Paypal Raises Fees on Personal Accounts – And I Care Why?

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on August 18, 2009 in Freelance Writing Business
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I just came across some info (Paypal raised fees to receive money with personal accounts - earlier this month from what I can tell) via Twitter (through Darren Rowse and an article on SitePoint). Now the SitePoint article was a bit half-assed, so please forgive me if I'm misunderstanding anything here (to the author: doubling zero doesn't equal 2.9%, or 30 cents, or even the combination of both).

That combination is apparently now going to be charged to personal Paypal account holders when they receive money for goods and services (in other words, when they operate in a business capacity).

Sure, I can understand why the cheapskates are upset. They can't rely on the other business owners (with premium and business accounts) to pay their way anymore. Don't get me wrong. I'm not the biggest fan of Paypal (although I can't say I've had any big problems with them either). I know the fee addition on these account holders doesn't mean that business and premium account holders are now going to get a break. But that said, I'm actually glad people won't have a way to (as easily) play the system anymore, acting like their business should be exempt from things everyone else has to pay.

I found the PCWorld.com post about it almost amusing. Are we supposed to feel bad for the author because he's a writer and he earns a "significant chunk of [his] earnings" through Paypal payments? I hope not. As I put it on Twitter - boo fuckity hoo. If he was earning that much through Paypal payments, then he should have been on a premium or business account to begin with (and unless I'm mistaken they limit your business income on a personal account to $500 per month anyway, so it probably isn't as "significant" as he makes it sound - but of course that wouldn't sound as sensational). Who knows? Maybe I'm wrong.

Paypal did royally blow the change when their PR and marketing people thought they could put a positive spin on "we want your money."  I'll give the article's author that point. But hey. You're smart enough to see through corporate spin, right? Then you should also be smart enough to get the right kind of account for your business needs, and suck up the fees like a professional. You didn't really think you could get something for nothing forever, did you? (Speaking to everyone and not just that writer - Jared Newman.) Maybe some people opted out of the emails from Paypal so they didn't get notice. Maybe Paypal really didn't mention it (in which case it's more than a little snafu on their part). I don't know. I've always gotten terms updates without a problem for my business account, but I won't speak on that part beyond my experience.

The PCWorld article also links to two news stories supposedly cited by Paypal's PR manager. Again, I could be wrong, but I'm more than a little skeptical that she would have pointed him to new stories about the new change that were  published more than a month before it happened (at least based on any mention I can find of it). Something doesn't seem right there. Either the links he posted were way off base (although they'd help make his point), or she really did give him those links without thinking (and I'm one of the last people in the world that would make excuses for a bad PR move). But still, on seeing them common sense should tell you they're probably not about the same issue. At least he later clarified the quote a little bit in a followup post.


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This so-called story is a major yawn in my book. It's about damn time all business transactions are treated a bit more equally. Business is business folks. If you're not responsible for paying your business' way, then who the hell do you think is? So tell me. Am I missing something in all of this garbled mess? Is there really a story somewhere? The most I see is that Paypal needs a new PR Manager (or of course that there could be more to what she said given that we're just seeing a limited quote). As for the "grumblings" mentioned in the PCWorld article. TS for them. Sudden or not, they should count their blessings they got to do business for free as long as they did.

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Jennifer Mattern is a professional blogger, freelance business writer, and indie author. She began writing for clients in 1999 and started her first blog in 2004.

She owns 3 Beat Media - a publishing and client services company which operates All Indie Writers as well as several other websites and blogs including The Busy Author's Guide and BizAmmo. Jenn comes from a background in online PR and social media consulting, having owned a small PR firm for several years before choosing to pursue a full-time writing and publishing career.

Jenn also writes fiction under multiple pen names in the areas of children's fiction, mysteries, and horror fiction. Jenn is an active member of the Horror Writers Association (HWA) and currently serves as the organization's Assistant Coordinator of Promotions and Social Media.


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5 Comments

  1. Lissie August 19, 2009 Reply

    I never received a notification either – so yes I agree that the users should have been notified – in fact its illegal for banks to put fees up without fair notice in my country – I guess paypal avoids “being in country”! It is a doubling of the fee because the 2.9%+ 30c has always been charged to the sender of the money on personal accounts -now its being charged for the receiver as well.

    I don’t see it has anything to do with whether I am running a business or not. I would never get a business bank account because banks think they can charge you more for the same service – that’s called being ripped off in my book.

    If the business/premier pp a/c holders (of which I am one as well) were subsidizing personal account holders its only because Paypal was making slightly less money with them – not that they were losing money. Basically they have my money but owe me no interest – do you think they leave all those 100,000′s earning no interest? Doubt it – at even 0.5% that’s a nice little earner. They consistently make money with currency exchange fees with my account too- and many others as well.

  2. Yolander Prinzel
    Yolander Prinzel August 19, 2009 Reply

    I’ve said it before and I’ll say it again, if you had a brick and mortar and wanted the convenience of accepting credit cards you would have charges from the credit card companies. The Paypal charges are no different. If you don’t want charges, have your clients pay you in checks.

    Personally, I love my Paypal business account. I have the money market and the debt card, it’s easy, flexible and they only charge me when my client doesn’t have cash in his or her Paypal account. I can’t complain.

  3. Jennifer Mattern August 19, 2009 Reply

    1. Paypal isn’t technically a bank. They’re considered a payment processor. They’re a service provider, and that’s it.

    2. I’m still not sure I understand. From the terms, people have not been charged to send money as a whole (only if they choose to send money with a credit card, and frankly that’s very much a standard when it comes to payment processing, as credit card companies charge the company for those transfers). I’ve also seen several others point out that people have never been charged to send from paypal; only to receive. They’ve always had a free option to send money via Paypal. There were no blanket charges covering all sending. What did change is that now people can receive personal transfers for free on premiere accounts (meaning they removed the fees for some people and added them to others – the ones who should have been paying from the start). So unless I (and a lot of others) are completely missing something, there’s no real doubling of any kind here. People can still choose to send money for free.

    3. Most banks don’t owe you interest on a checking account either. Paypal is a private company. You pay to use their service (for the convenience of being able to accept online and credit card payments without paying for a merchant account of your own). Does your plumber pay you interest? Does your babysitter? How about your doctor? Um, no. You pay them for their service, and they provide you that service. If anything, Paypal already offers more than they have to for business owners. The cashback using their card is one thing (of course those trying to get around the business accounts / premiere accounts don’t have that option). You pay for perks. That’s life.

    4. If you don’t want to use the business options then it sounds like you’re not that serious about your business. As Yo pointed out, you do have another option. If you don’t like Paypal’s fees, stop using them and get your own merchant account. Newsflash: You may end up paying more.

    Such is life. Such is business. Either you’re prepared to take on the responsibilities and costs of being in business, or you’re not. The fact that someone can’t earn more than $500 per month doesn’t mean they should be rewarded with lower, or no, fees while more successful business owners pay. All business should be treated equally, and now it is.

  4. Shirley Anderson August 19, 2009 Reply

    I did not receive any notification from PayPal, either. I have the freebie personal account but it has always cost me something to receive and move money, anyway. I always just assumed it was because I’m Canadian.

    Anyway, I’m used to a fee, so unless it has quadrupled or something, it won’t phase me.

    A couple of asides…

    Jenn, I love your writing style.

    Lissie, I didn’t know that you read here, too!

    • Jennifer Mattern August 19, 2009 Reply

      I’m not sure if you were charged fees because things are different in Canada (always possible w/ companies operating in multiple countries), but if payments were coming from the US or elsewhere, then they’d at least charge fees for the conversions. Oh, how I hate those fees. It’s always a shocker (even though you’d think I’d expect it by now) when I get a payment from my Australian client or one in the UK versus one in the States.

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