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How you can reduce PayPal fees

One of the most significant drawbacks to using PayPal is the fees you'll have to pay. Thankfully, there are plenty of steps you can take to reduce PayPal fees. If you follow this advice, you'll be able to spend less on fees and have a better experience when using PayPal.


Take advantage of accounting software

Since PayPal is one of the most accepted payment processing systems globally, it's not unusual for accounting software to offer PayPal integration. In some cases, the software you use may provide you with suggestions that will help you keep your PayPal fees in check.

Using accounting software can save you time and reduce your stress levels, and it can also save you quite a bit of money. If you're not currently using any accounting software, you should search for well-reviewed software that offers integration with PayPal.


Ask clients or customers to pay you less frequently

Generally, you'll be paying PayPal fees every time you receive payment. It is quite possible to avoid PayPal fees by receiving fewer payments in total. You could offer regular customers an incentive for bundling purchases so that you'll be subjected to more periodic fees. If you have a strong working relationship with a client, you could request that they pay you once monthly rather than sending you several payments throughout the month.

If you're able to cut back on the number of payments you receive, the amount of money going towards PayPal fees will go down. While this won't be an option for everyone, it's one of the most effective ways to make PayPal fees more bearable.


Utilise friends and family payments

PayPal offers "Friends and Family" payment systems that have no fees attached. There's an apparent downside to opting for Friends and Family payments. With these payments, you won't be able to file a dispute if there is an issue with the transaction.

However, if you're working with a client that you trust, you may want to consider asking them to make payments via Friends and Family. Just be aware of the drawbacks before you make these kinds of requests.


Request a debit card from PayPal

In addition to paying fees when you receive payments in PayPal, you may be subjected to fees when you transfer money out of your PayPal account. If you want to access your funds instantly, but you'd prefer to avoid fees, you should request that PayPal send you a debit card.

You'll be able to use this card to spend the money in your PayPal account without transferring it. If you'd prefer to have the money in your bank account, avoid the instant transfer option. The other option can take at least one business day to process, but there are no fees attached.


Include fees in your prices

If you don't mind making a slight increase to your prices, you can ensure that PayPal fees won't impact you at all. It's widespread for business to roll PayPal fees into your pricing.

If you choose this option, you won't be reducing your fees, but you will be reducing the impact that they have on you. Since PayPal fees usually aren't very high, you won't have to make a substantial price increase.


Claim PayPal fees on your taxes

Your PayPal fees could classify as a business expense, which means these fees might be tax-deductible. Being able to claim your fees on your taxes won't get rid of your fees, but it can make them much easier to manage.

Make sure you track the fees you pay throughout the year. When you're preparing to file your taxes, you can see if it makes sense for you to claim these fees. This could help you to lower your tax bill so that you can keep more of the money that you earned that year.


Look into other forms of payment

PayPal is popular, but it's important to remember that it isn't your only option. There are many alternatives out there, and if you're not happy with PayPal fees, you may want to consider some of these options. For example, you could ask clients to pay you via wire transfer.

Make sure you're aware of some of the other options out there. Compare fees and consider accepting other forms of payment. Even if you choose to stick with PayPal, you'll benefit from learning more about your choices.


As you can see, there are plenty of ways for you to reduce PayPal fees. If you regularly use PayPal for your business, you'll want to pay attention to what you're paying in fees. These fees can add up quickly, and as you can see, there are plenty of ways for you to reduce what you spend.

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