoice. While this may sound like a small amount, think of the bigger picture. Think about how much money you use over the course of a year, by paying these fees. The fees can cut a sizable chunk into your profit if you’re not careful.
While you may be worried to realize how much money you are actually losing, there is a way to bypass these taxes. You will still have to pay a tax, but it will be much lower than what you’re probably paying PayPal at the moment.
The best method to forget about paying these large fees is to start using a piece of invoicing software called Freshbooks. Most people are aware of it, however, they never use it because the service comes with a monthly fee of about $20/month. While PayPal may seem the better choice, considering that it is free, just do the math. If the money that you lose each year on transaction fees is greater than what you would have to pay Freshbooks in a year, then you should consider changing your tactics.
The great thing about this software is that one of its features allows you to collect money from PayPal as Business Payments, instead of Standard ones. This means that you would only be charged 50 cents per transaction, instead of paying a percentage of what you make.
You will see that, in time, the Freshbooks subscription will practically pay for itself, and you will be able to actually keep a larger portion of what you earn.
Freshbooks has a feature where instead of collecting standard PayPal payments, you can collect them as PayPal Business Payments.
Also, it’s extremely easy to set up. You just have to make an account, link your PayPal, and click on a checkbox in order to enable the feature once you’ve finished with the other settings.
Please keep in mind that this does not mean that you won’t have to pay any kind of fee. For example, if your clients use a credit card in order to pay you, you will still have to pay the usual expenses. However, those who pay you through this PayPal feature will help you save a lot of cash over the course of a year. If you’re confident that those who have to pay you won’t mind, you can even turn off credit card payments and only use the PayPal Business ones. This will enable your clients to pay with their checking account.