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💳 Linking Virtual Bank Accounts and Cards to PayPal (Revolut, Wise etc)

Last updated: August 15, 202256 Comments

 

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, N26 and Wise.

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 Wise.

As always, I welcome the sharing of experiences on this matter, just leave a comment below.

Buying Crypto with PayPal

Did you know you can now buy crypto with PayPal? That’s right, you can use Binance since it accepts PayPal deposits. Just hit the links below to get started.

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You can also read my full review of Binance to learn more about this crypto exchange.

Buy Bitcoin with Binance

This withdrawal method is extremely popular at the moment, as people worldwide seek to get themselves some Bitcoin or Ethereum due to their extremely bright future price prospects.

Update October 2020:

This time PayPal have not outright said that they don’t work with TransferWise, but specified that the limitation is with Mastercard for my country.

As your PayPal account is from ____, you can only complete a withdrawal to the following financial instruments:

– Bank account.
– Visa card.

Currently, MasterCards are not eligible financial instruments for withdrawals in ____.

Due to the challenges and complexities associated with the worldwide financial network, we cannot offer a firm date or timetable for expansion of specific services. We can promise you that we are working hard to enhance our service within the nations where we are offered.

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 the 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.

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.

  1. Are You Losing out from PayPal’s Exchange Rates?
  2. 🤔 Which PayPal Account is Best for You?
  3. 💸 Changing Your PayPal Withdrawal Currency
  4. 💸 Understanding PayPal Cross Border Fees
  5. How to Withdraw From PayPal into a Maltese Bank Account
  6. 💳 Withdrawing Money From PayPal for Non-US Accounts
  7. Which PayPal E-Commerce Checkout Service Should You Use?
  8. 🤔 Should You Open Separate PayPal Accounts for Each of Your E-Commerce Stores?
  9. 🆚 PayPal VS Wise Borderless
  10. 💳 Linking Virtual Bank Accounts and Cards to PayPal (Revolut, Wise etc)
  11. How to Change Ownership of a PayPal Account

Filed under: Business

How to Improve Your English Pronunciation

Last updated: September 12, 20235 Comments

These are my top tips, based on my experience, on how you can improve your English pronunciation.

Decide which flavour of English you want to concentrate on

The three big ones are American English, British English and Australian English when it comes to pronunciation. Most people will want to learn American English as it is the most widely used, and frankly, for business use, that’s the best one to learn. In the future, we might need to learn Mandarin, but for now, the US is the world leader in business and innovation. So go with American English pronunciation unless you have some specific reason to learn one of the other two. A typical reason might be acting in a movie where your character is supposed to have a British English accent.

 

 

Methodologies. Books, Courses, One-to-One Training?

There are several resources available to you for helping you improve your English pronunciation. An important factor is your budget. There is no doubt in my mind that the most effective strategy is to go for personal one-to-one training, which can be done online using Skype. It is unfortunately also the most expensive option. Refer to the recommended tutors list below.

Recommended Books & Audio CDs

  • American Accent Training – Ann Cook
  • Tree or Three? Student’s Book and Audio CD: An Elementary Pronunciation Course – Ann Baker (British accent)
  • Ship or Sheep? Book and Audio CD Pack: An Intermediate Pronunciation Course – Ann Baker (British accent)
  • English Pronunciation in Use – Mark Hancock

Recommended Online Video Courses

  • Rachel’s English
  • Pronunciation Workshop

Recommended Tutors for Private Lessons

Should you opt for the personalized route, here are a few expert tutors to consider:

  • Geoff Lindsey (30-minute sessions via Skype)
  • Tom Kelley (1-hour lessons via Skype)
  • Pronunciation Pro (several packages to choose from)

Filed under: Business

The Cheapest Way to Pay Remote Workers in the Philippines for a European Company

Last updated: April 23, 20203 Comments

 

Working remotely is becoming more and more popular, with lots of European companies outsourcing part of their workloads to labor in the Philippines. The big question is how to pay these remote workers at the end of every month.

The current methods I know of are:

  • PayPal
  • Bitwage
  • Payoneer
  • Bank transfer

There are many other services but they mostly seem to cater for US companies rather than European ones. For example, Xoom does allow economical transfers of money, but the source bank account or debit/credit card should be in USD, else you will be hit by a conversion fee from EUR to USD, apart from the eventual fee to convert to Philippine Pesos.

So far, the most straightforward service remains PayPal. It is possible to have both a USD and a EUR balance within PayPal accounts, so this gives the best level of flexibility when paying remote workers in the Philippines.

On the other hand, Payoneer is a strong competitor, with the slight disadvantage that you will have to sign up for a Payoneer account and supply some company documents for them to verify the company before being able to put payments through.

To test things out, I sent a payment of around $1000 to the Philippines with both PayPal and Payoneer. I used USD for the PayPal transfer and Euro for the Payoneer transfer, but the value was the same, I just calculated the Eur value using that day’s exchange rate. After calculating all fees, conversion to currencies and receiver’s bank fees, Payoneer comes out the winner as long as you send in Euros. Compared to PayPal, the receiver saved at least $35-45 after all is said and done with a Euro payment. If I had done it in USD the receiver would only save about $8-10.

Have you found any great services for transferring money from Europe to Filipino remote workers? Let me know!

Filed under: Business

Affiliate Income and EU MOSS VAT Treatment/Rules

Last updated: April 14, 202111 Comments

All businesses that are selling digital products in the EU are affected by the MOSS legislation regarding VAT payments.

The Mini One Stop Shop (MOSS) came into force on 1 January 2015 and allows taxable persons supplying telecommunication services, television and radio broadcasting services and electronically supplied services to non-taxable persons in Member States in which they do not have an establishment to account for the VAT due on those supplies via a web-portal in the Member State in which they are identified.

This scheme is optional, and is a simplification measure following the change to the VAT place of supply rules, in that the supply takes place in the Member State of the customer, and not the Member State of the supplier. This scheme allows these taxable persons to avoid registering in each Member State of consumption. The mini One Stop Shop mirrors the scheme in place until 2015 for supplies of electronically supplied services to non-taxable persons by suppliers not established in the European Union.

In practice, under the scheme, a taxable person that is registered for the Mini One Stop Shop in a Member State (the Member State of Identification) electronically submits quarterly mini One Stop Shop VAT returns detailing supplies of telecommunications, broadcasting and electronically supplied services to non-taxable persons in other Member States (the Member State(s) of consumption), along with the VAT due. These returns, along with the VAT paid, are then transmitted by the Member State of Identification to the corresponding Member States of consumption via a secure communications network.

The Mini One Stop Shop VAT returns are additional to the VAT returns a taxable person renders to its Member State under its domestic VAT obligations.

The Mini One Stop Shop is available to taxable persons who are established in the EU (the Union scheme), as well as taxable persons which are not established within the EU (the nonUnion scheme). Without the mini One Stop Shop, the supplier would be required to register in each Member State in which he supplies services to his customers.

The Mini One Stop Shop scheme is optional for taxable persons. However, in choosing to use the mini One Stop Shop the taxable person must apply the scheme in all relevant Member States. It is not an optional scheme on an individual Member State basis.

More information about the new legislation can be found in this PDF document.

Also the following:

  • HMRC’s excellent guide and flowchart
  • Sitesell’s simple but comprehensive guide to the new VAT rules
  • Digital Arts’ Guide to MOSS for creatives
  • Guidelines for the VAT treatment of Electronically Supplied Goods
  • Facebook EU VAT Group
  • VAT MOSS Technical Implementation
  • Info relevant to Malta

What is a digital product?

The European Commission has four criteria that will determine whether something is a digital product:

  • It is not a physical, tangible good.
  • It’s essentially based on IT. The offering could not exist without technology.
  • It’s provided via the Internet or an electronic network.
  • It’s fully automated or involves minimal human intervention.

You’re probably consuming and using digital products all day long, whether or not you realize it. Here are some common ones on the market today:

  • E-books, images, movies, and videos, whether buying a copy from Shopify or using a service like Netflix. In tax language, these products are in a category usually called, “Audio, visual, or audio-visual products.”
  • Downloadable and streaming music, whether buying an MP3 or using a service like SoundCloud or Spotify. Of course, these products also fall in the audio category.
  • Cloud-based software and as-a-Service products, such as Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS).
  • Websites, site hosting services, and internet service providers.
  • Online ads and affiliate marketing. Income from these services can be considered taxable under digital tax policies.

Heads up: you might also hear digital goods referred to as “digital services,” “e-goods,” or “e-services.” All of these terms refer to the same thing.

MOSS and Affiliate Payments

If you engage in affiliate marketing and promote other people’s products or services you get a commission for it. The marketer who pays you a commission is your customer. And if this marketer is an EU person, you may have to apply the MOSS VAT rules on these commissions.

Here’s how it works. First of all, affiliate commissions fall under ‘marketing services’. There was initially some debate on whether they are fully automated or not, but it seems that most VAT authorities are classifying it as an automated electronic service, hence falling under MOSS rules.

Here are a few scenarios.

  1. If you are provided with a VAT number, no VAT should be charged, applying reverse charge.
  2. If you receive affiliate income from non-EU, no VAT is charged.
  3. If you receive affiliate income from EU, without VAT number, since this is considered to be fully automated and electronic service, VAT should be charged at the location of the customer, and declared in MOSS.

In a domestic setting, as an affiliate, you would send an invoice to the business, which has to pay a commission to you. The invoice contains the commission amount plus the applicable VAT. The product owner, whose products you promote, then can claim back from tax authorities this VAT amount you invoiced.

Again, if you’re a European-based affiliate, and the company whose products you are promoting is also a VAT-registered business in the EU but in another country compared to yourself, you don’t need to charge them VAT. Both of you have a VAT number and this is a B2B transaction, so the reverse-charge mechanism is used.

Now there is a special case that merits some attention. Some businesses in the UK have revenues that fall below the VAT threshold and will therefore not be required to have a VAT number. This proves problematic to you as an affiliate if you are promoting the products of such a vendor.

Because of all the red tape involved and relative newness of the system, affiliate marketing plugins used by such vendors are not able to handle this new rule. At the end of the month, they will pay your commission without any consideration of VAT. If you contact them about the issue, they might decline your request to pay an extra amount of VAT to you and then to reclaim it from their government. So there is a good chance that you will have to pay it to the product owner’s government, but he will neither pay it to you nor demand it back from his government.

If they can’t modify their affiliate systems to handle this scenario, you might get them to pay you the extra VAT they owe you by generating an invoice yourself (including the VAT due) and sending it to them. Then they will forward you the due VAT amount in addition to the automatic affiliate payment already issued by their systems.

A common question among affiliates in Europe concerns the VAT MOSS rules and how they apply to affiliate income.

If you are a business providing affiliate marketing services to another European registered company that has a VAT number, there is no change. Since both are companies and both have a VAT number, there is no VAT charged in this B2B transaction.

The major doubt arises when you have companies or freelancers who are below the threshold for VAT registration in countries like the UK, so they don’t have a VAT number. If you are providing affiliate services to these companies or freelancers, you will need to charge VAT to them.

This can be quite annoying as many affiliate systems automatically pay affiliates every month, and they don’t have functionality for MOSS VAT built-in. So what you will need to do is inform the company that you will be issuing a monthly invoice to them with the VAT added on top of the referral income they owe you. They should not have any problem with this arrangement since that is what the law necessitates. If you don’t invoice them and obtain payment, you will be liable to pay the VAT yourself, which is not a good situation.

Now the second question relates to what VAT rate to use when charging advertisers. The answer is that you should use the VAT rate of the country where the advertiser is based. Hence we are using the MOSS VAT rules because affiliate income is classified as an automated digital service.

Hence if you are a Spanish affiliate for a UK-based product seller, and this UK seller does not have a VAT number, you need to charge him UK VAT at the end of the month when you obtain your affiliate payout. Then, you will need to declare the amount collected on your MOSS statement.

Preparing Invoices

Invoicing for affiliates can be a bit tricky. Affiliates themselves don’t usually invoice the product owners. As a blog owner, for example, you can be signed up to over 200 affiliate programs, so creating invoices every month for small amounts would be ridiculously time-consuming. I

Instead, what happens is that affiliate network platforms such as Shareasale, automatically create invoices for the product owners on behalf of the affiliates. That satisfies accounting requirements without adding overheads to the affiliates. It is important that the product owners obtain all the relevant details from their affiliates as this info will be automatically inserted into the invoices, which are a legal obligation to have in all jurisdictions in Europe as far as I know.

Filed under: Business

🤔 Should You Open Separate PayPal Accounts for Each of Your E-Commerce Stores?

Last updated: April 04, 202122 Comments

paypal_logo

PayPal remains one of the most popular ways of accepting online payments, so you’re bound to be using it if you’re involved in online business. A question that comes up sooner or later is whether you should open a separate business account for each of your brands or products.

Separation of Personal and Business PayPal Accounts

First of all, I want to clarify that you should, first of all, have separate personal and business PayPal accounts. This is allowed by PayPal as detailed in this FAQ. You shouldn’t be mixing your personal transactions with those of your business. You should keep separate personal and business bank accounts and you should also do likewise with PayPal. Then link the personal PayPal account to your personal credit card or bank account, and the business PayPal account to your business credit card or bank account.

PayPal Business account

With that out of the way, the next stage as you continue to grow your business will be launching and selling more than one product. With revenue from both of these products coming in through the same PayPal account, there can be some challenges.

The first challenge you will encounter is that of accounting. Since you will be seeing the total amount of revenue generated from both your businesses, it will be hard to visualise at a glance how much of that revenue belongs to each business. Of course you will also hopefully have good reporting facilities from the e-commerce platform you are using which will somewhat compensate for this disadvantage. Moreover, if you are accepting payments through other systems apart from PayPal (e.g. Stripe/Braintree), you shouldn’t be looking at the revenue stats in PayPal as a measure of how you’re doing because that figure will be missing all other payments that would have come through via the other payments systems.

What to do if you have a separate company for each brand

As long as you have separate companies, there should be no issue at all. A company is legally distinct from its owner. Each can and should have its own bank account, credit card, email, etc.

As a result, you will be able to sign each one up individually at PayPal. You will be the representative of your company for each PayPal account, but the PayPal accounts will each belong to the respective company.

And if you don’t have a separate company for each brand?

Here’s when things get tricky. Many business owners create a company and then sell a number of products/brands from that one company. This is usually when the question arises about whether they should have separate PayPal accounts for each product/brand.

There are a number of pros and cons for each way to go and no clear answer to this question.

If you are planning to spin off and sell a particular product or brand, you should always create a separate PayPal account for it and treat it as a separate entity from the rest of your business. During the selling process and the due diligence period, it will be so much easier for you and the buyer if you have a separate PayPal account housing the transaction of just that product that you will be selling off. Otherwise, you will have to filter things that can get messy, plus you won’t be able to just transfer the ownership of that product’s PayPal account to the new owner, which is a disadvantage for them as they won’t get the history of that account. This will affect your selling price so keep that in mind.

For the new owner, having a PayPal account that has been previously set up and having everything working smoothly is a very important bonus. The changeover will be easier and they will have a handy history of every transaction recorded from the inception of that product. Moreover, you have to also keep in mind that PayPal allows lower transaction rates depending on your monthly volume of sales.

Another thing to consider is whether you will have subscriptions and recurring payments processed through PayPal. If that’s the case I would recommend using two separate Paypal accounts as it will be very messy or downright impossible to move over those subscriptions to a new account in the future if needed (for example in the case of a sale of one of the products to a new owner).

Most e-commerce software systems provide additional and handy functionality through PayPal’s IPN system. This can allow you to do things like give refunds from the e-commerce system itself rather than having to log in to your PayPal account to process the refund. If you use PayPal Standard, you can use a single account for multiple sites. If you use PayPal Express, you need to use a separate account for each site. This is because PayPal Standard supports multiple IPN URLs while PayPal Express only supports one.

Now if you decide to go for one PayPal account to cover all your products, it might be a good idea to still pass your payments through separate email addresses linked to the same PayPal account. This is very useful if you are receiving payments from several different sources. To give you a concrete example, imagine a blog having affiliate arrangements with tens or hundreds of product vendors. If they all have their own affiliate systems, as is frequently the case, you would have signed up with each vendor and gave them your PayPal email address. Now if in the future you sell that blog, the new owner would have a very tedious job having to log in to each of these affiliate accounts and change the PayPal email address to his instead of yours. However if you had used an additional email address to your company’s PayPal account, the transition would be much smoother. You would just have to unlink that email address from your company’s PayPal account, and concurrently the new owner would add that email address to his company’s PayPal account. From that moment onwards all payments will reach the new owner’s account, without having to change any settings on the vendors’ side.

An important pro for having just one account for all your brands (if you don’t plan to sell in the immediate future) is easier management. You don’t have to log in to several PayPal accounts to check on things, you just have one account. Another potential issue with having multiple accounts is which account to process expenses from. If it’s not easy for you to associate expenses to a particular product, it might be a struggle to choose which PayPal account to use for them. For example, if you are using a backup service for all your product sites, and you want to make an automatic monthly payment, which PayPal account will you use if you have a number of them? Having just one account eliminates this problem altogether.

Another thing to consider is that PayPal assigns different commission rates based on the volume of transactions per month that an account generates. Thus if you have everything going into one account there might be a better chance for you to get the lowest rate than if you separate the accounts and hence lower the volume of each account.

Hopefully, this is helpful to you when deciding whether to open separate PayPal accounts for each product you own or not. Please leave a comment if you have any further questions and I’ll do my best to answer them.

  1. Are You Losing out from PayPal’s Exchange Rates?
  2. 🤔 Which PayPal Account is Best for You?
  3. 💸 Changing Your PayPal Withdrawal Currency
  4. 💸 Understanding PayPal Cross Border Fees
  5. How to Withdraw From PayPal into a Maltese Bank Account
  6. 💳 Withdrawing Money From PayPal for Non-US Accounts
  7. Which PayPal E-Commerce Checkout Service Should You Use?
  8. 🤔 Should You Open Separate PayPal Accounts for Each of Your E-Commerce Stores?
  9. 🆚 PayPal VS Wise Borderless
  10. 💳 Linking Virtual Bank Accounts and Cards to PayPal (Revolut, Wise etc)
  11. How to Change Ownership of a PayPal Account

Filed under: Business

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