Is Paypal the best option for sellers for collecting payments automatically?

[philestore]

Hi,

I've been selling a few items on ebay.com with "free shipping" and Paypal charged me around 4.1% fees. And now the money is in USD so I still don't know if they are gonna charge me another fee to convert it into CAD.

Have any one of you tried another automatic type of payment collecting solution? I see there is a checkbox to use "credit cards Visa/MC" instead of Paypal, but I have no idea of how it works.

Is Paypal the cheapest / best all-automatic payment collecting solution to use on eBay? I put "automatic" in bold twice because I do not need to know about "call-me-on-the-phone-after-purchasing-to-arrange-for-manual-payment" solutions. I plan on selling a lot in the future, no time for manual stuff! Plus I want something that allows the buyer to pay immediately like it is done with Paypal now.

Thanks!

[esclyons]

you will definitely lose money when they exchange it to Canada funds..

[pjcdn2005 · Accepted solution]

https://pages.ebay.ca/help/policies/accepted-payments-policy.html

eBay doesn't allow sellers to ask for manual payments in most categories anyway. Most buyers expect a buyer to accept Paypal and that is what the majority of sellers here use. You can set up your own credit card merchant account but it will likely cost more than Paypal and you don't receive your money immediately. I do think that the majority of buyers here would be uncomfortable dealing directly with a seller's own cc merchant account.

Paypal charges .30 for each transaction plus .2.9% for transactions with Canada, 3.7% in the buyer is in the US and 3.9% if the buyer is anywhere else in the world. 

The only way to avoid a currency exchange fee is to either list on .ca in Canadian dollars or to transfer your money to a US bank....not a $US bank account but to a bank that is affiliated with the US. As I've never done that I'm not sure exactly how that works.

[reallynicestamps · Accepted solution]

If you are doing enough business in US dollars, you should consider opening an account with a US bank.

We use RBCBank, which is a US bank subsidiary (of some sort) of the Royal Bank of Canada.

Ask at your local branch.

The difference is that a Royal Bank account here in Canada can be in US dollars (or for that matter in euros, or rupees, or yuan) but it is still a Canadian bank account.

The RBCBank account is an American bank and has the US federal licensing.

If the account is affordable-- there are several conditions and some fairly hefty fees--they allow you to transfer USD from your RBCBank account to your Royal bank account, without changing currencies.

Then you can transfer the USD to your Canadian dollar account paying only one set of exchange fees.

For matters of scale, we set up our RBCBank account for our auction business, which supported five employees.

Or if you are smaller scale,  keep your USD payments in your PP account and use them to make purchases that are listed in USD.

I agree with the others about other forms of payment.

Paypal is the 800lb gorilla and is trusted.

We had shop customers who would pay over the counter with credit cards, but when they bought from us online always used Paypal.

[philestore]

Well, I decided to sell in USD on ebay.com instead of ebay.ca because I had this idea that listing in USD might be more attractive to the US market. Now that I understand that I'm gonna have to pay some fees I'm not so sure about it anymore...

Do you guys think that listing in USD might help target the US market or that I should just not worry about this and come back to CAD?

[kawartha-ephemera]

May as well sell on both sites...you're paying for listings on both sites, may as well use them. Carry both US and CAD currencies in your PayPal account, convert the US to CAD only if you need the cash or whenever the exchange rate is favourable.

[pjcdn2005]

Some people do think that selling in $US appeals more to US buyers... some say that it doesn't.

I don't know the answer....I suspect it depends on the seller, types of items, price etc.

I don't really notice the conversion charge although it does exist. If I transferred US$100 right now to my Canadian bank account from Paypal I would receive $123.65 Canadian. If the exchange was the other way around and I received less money that I put in, that would seem a little more ominous.

[ricarmic]

I believe the conversion charge depends on how much you convert a month*.

Normally my conversion cost is between 2.5% and 3% (if one watches the currency rate and acts quickly when our $$ value increases one can sometimes get a better rate before the PAYPAL rate is adjusted).

*After a month of holidays (so no sales and no withdrawals), my conversion rate is higher, between 3.5% and 4% this lasts for a month and then goes back down again so I'm assuming there is some sort of volume discount still in effect....

[recped]

The currency conversion rate on PayPal is a fixed percentage (used to be 2.5% but I think that has gone up a bit), the rate never changes no matter how much you convert.

Most Canadian banks charge a very similar percentage (counter rate) unless you are converting larger sums where they may charge slightly less and will actually book the transaction in "real-time" which may or may not be an advantage over the fixed exchange rate that banks normally set once or twice per day.

One other thing to consider is the billing currency for eBay fees, if you sell in US Dollars but are billed in CA Dollars (or vice versa) there will be additional conversion fees to pay.

Most of the time it's beneficial to have you selling currency match your billing currency, note that the billing currency can only be changed once per year.

As far as the question of which currency is "better", understand that the default for buyers is to show prices in the buyers home currency, most US buyers will see the price in US Dollars regardless of the listing currency unless they change their settings or view your Canadian Dollar listings on .ca.

[reallynicestamps]

And if you list on both sites you get 50 Free Listings on each.

Which is almost half a Basic Store for free.

Lots of variables under the eBay tree.

[a52split]

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@pjcdn2005 wrote:

 If I transferred US$100 right now to my Canadian bank account from Paypal I would receive $123.65 Canadian. 

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The street vendor near my office would give me $126.47  Do you notice this?

Paypal used to charge 2.5%.  They now charge 3%.

You can set up an account like reallynicestamps describes above, or go to any US bank.  The small regional bank I use has zero fees.  I can use any ATM in the world for zero charge.  If I wanted to hold $USD when in Canada, I can write myself a check and cash it in any bank here.  Again, no fees.

[philestore]

Alright everyone, thanks for advice!

I have to admit that selling on eBay is more complicated than what I expected. Also, something that I understand now: fees + fees + fees + more fees + even more fees = lots of fees

Thanks!

[pjcdn2005]

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@a52split wrote:

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@pjcdn2005 wrote:

 If I transferred US$100 right now to my Canadian bank account from Paypal I would receive $123.65 Canadian. 

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The street vendor near my office would give me $126.47  Do you notice this?

Paypal used to charge 2.5%.  They now charge 3%.

You can set up an account like reallynicestamps describes above, or go to any US bank.  The small regional bank I use has zero fees.  I can use any ATM in the world for zero charge.  If I wanted to hold $USD when in Canada, I can write myself a check and cash it in any bank here.  Again, no fees.

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Are you sure that you are looking at the street vendor's buy rates and not the sell rates...or vice versa? They are not the same.  Those who exchange money have to make money somehow...few if them are going to buy currency from one person and sell it to someone else at the same rate unless they charge an additional service charge.