PayPal Added Higher Fees In Australia. Why?
Updated: Dec 16, 2020
PayPal just got more expensive in Australia. PayPal again, for reasons not clear at the moment, decide to charge Aussie SMEs a higher fee. On Dec 1, 2020, SmartCompany.com.au Lois Maskiell's announced that PayPal has added a new fee to SMEs (Small-Medium Enterprises) based in Australia. "Aussie businesses are hit with a 3% fee for transferring US dollars from their PayPal accounts to non-PayPal accounts." TransferWise posted a Tweet on Dec 3, 2020 reiterating this shocking, but, somewhat, not surprising, move by the big online shop.
PayPal seems to be a bit elusive with providing a detailed explanation to its business users. The most we can ascertain at this moment is according to a spokesperson is that there is only a small fraction of customers that use this method. The new fee has been implemented for over several weeks. And this fee is in place with 30 other countries and is standard when transferring funds to US bank accounts by non-US account holders.
This is still a surprising move by the online giant. Due to the circumstances surrounding COVID and businesses who are hanging on for dear life. Every single dollar matters to the bottom line. Regardless of this new charge being a standard fee for non-US account holders to pay when transferring money to US bank accounts. PayPal with its high currency exchange rates and now a higher fee for businesses makes it a very expensive product. Alternatives do exist and Aussie businesses should be aware of this move. What's worse is recently the slumping AUD/USD hits below .7400 on Dec 8, 2020. According to Christopher Lewis at FXEmpire, "Part of this was probably a bit of a “knock on effect” from all of the concerns when it comes to Brexit, and the never ending drama that the situation seems to provide." A study done by Reckon and reported by Media Release claims that over two-thirds of small business owners indicate the federal government is not doing enough to support their issues in today's economy. A recent recession, a fluctuating AUD, unknown COVID concerns, and other factors doesn't help the Aussie SMEs who use online money transfer services such as PayPal. 2020 has been a challenging year and 2021 should not be much different. Hang in there mates; look at alternatives here and save money.