PayPal raises rates, offers chargeback protection service for additional fee

Monday 21 June 2021 11:48 CET | News

PayPal has announced several upcoming changes for US-based businesses involving transactions cost rates and an optional chargeback protection service for an additional fee.

Sellers currently pay 2.9% plus 30 cents per transaction to process a payment through PayPal. The company announced it's raising rates in August 2021 to 3.49% plus 49 cents per transaction.

For example, for a USD 25 item, sellers who currently pay PayPal 2.9% plus 30 cents, or USD 1.03, would pay USD 1.36 under the new fee structure - a difference of 33 cents, which in this case, is a rate increase of 32%. As sellers understand all too well, the sale of a USD 25 item generally incurs higher payment-processing fees since companies like PayPal charge fees on the total transaction amount - including sales tax and shipping charges. 

This directly impacts sellers' profit margin. Another way of looking at the impact of the higher rates on a USD 25 sale - currently sellers pay a fee equal to 4.1% of the item's selling price; in August, that will rise to 5.4%.

The impact of the new fees are also depicted on the EcommerceBytes website

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Keywords: PayPal, transactions , ecommerce, payment processing
Categories: Payments & Commerce | Online Payments
Countries: United States
This article is part of category

Payments & Commerce