As everyone may be aware, PayPal will deduct a fee from every payment you receive, whether it is local or international. I agree that PayPal is very convenient and easy to handle, however, the fee amount taken from each payment received started to make me realize how much money I am losing.
After doing some research, I found out that PayPal debited almost $1,000 out of my 2011 income. This is not a small amount if you think about what you could do with this money to improve your professional environment. The difference could be used to pay for new software or a new course to improve your skills, Proz membership, marketing materials and even pay for two years of a website maintenance.
Now the question: what is the solution for this problem? Well, it is not an easy task to override and we need to keep in mind that everything has its pros and cons. Here are two options:
- Start accepting business checks – This option may seem a little “old-fashioned”, but works just perfect for me. Running to the bank to deposit checks is only a very small inconvenience and well worth it when you consider how much you’re saving on fees. In order to avoid bounced checks, I recommend doing a background research and accepting only business checks from the country you are based in (never international or personal).
- Wire transfer – If you feel comfortable sending your bank account information, this is another option either for local or international payments. The only inconvenience of this option is the transaction fee, which can be expensive for all involved. Make sure your client is willing to pay for all fees, and if not, you need to think about if this option is really worth it compared to Paypal.
Note: Take extreme caution if you decide to accept money orders. This is something I really do not recommend (please refer to a previous post about scammers using money orders).
PayPal fees are tax deductible so be sure you’re keeping track. If you’re not keeping track, you might be surprised at just how much you’re losing each month. There is no denying the convenience of PayPal, but it shouldn’t come at such a high cost. Don’t be afraid to seek alternative forms of payment or request clients handle PayPal fees. You’ll find most are willing to work with you so fees don’t take such a huge bite out of your pay.