Ask LH: How Can I Minimise PayPal Fees?


Dear Lifehacker, I am the treasurer for a very small association. We want to use PayPal so we can sell raffle tickets, receive donations on our Facebook page and so on. I’m just wondering what would be the best way to set up PayPal to do this? Obviously we want to try to avoid fees wherever possible. Cheers, Fees Freeze

Picture by Sean Gallup/Getty Images

Dear FF,

PayPal’s ubiquity makes it the obvious solution in this case, and assuming that your association already has a bank account, it’s not difficult to set up. PayPal even has a specific page for charities and non-profit organisations.

What you can’t avoid is paying some fees to PayPal. For a small organisation (one receiving less than $5000 a month), you’ll pay 30 cents plus 2.4 per cent of the value of each transaction. That pricing means that smaller donations are (relatively speaking) more costly: if someone donates $2, PayPal will get 35 cents; if someone donates $20, PayPal takes 78 cents.

There’s no way around these fees; that’s the price you’ll pay. Given the convenience factor and potential for more donations and sales, it’s likely to be worth paying, but that decision obviously is up to the organisation. Good luck!

Cheers
Lifehacker

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