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Q&A: "Have I found a way to accept PayPal payments with no fees?"
More than 300 million people have a PayPal account, and you can use it to receive business payments in addition to personal money transfers. The question is from a crafty listener who's found a way to avoid PayPal fees when accepting payments. He wants to know if he's really on to something or if this is unethical in some way.
"I'm getting killed with PayPal fees! We take a lot of small payments, and they charge a transaction fee in addition to a percentage fee. However, I think I've found a loophole. For the past few months, I've asked our customers to pay us by sending their payments directly to my email address. Then, when I have to make payments to vendors, I use the Friends & Family option and there are zero fees. Brilliant!"
First things first, this absolutely works, especially with U.S. to U.S. transfers. I discovered this myself many years ago and have occasionally used it when paying vendors.
That said, I wouldn't ask my customers to do it because you're trying to run a business. It's the equivalent of the taxi driver asking you to pay in cash because the meter isn't working. It's a little shady.
Having to pay a relatively small percentage of your sales for merchant processing is just how it works. These fees enable you to take payments from people everywhere who trust that the transaction is secure.
So in short, I don't think this is a great practice to adopt on a wholesale basis, especially when receiving payments. But if you're sending funds to someone at some point, now you have the knowledge you need to decide for yourself.
