Do you do all your eBay trading through a single PayPal Account? If so, you might be losing money.

Are you aware that your credit card provider (and visa debit card provider) might charge back a transaction that's gone wrong if PayPal refuses your Claim?

Have you ever made payment by PayPal and thought 'I don't want to used cleared funds, I want to pay with my debit card, credit card or by instant bank transfer?

Have you ever wondered if there is a way to reduce the fees that PayPal takes from low-value transactions?

If so, read on. There is a way.

This Guide assumes you are registered with PayPal Ireland.

However, if you live in a country that PayPal allow you to send, receive and withdraw money to a bank account, much of the following will apply to you as well.

eBay's rules prohibit linking to non-eBay pages in eBay Guides. There are some non-clickable URL addresses that will show you the relevant page you need to look at.

Here's a brief summary of the four types of PayPal account. Please look at the sections after for my recommendations of which account(s) you should, in my opinion, hold.

* Updated to take account of the new Policy Update October-25-2007 *

www.paypal.com/ie/cgi-bin/webscr?cmd=_update-policy

Types of Account:

1. Personal Account

A Personal Account is best used for buying only (see below). There are no fees to make payments (eBay purchases) or send money (non-eBay payments).

You can accept payments for free into a Personal Account, from cleared PayPal funds, instant bank transfer or eCheque up to a maximum of £250 GBP equivalent per month; PayPal calls this the 'Receiving Limit'. If you need to receive more than this then you will need a Premier or Business Account.

You can accept five debit- or credit-card funded payments per year. You will pay fees on these card funded payments as per the fees described below  (€0.35 + 5.4%). If you receive another card-funded payment and you have reached your limit, you will be prompted to accept the payment and upgrade to a Premier or Business Account, or refuse the payment and keep a Personal Account (but see note below on Seller Non-Performance). You will not know if a payment is funded by card until you actually receive it.

In general, you cannot list on eBay with PayPal as a payment option and refuse to accept a card-funded PayPal payment. If you do, you can be reported as a Non-Performing Seller.

Seller Non-Performance

Exceptions to this rule:

- Your are allowed to specify in the listing that you will not accept a PayPal payment that is not eligible for PayPal Seller Protection.
- You offer a cash-on-collection option and the item is collected.

Thus, if you plan to sell on eBay, a Personal Account is no good on its own; you will need a Premier or Business Account as well.

2. Macropayments Account (Premier or Business)

(Herein referred to as the 'Standard' account).

You will pay fees on all payments you receive, but there are no receiving limits as in a Personal Account. You can accept unlimited payments from all funding sources - including card-funded sources. Fees on a 'Standard' account are up to €0.35 + 3.4% (3.9% on cross-border payments - see further notes for more details on international transactions). If your monthly sales are in excess of €2500.00 you should apply for merchant rates - doing so can reduce the fees to as low as €0.35 + 1.4% (from the basic €0.35 + 3.4%)

www.paypal.com/ie/cgi-bin/webscr?cmd=_display-fees-outside

If you sell on eBay and some of your items (including postage and packing) have a total price of approx €13.65 or over, you will need one of these 'Standard' Accounts.

3. Micropayments Account (Premier or Business)

As per the 'Standard' Account above, but the fee structure is fixed at €0.05 + 5%. The break-even mark for fees cheaper than a 'Standard' Account is approximately €13.65 (at the standard rate of 3.4% + €0.35). So if your items (including Postage and Packaging) go, or are likely to go for less than €13.65, list on eBay with the PayPal payment email of this account. This is easy enough for fixed price format (i.e. Buy-It-Now and Shop Inventory Format) but may require some guesswork with an auction - it's one of those things that's 'swings and roundabouts'. Usually you will save fees, but if the final transaction price rises to above €13.65 you will pay more than if you'd listed with the payment address from the 'Standard' Account.

This cheaper rate is only applicable to EU-to-EU transactions (and US-to-US, UK-to-UK and AU-to-AU ), so transactions outside the EU will be charged at the 'Standard' fees rate. PayPal also stipulates that Micropayment fees are only applicable where PayPal is the sole payment option, but in my experience, this is not the case and Micropayment fees are applicable where you list with other payment options (such as Bank Transfer, Cheque, Postal Order, International Money Order etc.) It's possible PayPal will enforce this 'sole payment requirement' in the future though.

4. Business Account

As per the 'Standard' account above, plus:

If you wish to have a PayPal Account under a business or company name, you must have a Business Account.

A business account holder can give multiple users (i.e. employees) access to the account (different levels of access are available).

There are a number of 'business solutions' such as Auction Tools, Website Payments Products, Email Payments and PayPal as an Additional Payment Option [that are only available to Business Account holders].

Which Type(s) of Account Should I Open?

You are allowed one Personal Account, one 'Standard' Premier or Business Account and one Micropayments Premier or Business Account (i.e. one type of each account). If you read the PayPal Help Pages, they don't exactly advertise the existence of a Micropayments Account.

Buying

My advice is for everyone to open a Personal Account for buying with.

Why? Because you will not be using this account to receive payments into. Therefore it will never have a cleared PayPal balance. This means that you can select the funding source of your choice (as cleared funds are always taken first, unless you manually select eCheque).

If you fund with a 'reward' credit card (there are plenty around - PayPal even offers one), you will earn points or cash-back every time you make a purchase funding with your 'reward' credit card. This is ideal if you pay off your credit card balance every month and don't pay any interest fees. Earn points or cash-back while you spend!

Furthermore, if you fund with your credit card (or visa debit card), your card provider may pursue a charge back for a transaction gone wrong if PayPal rejects your claim. This may provide you with more protection than paying with any other funding source.

Ideally you will add a bank account for the purposes of verifying to the Personal Account and then when verification is complete, remove the bank account from your Personal Account. Adding a bank account to your PayPal Account is a further step in proving your identity to PayPal, but it is not necessary to leave the bank account associated with your PayPal account once the verification process has been completed. Also, don't forget, that when you add the bank account, you complete a Direct Debit Instruction to your bank allowing PayPal Direct Debit rights. If you don't intend to fund your PayPal Personal Account by instant bank transfer, once your Personal Account has been verified remove the bank account and cancel the Direct Debit Instruction with your bank.

Verifying a PayPal Account will lift the sending limit that applies to an unverified account (due to European anti-money laundering laws). If you remove the bank account, it will leave the sole funding source as your credit or debit card. If you prefer to fund by instant bank transfer, leave your bank account in situ.

See point 3 here in the PayPal User Agreement:

www.paypal.com/ie/cgi-bin/webscr?cmd=p/gen/ua/policy_payments-outside#payments-policy

Selling

If you sell, you will need a Premier or Business Account or Accounts. As specified above, there are receiving limits set on a Personal Account. You will not be able to tell which payments will be funded by card and so you need to accept all funding sources.

Because you can choose the funding source from a Personal Account, I would not recommend upgrading a Personal Account to a Premier or Business Account. I would strongly recommend leaving your Personal Account in situ and not upgrade it.

If you sell some items that have a total transaction value of  €13.65 or less, I would advise you to open a Micropayments Account as well as a 'Standard' Account. If you do not sell low-value items under €13.65, you do not need to open a Micropayments Account.


Whichever account or accounts you decide to open, my advice is to complete all the 'security' requirements that PayPal require. This means that you should verify your account and complete the Expanded Use Program if you have added a card.

Why? Because there is a maximum total receiving limit of €2500 for a Premier or Business Account due to European anti-money laundering laws. If you reach this limit and your account is not verified, PayPal will limit your account and stop you from making or receiving any more payments from it / to it until you have completed the verification process. This may cause you major problems if you are suddenly unable to use your PayPal account for trading with. It takes about five banking days for the deposits to be sent to your bank (one step in the verification process).

See point 4.3 from the PayPal User Agreement:

www.paypal.com/ie/cgi-bin/webscr?cmd=p/gen/ua/policy_payments-outside#receive-policy

There is also a limit on withdrawing money from an unverified account set at €750 per month, or if this limit is not reached €1,000 per calendar year

See point 6.2 from the PayPal User Agreement:

www.paypal.com/uk/cgi-bin/webscr?cmd=p/gen/ua/policy_payments-outside#withdraw-policy

PayPal may also 'suspend' your credit / debit card (for PayPal use - i.e. removing the option of this funding source) if you have not completed the Expanded Use Program.

For your security, double-check that any PayPal sign-in page begins with 'https://' the page has the SSL padlock and that the URL name in the address line is paypal.com.

If there are any limits set on your account, click the 'View Account Limits' hyperlink on the 'My Account Overview' page.

To check if you need to complete the Expanded Use Program, log into your PayPal Account, go to the Profile Tab and then Financial Information > Credit/Debit Cards. This will show you all your associated cards and will indicate here if you need to complete the Expanded Use Program.

If there is no button to start the Expanded Use Process, here's the URL to get to the correct PayPal page:

www.paypal.com/ie/mem-number

and here's a Help Page from eBay.com.sg

Completing the Expanded Use Program

In my opinion, you do not want to give PayPal ANY excuse to limit your PayPal Account. You may find it very difficult to trade on eBay without it - particularly in view of the increasing emphasis by eBay on persuading buyers to use it and the number of increasing eBay categories you must list with PayPal as a payment option.

General Announcement - PayPal Required for Listings in Some Categories

There is an increased risk of having your PayPal account frozen / limited if you sell high-risk / expensive items (such as mobile phones, MP3 players etc). If this happens, you will be asked by PayPal to provide invoices from your suppliers and proof of delivery (by way of a tracking number that can be electronically verified) for goods that you've already sent to your buyers. This proves to PayPal that you own the goods and are delivering them to your buyers.

Always keep your Recorded Delivery / Special Delivery / Courier slips for at least six months (and probably safer for a year) after receipt of goods by the buyer. Don't throw them away as soon as your buyer receives the goods, as you might need them later on.

PayPal will not accept positive feedback that has been left by your buyer as evidence that the item was received. PayPal will only accept evidence of delivery by way of a tracking number that can be verified electronically on the Carrier's Website.

How do I Open a PayPal Account?

For a Personal and Premier/Business Macropayments 'Standard' Account

• Go to PayPal UK www.paypal.com/ie/ 
• Press the 'Sign Up Now!' button
• Select the account type that you want
• Make sure the Country seleceted in the drop-down box is Ireland.
• Press the Continue button.
• Fill in all the relevant information and press the Sign Up button at the bottom of the page.

For a Premier/Business Macropayments Account

Details on this very helpful me page:

About Me: vallombrosa2

First, clear your cookies (I say this as corrupt PayPal cookies have been know to cause problems at this stage) and then go to the PayPal Micropayments sign-up page here:

www.paypal.com/IntegrationCenter/ic_micropayments.html

and press the 'account registration page' hyperlink.

The next page should be entitled 'Choose Account Type'. In the drop-down box underneath 'Select the country or region where you live' change it from 'United States' to 'United Kingdom' and the follow the step in the section above to create the account.

When you've created the Micropayments Account send an email to micropayments@paypal.com (from the primary email address of that account) and ask them to confirm that the new account is a Micropayments Account. If they won't confirm or don't answer, log into the PayPal Account and use the 'Help Section - Contact Us' to ask the same thing.

There's some more useful details on this eBay Discussion Thread:

Discussion Thread on PayPal Micropayments

Further Notes

International transactions will be subject to cross-border fees and you may pay more in PayPal fees. Here's the PayPal web-page with details:

www.paypal.com/ie/cgi-bin/webscr?cmd=_display-xborder-fees-outside&countries=

Note this bit though, essentially it means if a payment is made from Europe in €Euros, the extra 0.5% fee is waived:

* Sellers who receive payments in Euros from other European Union countries will receive an additional 0.5% reduction in their cross-border fees.

With regards to the 2.5% charge on the currency exchange, this is paid by the person that makes the exchange. So if you list on eBay.ie in €Euros, you will be paid in €Euros and the buyer will pay the currency exchange fee. However if you list on another site, in their local currency, you will receive payment in that currency. If you want to convert that to €Euros, you will be charged the 2.5%. The alternative is to open Currency Balance in your PayPal Account - but that's only useful if you intend to make a payment in that currency.

Here's the full Domestic Fee structure:

www.paypal.com/ie/cgi-bin/webscr?cmd=_display-fees-outside
www.paypal.com/ie/cgi-bin/webscr?cmd=_display-receiving-fees-outside&countries=

You can't associate the same bank account or card with more than one PayPal account. So if you open both a 'Standard' Account and a Micropayments Account, you will need two bank accounts - one registered to each account - to withdraw money to. A savings bank account should suffice.

If you only have two bank accounts, but want to open three PayPal Accounts as per my recommendation, use one of the bank accounts in the verification process on the Personal Account first, then remove it when verification is complete, before adding it to one of the Premier/Business Accounts. As already stated, adding a bank account forms part of the verification process (it forms part of proving your identity), but it is not necessary to leave it associated to the Personal Account.

My general advice is to open one of each of these accounts:

• Personal
• 'Standard' Premier/Business Macropayments
• Premier/Business Micropayments

When you list on eBay, based on the total or estimated total transaction price, select the PayPal email payment address from the PayPal Account that will yield the least fees. So if the total transaction price (item price plus P&P) is or is likely to be less than €13.65, use the email address from the Micropayments Account, otherwise use the 'Standard' one.

You can't link a single eBay account to more than one PayPal Account, but as long as your eBay Selling Account is linked to a verified Premier / Business PayPal Account you will not be stopped from listing items that require a linked, verified PayPal Account if you list with the PayPal payment email address from the non-linked PayPal Account.

Here's a couple of Help Pages that tell you how to link your eBay Account to your PayPal Account if you haven't already done it:

Linking your eBay account to your PayPal account

Link your PayPal and eBay accounts

If you have both a 'Standard' and a Micropayments Account, as long as the PayPal Premier/Business Account which is not directly linked to your eBay Selling ID, is verified, it will have the same level of PayPal Buyer Protection as the linked one. So if you qualify for the higher tier of PayPal BP (i.e. €1000 of BP) on the linked account, the other account (if verified) will have the same level of protection.

PayPal Seller Protection Policy

www.paypal.com/ie/cgi-bin/webscr?cmd=xpt/cps/securitycenter/sell/SellerPPOverview-outside
www.paypal.com/ie/cgi-bin/webscr?cmd=p/gen/ua/policy_spp-outside#spp-policy

YOU need make sure that you understand the steps you need to take so that transactions where you cannot afford to lose money through an 'Item Not Received' Claim or 'charge back' are eligible for the PayPal Seller Protection Policy (SPP).

Only transactions between UK, US or Candian buyers and sellers qualify for SPP.

paypal.com/uk/cgi-bin/webscr?cmd=xpt/cps/securitycenter/sell/SellerPPOverview-outside

NEVER send an item if you receive a payment email that appears to be from PayPal that tells you that funds will be released on receipt of a tracking number. It's a classic SCAM:

Announcement: Spoof Email Asking for Tracking Number Before Payment

read the opening post here, which gives you details of what to do:

How to deal with scam buyers

DON'T accept PayPal for an item that is to be collected. You will not be able to prove delivery to the buyer in the event of an INR Claim or charge back and why pay fees when you don't have to? Ask for cash-on-collection (or prior Bank Transfer and wait until it clears in your account). If you offer the choice of both postage and collection and you list with PayPal as a payment option, put information in the listing that you will only accept cash-on-collection (or prior Bank Transfer)  if the item is to be collected.

Revised: How to select 'No Postage: Local Pickup Only' on a listing

If an item is for collection only, don't list with PayPal as a payment option. If you have

• Offer PayPal as a payment method in all my listings
• Tell buyers the I prefer PayPal payments

enabled, you will need to disable them:

Payment Preferences

or sell with a different eBay ID where they are disabled. In addition, if you block bidders without a PayPal account in your Bidder Preferences, you will need to disable that preference as well :

Buyer Requirements

(or do it individually when you list each item).

Don't make the mistake of thinking that you must fill all SPP criteria for every transaction. If you sell low-value items like myself, it's a complete waste of money charging the buyer extra money in Postage & Packing just to you can send by a trackable method.

Confirmed Address

www.paypal.com/ie/cgi-bin/webscr?cmd=p/gen/shipping-address-outside

I recommend that if you are a buyer that you 'confirm' your address with PayPal if it's 'unconfirmed'. This is because some sellers will only post to a confirmed address. Posting to a confirmed address is one of the criteria for sellers to be eligible for PayPal Seller Protection.

www.paypal.com/ie/cgi-bin/webscr?cmd=p/gen/ua/policy_spp-outside#spp-policy

The only current way to confirm your address with PayPal Ireland is to add a credit card, issued by a credit card provider that subscribes to the 'Address Verification System'. I don't know which UK providers don't subscribe. My cards from Goldfish, Nationwide and GE are all in the AVS. Unfortunately PayPal cannot verify an address from a debit card provider.

Credits

Finally (I can almost hear that big sigh of relief) these people deserve credits for providing assistance in the construction of this Guide.

eBay user eBay My World: rniloc

eBay user About Me: vallombrosa2

eBay user eBay My World: doyleysdolls

If you have any questions, please email me on the link you will find on my me page

About Me: ajcardiac

or ask on the Payments and Postage Discussion Board

Payments & Postage Board

Regards & hope you found something of interest.

AJ

View My Other Guides Here:

Payment by Direct Bank Transfer
How to Make PayPal Work for You (UK)
How to Make PayPal Work for You (USA)
How to Schedule a Listing (Advanced SYI form/TL2) - UK