While reading up on pricing strategies today I came across a brilliant infographic which I’d like to share with you.
PayPal Stiffs Sellers With Changes in Refund Policy
PayPal have announced some changes that will affect their US customers, although we can also expect them to roll this out on a global basis shortly after.
Here are their announced changes. It goes without saying that sellers are livid about the latest changes, as they will start incurring significantly more fees.
- We’re removing the flat rate pricing for sending money to friends and family members who have PayPal accounts in a country other than the United States and introducing a new variable fee of 5% based on the amount you send with a minimum of $0.99 and a maximum of $4.99 per transaction. We’re also removing any variation depending on the recipient’s country.
- We are changing the currency conversion spread to 3.25% over a base exchange rate in situations where you are a sender of money in a PayPal transaction.
- We’re changing how we treat refunds. If you refund (partially or fully) a transaction to a buyer or a donation to a donor, there are no fees to make the refund, but the fees you originally paid as the seller will not be returned to you.
As you will have noticed, the biggest issue is that when someone requests a refund (which in some businesses happens quite frequently) you, as a seller, will not be refunded the PayPal transaction fee. This is a hard hit for sellers and there are various petitions asking PayPal to reconsider.
Of course, PayPal will totally ignore those requests and go ahead with the changes. The company does not really care what its users think as the bottom line is it still has no serious competition. It’s a maddening situation but PayPal users ultimately have to bear whatever PayPal decides to implement.
Should You Withdraw From PayPal to Credit Card or Bank Account?
Withdrawing your funds from PayPal to a debit or credit card can be annoying if you have significant funds. The reason is that you can only withdraw up to $2,500 at one go, and every time you make a withdrawal you are charged $2,50.
So let’s say you need to withdraw $50,000. You will need to go through the withdrawal process 20 times for a total cost of $60. This sounds ridiculous; a time-wasting activity and also a money-grab by PayPal. It is, there’s no other way of looking at it.
The other way of withdrawing is to send the funds directly to your bank account. There are no limits when compared to withdrawing to a card. Sounds like we solved our problem right?
Well, not so fast.
If your bank account is in a different currency than the funds you have stored on PayPal, be prepared to lose a significant amount of money due to PayPal’s horrible exchange rates. PayPal does not let you send, say, USD directly to a EUR-denominated account. This is a limitation on their end, and I suspect an intentional one to fleece their users. There are no such limitations when using other payment gateways such as 2Checkout.
💳 Linking Virtual Bank Accounts and Cards to PayPal (Revolut, TransferWise etc)
Note: If you have any questions after reading this and the several other articles relating to PayPal on this site, please leave a comment or contact PayPal directly. Unfortunately, due to time constraints I am unable to offer any advice over email so all emails related to PayPal will remain unanswered.
One interesting way of saving money on conversion fees when withdrawing money from your PayPal account, is to link up a virtual card or virtual bank account.
These virtual cards and bank accounts are provided by companies like Revolut and Transferwise.
Let’s say your PayPal account is in Euro, but you also have several other currencies such as GBP and USD. With Revolut and Transferwise you can open accounts in these currencies too. Therefore, when you want to withdraw GBP from PayPal, you would withdraw to your Revolut/Transferwise GBP account, thus no conversion would take place.
This has already been tried and tested by several users, and I managed to link up my Revolut card without any problem myself.
However, this is not to say that PayPal approves of the practice 100%. Here’s what they said when I asked them about it:
If the system allows you to add this bank, you can use it, but also PayPal does not take responsibility in case of missing funds during withdrawals, as we cannot communicate with virtual banks in order to locate missing transactions etc.
We usually do not advise merchants to add Virtual Banks/ Cards, but technically you can if you wish.
I also asked them if they would be able to help in adding the virtual bank accounts, since not every version of the PayPal interface (depending on your country) will let you add these accounts. Here’s what they told me:
we cannot manually add any virtual bank accounts/ cards to the PayPal accounts. This is due to the risks that are associated with them, therefore if you are able to add it yourself you can, but we cannot add them on your behalf as this function is not available to us.
So the bottom line seems to be that if you’re using PayPal for personal use and are ready to take a small risk, you’re allowed to withdraw money from (or send money to) your PayPal account from a virtual bank account like the ones provided by Revolut and Transferwise.
As always, I welcome the sharing of experiences on this matter, just leave a comment below.
Update October 2019:
TransferWise have confirmed that the debit card they provide does not allow receiving funds from PayPal. This could actually be a limitation to receiving funds from anyone and not just from PayPal. In any case, it is unusable for the purposes of linking to PayPal in order to effect withdrawals.
PayPal have also confirmed that they are unable to accept TW bank accounts:
Thank you for contacting PayPal. My apologies for late reply.
I have review bank statement provided by you and I can see it is Transfer Wise account you are trying to add. Please note that Transfer Wise is a virtual bank, therefore we can not add it for you as we do not support virtual bank accounts.
It is my pleasure to assist you. Thank you for choosing PayPal.
Documenting Procedures Using Screencasts
Following my earlier thoughts about systemization, in this post I’ll tackle a powerful tool you have at your disposal when creating processes: video.
Trello and Confluence are great repositories of internal processes. In my experience, they’re tools that are easy to learn. In fact, especially with Trello, it’s usually a case of love at first sight, and many team members end up using Trello to manage their personal processes and life.
Sometimes the best way to show how a process is done is by recording a screencast. These screencasts can then be embedded into Trello or Confluence.
Tools of the Trade
So what are the best tools for creating internal screencasts that are then shared on Trello?
- Screencasting software (Screenflow/Camtasia)
- Video sharing site (YouTube/Vimeo)
Screenflow and Camtasia are very similar feature-wise, so it’s down to what you prefer and what works best on your platform. You’ll use this software to record your screencast.
Once you’ve recorded your screencast, you need to share it with the rest of the team via Trello, so upload it to YouTube and set the privacy settings to ‘unlisted’. That means that people won’t be able to search for it in YouTube, only people having the direct URL will be able to view the video. We then grab the video’s URL and paste it into a Trello card. Trello conveniently embeds the video for easy viewing.
That’s it, apart from the cost of acquiring Screenflow or Camtasia, the rest of the process is all free. Trello is a free tool and so is YouTube. If you decide to use Vimeo instead of YouTube, you’ll need to be a premium member to setup the unlisted videos functionality. I also know some people who upload their videos to screencast.com, so that’s another alternative for you. You can get 2GB storage and 2GB bandwidth for free and beyond that you’ll need to upgrade ($100/year) and become a paid user (200GB storage). Note that with Screencast you can’t embed the videos in Trello cards however, so it’s not as convenient as YouTube or Vimeo.
When is a Screencast Ideal?
If it’s something you can explain to somebody in just one paragraph, then chances are good you probably don’t need a screencast for it. But if it’s something that is going to take you several paragraphs to walk somebody through, then it’s worth making a screencast.
You’ll need to make an effort to really think about why you do things a certain way and then make sure that you explain your thought process during the screencast.
Don’t skimp on details.
It’s better to include some extra background information about a process than leave anything out.
Make sure you give it your best shot, you don’t need to record your screencasts in a studio but it doesn’t hurt to learn a few tricks that can really help boost the level of your output.
Videos will turn out to be especially useful if like us your team is all remote based. When someone joins your team you don’t have the luxury to sit him down next to you and explain what you do and why you do it. So screencasts and full-blown presentation videos are a must in such cases. Letting the VA see you in the presentation is a great way to build rapport.
If you’re training multiple team members and have time to build some extra rapport with them, a live training session via Google Hangouts can be another option to consider. Also, keep in mind that YouTube contains a ton of resources and tutorials that you can leverage in your business. If you want to teach your new VA or team member how to administer a WordPress blog, don’t reinvent the wheel and waste your precious time, pick one of the existing YouTube tutorial videos and you’re done.
Remember that every time you are creating a video, you are expanding your vault of company knowledge. This will cut the induction time and expense for future team members. Screencasts and presentation videos are easy and fun to create, keep in mind that every video you create is a further step towards liberating yourself from the nitty gritty details of running the business.
Other screen recording utilities that you might want to check out:
I’ll finish off with a guide to documenting business processes. It is of utmost importance that you break things down to their essence and make it very easy to understand.
- Notice (Notice which workflows are key to your business and repetitive in nature.)
- Document (Write down every step. Don’ t leave anything out.)
- Optimize (Once you’ve written the basic documentation, ask yourself three questions:
#1: Which of these steps can be eliminated?
#2: Which of these steps can be simplified?
#3: Which of these steps should be done in a different order?) - Test (Go through the workflow again, executing only what’s written down.)
- Share (One of the most powerful things about workflows is that they make delegation vastly easier.)
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