Paypal User Agreement:
Fees are based on whether you are making a Purchase Payment or a Personal Payment.
A Purchase Payment is a payment received for any of the following:
A Personal Payment is:
- A sale of goods or services (a “Commercial Transaction”);
- A payment you received after using the “Request Money” tab on the PayPal website;
- A payment you received for a donation; or
- A payment that is sent to, or received by, a business or other commercial or non-profit entity.
For Purchase Payments, the recipient of the payment will always pay the fee.
- Amounts sent to a friend or family member without a purchase. Personal Payments include, but are not limited to, sending a gift to a friend, or paying a friend back for your share of a lunch bill; and
- Personal Payments must be sent between two individual persons (not to or from a business).
For Personal Payments, the following applies:
-The fee is based on the Payment Method,
-It is free to send a Personal Payment to someone in the United States if you use your bank or balance as the exclusive Payment Method*. All other Personal Payments include a fee as noted below.
-The fee is paid by either the sender or recipient. Not both.
-The sender of the payment determines who pays the fee. At the time the sender is completing the payment, the sender is given the option to either pay the fee or have the recipient pay the fee.
Additional fees apply if you are sending or receiving money to or from a country outside the United States, or transacting in a foreign currency.
If you use your credit card as the Payment Method for a Personal Payment, you may be charged a cash-advance fee by your credit card company.
*In some instances, Personal Payment pricing may not be available, the payment will be considered a Purchase Payment and the Purchase Payment fees shall apply. This may occur on non-PayPal websites that offer you the ability to send a payment from your PayPal account.
If you're making a purchase for an item, the payment has to be sent as a Purchase payment and not a Personal payment. If a payment is sent for a purchase as a Personal payment, Paypal won't do anything for dealing with a chargeback, so it's for the sender's protection to make sure payments are sent as Purchase payments. If you file a dispute with Paypal over a purchase and the payment is a Personal payment, they won't do anything to resolve it.
Paypal fees are easy to calculate, and there's a number of website that show both sides of the transactions for money sent and money received. One I used to frequently (http://www.rolbe.com/paypal.htm)is no longer online due to the owner passing away. Try using one of these instead:
It shows how much needs to be sent to have the recipient receive a certain amount of money, as well as how much the recipient will receive and how much the Paypal fees are.
In the negotiations for the price of an item or items, please work out who should pay the Paypal fees in working out the terms of the deal, though Paypal obviously collects the fee off the recipient's side of the transaction. The Paypal calculator site above is very easy to see how much the sender should be sending to have the recipient net out an amount after fees.
There's also other payment methods that can be used in lieu of Paypal, as well.
As we've gone through the user agreement multiple on the Personal Payment issue, it was brought up again that the payee on Paypal payments can't surcharge for the use of Paypal fees on the payer. The payee pays the fees on Paypal for Purchase payments.
No surcharge section of the Paypal UA:
4.5 No Surcharges. You agree that you will not impose a surcharge or any other fee for accepting PayPal as a payment method. You may charge a handling fee in connection with the sale of goods or services, as long as the handling fee does not operate as a surcharge and is not higher than the handling fee you charge for non-PayPal transactions.
You cannot explicitly charge Paypal fees as a surcharge for a transaction. If the price for the item is listed, it can't have Paypal fees added as a surcharge. Payees pay the fees with Paypal and it can't be explicitly added to a purchase cost.
EDIT - Addendum about Amazon Payments:
For people that would rather not deal with Paypal, Amazon offers a similar service with Amazon Payments:
EDIT - Addendum about Steam multi-packs and PSN gameshares:
I've contacted both Paypal and Steam about the gift payment and gifting of games (Steam has a thing about extra copies not being able to be sold).
Thank you for contacting PayPal.
Hi, my name is Sonny. I appreciate you sending us an email regarding
your concern and I will be happy to assist you with your questions. Let
me explain this further.
Since the payments are coming from your friends, it is perfectly fine to
receive Personal payments. As long as the sender initiates the Personal
payment, you do not have to worry about your account because there will
be no restrictions.
Thanks for sharing your concerns with us. We value what you have to say.
If you have time, you can learn more about using PayPal by visiting
PayPal Consumer Support
PayPal, an eBay Company
Original Message Follows:
customer subject: Does this qualify for use of personal payments?
customer message: Additional Information:
'I play lots of games on Steam and they have these 4-pack deals where you buy a game and it gives you one and 3 others to send to friends. I've been the one doing the up front purchase and they've been using Paypal Personal Payments to send the money they owe me for their part. Is that a use that qualifies for personal payments? I don't want to get my account or theirs locked out for improper use so before we do another one I wanted to get verification.'
I finally got a reply back from Steam:
Hello jp0213, Thank you for contacting Steam Support. This rule in the subscriber agreement is meant to prevent the abuse of this gifting system (i.e. user purchases a "copy" of left 4 dead from an online auction and instead gets a gift pass). We understand that friends or groups of people often go-in on four packs of subscriptions and will not automatically disable any of your accounts for it. If you have any further questions, please let us know - we will be happy to assist you.
Thank you for taking the time to check with Paypal and Steam, jp0213. Good fact to know that they consider Steam 4-packs to be worthy of Personal payments for "repayment" of the purchaser's copies of the game.
I think gameshares would probably work the same way to Paypal, since it's the same analogy of the up-front purchase of an item and the "repayment" to cover the share of the item, like the "repayment of lunch debt" analogy Paypal themselves use.
Edited by shrike4242, 05 October 2012 - 05:43 AM.
Added new Paypal fee calculator sites.