PayPal Micropayments : The Cheapest Fees For Micro Payment

Do you have goods or services that are unique and want to sell at a cheap price online? But whether it's possible? The answer is of course possible:)

Accepting payment by credit card at micro-payments business may sound ridiculous. The reason is the existence of credit card processing fees, which is the most popular payment for online transactions.

The limit of micro payment business here is for payment of less than U.S. $ 12. It means the price of goods or services you offer is below the price of U.S. $ 12.
One of the most frequently encountered problems is the problem of credit card processing fees. As a merchant, you will be burdened with costs that must be paid for credit card processing. Of course you can add these costs to the price component that will raise the price of goods or services you offer.

I believe you will find out credit card processing system with the least possible cost so that your profits will be even greater.

PayPal Micropayments

PayPal offers support for micro payments (micropayments) for the merchant. This means that PayPal provides special services for those who sell goods or services at a cheap price.

PayPal's micropayments feature providing a special rate of 5% + U.S. $ 0.05 for each transaction. This feature applies for premier and business accounts.

As you know, if we apply a standard PayPal account, we automatically charged 2.9% + U.S. $ 0.30 for each transaction. But what if you often receive a payment with a small nominal. The question that arises is “are there any differences? “

Standarpayments Vs. Micropayments

Let us compare the fees charged for standarpayments and micropayments.

PayPal Premier / Business: 2.9% + U.S. $ 0.30
PayPal Micropayments: 5% + U.S. $ 0.05

Now we calculate and we will find the magic number is U.S. $ 11.90. Where did these numbers come from?

Let's count together!

The numbers we will search for example is X, then:

0.029X + $ 0.30 = $ 0.05 + 0.05X
0.021X = $ 0.25
X = $ 11.9047 * $ 11.90

So $ 11.90 is the the transaction value called "cutoff" which means that we must decide whether to use the account premier / business account or use Micropayments.

If the transaction value of less than U.S. $ 11.90, we should use Micropayments account. Conversely, if the transaction value of more than U.S. $ 11.90, fees charged by PayPal would be smaller if you use account premier / business.

How to Have Micropayments Account?

There are two ways to have Micropayments account, namely:

1. Changing account premier / business into account Micropayments. We can apply to change the account premier / business into micropayments account. If you've changed, then our Paypal account will be subject to Micropayments rate and standard rate is no longer valid. This process may take approximately 2 business days.
2. Create a new PayPal account which later turned it into Micropayments account. In my opinion, this way better because we will have a flexible savings to reduce the cost of PayPal.

The next question is: if the transaction value is exactly U.S. $ 11.90, which one do you want to choose between account premier / business or Micropayments?

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Harry Seenthing said...

thanks for share this knowledge about paypal

Warren said...

Thanks for the insight, I will be signing up for another account too.

setting gprs said...

nice article, i still new in paypal...

Leon said...

Thank you !!

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Blue Rock Investments said...

Paypal really can be a great earner using micropayments if you can get enough sales and traffic to your site to convert, it's getting to the right level first that's hard.

tekgems said...

What is the break even if you have 2.2% + $0.30?
Do micropayments have to pay the cross border fee?

tekgems said...

I figured out it is $9.00

It's quite difficult to know which account is bestto use because you don't always know what quantity the buyer will purchase causing you to go past the sweet spot order total of $9 for 2.2% rated merchants.

I wish paypal would simplify the processing and just process at the rate most favorable to us. Requiring two different accounts is an unnecessary chore in the age of automation.

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