If you are reading this article, it means that you likely have an online business and are looking for ways to get paid through PayPal. You also want to know more about PayPal's fees & requirements. This article will focus primarily on the fees & requirements for PayPal business accounts in Hong Kong.
PayPal business accounts (a.k.a. merchant accounts) are free to register and there are no monthly fees. You will only pay once you start using the services such as PayPal money transfer charges and receiving money.
We also have a PayPal fee calculator to help you calculate how much fees you will be paying when invoicing your clients using PayPal. Without further ado, let us dive right in.
How to set up a PayPal business account
Here, we streamlined the process into an easy 3-step guide for you to get your PayPal business account running. If you are unsure about which account you need, we recommend reading our article on the differences between PayPal for business and personal.
Step 1: Sign up for a PayPal Account
If you don’t already have a PayPal account, this is what you want to do beforehand (If you already have one, please skip to Step 2) :
Firstly, head over to PayPal to sign up for your account. Then, pick “business account” on the pop-up box. Next, fill up simple information about your business like the below:
- The primary use for the PayPal business account
- Preferred payment-acceptance channel
- Monthly sales volume estimation
Step 2: Fill out the basic information about your business
Type in all the basic information, including
- Phone number
- The primary currency that your businesses use
Step 3: Fill out the basic information of the primary authorized user
Next, it’s the information of your primary authorized user of this account. This covers a few of the basics:
- Email address
- Date of birth
- ID (with photography)
The remaining part is quite simple - verify your email address then link and verify your bank account. Once this is complete, your business account will be ready.
PayPal fees for sending payments
Essentially, there’s no fee charged for sending money from your PayPal account for whichever currency your account is holding.
You don’t even need a PayPal balance in order to send payments to any of your customers/clients. You can directly transfer the money from the bank account that you link to only by requesting an electronic transfer to it.
But one thing you should take note of is that a markup of 4% will be charged from you for the retail exchange rate when you send a personal/commercial payment that also requires a currency conversion.
PayPal fees for receiving payments
There are only two ways PayPal charges you for receiving money - either by selling to local Hong Kong customers; or overseas customers.
For Hong Kong-based customers, you will need to pay an amount of 3.9% + $2.35 HKD per transaction. But, if your clients are overseas, then you’ll be charged 4.4% + fixed fees.
Of course, the fixed fees are different depending on whichever currency you’re based on.
Say your payment is USD-based, and then it’ll be a USD 0.30 charge for that. On top of that, you should know that you might also need to pay for currency conversion rates on that as well.
PayPal fees for withdrawals
Similar to receiving payments, the way PayPal charges you is based on two factors - whether your account is local-based or overseas. For HKD withdrawal from your local PayPal account back to your HK bank account, free of charge only if you withdraw more than HKD1,000. If you’re withdrawing less than HKD1,000, there will be a small fee of HKD3.5.
But if you’re withdrawing other currencies other than HKD from your account balance, then expect a 3.00% withdrawal fee coming your way for that.
For U.S. accounts, the charges will differ slightly. Please ensure that you are checking the rates in your specific country.
For example, if you’re withdrawing USD from your Hong Kong PayPal account to your U.S. bank account, then you’ll have to pay an extra 2.5% withdrawal fee. Again, if you’re withdrawing any other currency besides USD, say GBP, then chances are there’ll be a slight additional currency conversion processing fee for your transaction.
To learn more about the withdrawal fees on PayPal, we have a dedicated article about "How to Withdraw Money from PayPal in Every Way Possible".
PayPal currency exchange rate in HK
If you’re doing business in other countries, chances are you will need to use different international currencies in your PayPal business account. If your business requires cross-currency trading, then you need to understand how the PayPal exchange rate works:
PayPal exchange rate typically involves a processing fee, which makes up to around 3-4% of the type of payment that you’re paying.
That being said, the PayPal exchange rate isn’t the most cost-effective solution for your company because there is a more affordable alternative such as Statrys advanced FX that allows you to do the same or more transaction options at a lower price.
How to use your PayPal business account
One great thing about having a PayPal business account is that you can accept payments flexibly. No matter which accounts your customers hold - Venmo, PayPal Credit, PayPal account, or even some major debit and credit card companies, the payments can still be accepted.
Another plus is that you can also purchase online either in person or by invoice. So, your customers can simply pay in the PayPal account and you can also accept payments from different marketplaces including Amazon and others.
You can also do without the hassle of having to transfer back to the business account; instead, you can have real-time access to all the funds in your account.
Here are a few fast one-click payments:
- Use a shareable PayPal link through your social media
- Instant messages
PayPal Credit for Your Customers
If you’re thinking about pushing more sales per customer, then you might want to consider this – no interest will be paid by your customer if they pay the full transaction in 6-month time on purchases over $99.
The good thing about this is that it can be used as a motivator to attract more customers to buy from you instead of your competitor who doesn’t provide the same offer.
Need to pair your PayPal business account with a digital business account?
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