If you’re thinking about setting up a business account here in Hong Kong, then having a PayPal account ready for your clients might be on top of your to-do list to get the transaction work sorted.
In fact, 88% of customers would complete PayPal’s initiated checkouts. And if you’re using other digital wallets, nearly 45% of the customers would fail to complete the transaction.
Crazy how you can lose your conversion that quickly just because of a payment choice, isn’t it?
Now the good thing about PayPal business accounts (a.k.a. The merchant account), there’s no charge for setting up the PayPal business account, or monthly fees, or anything like that. However, there are some fees attached if you want to use some of the other features available in the PayPal business account.
So, how much does it actually cost?
Well, depending on your needs, a PayPal Business Account could vary anywhere from Free to HK$2.35 + 4.4%.
Here’s a brief summary we sorted out for you to have a comprehensive look at all the costs of having a PayPal account for your local business.
If you’re an SME just starting out your business in other countries and haven’t given much thought on how to manage your dozens of e-payment accounts, here’s 5 Tips for Handling Global Payments as a SME .
Business Accounts Fees for PayPal
a. Sending Money
Essentially, there’s not really a 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.
In fact, 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 retail exchange rate when you send a personal/commercial payment that also requires a currency conversion.
b. Receiving Money
To put it simply, there are only two ways on how PayPal charges you for receiving money - either by selling to local HK customers; or overseas customers.
For Hong Kong-based customers, you will eventually need to pay an amount of 3.9% + $2.35 HKD per transaction. But, if your clients are overseas, then you’ll be charged for 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, then it’ll be a $0.30 USD 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.
Similarly, 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, it is in fact free of charge only if you withdraw more than HKD1,000.
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.
If you’re withdrawing less than HKD1,000, that’s fine too. There’ll only be a small HKD3.5 fee in your bill to pay for.
However, the charges would be a tad bit more for U.S. accounts.
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 for that.
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.
If you want to know more about the withdrawal fees in other countries you’re doing business in, check out this article How to Withdraw Money from PayPal in Every Way Possible we’ve made for you to wrap your head around it.
d. PayPal currency exchange rate in HK
If you’re doing business in other countries, chances are you might need to use different international currencies in your PayPal business account. If your business requires cross-currency trading, then you might need to understand how does 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 exactly the best cost-effective solution for your company, there’s a more affordable alternative that allows you to do the same or even more transaction options at a lower price.
Check out Statry’s payment plan here to get yourself a better deal.
Now that we have the money sorted, how about getting your hands on how it actually works?
How to sign up for a PayPal business account
Setting up a PayPal business account is actually easier than you think. Here, we streamlined the process into an easy 3-step guide for you to get your PayPal business account running.
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 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
Then, go ahead and type in all the basic information, including
- Phone number;
- 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)
Then voila! You’re off to set up the details of your account below.
The remaining part is quite simple - verify your email address then link and verify your bank account. That’s it. And your account is good to go in just a second!
How to use your PayPal business account
One great thing about having a PayPal business account is that you can accept payments in the most flexible way. No matter which accounts your customers hold - Venmo, PayPal Credit, PayPal account, or even some major debit and credit cards companies, the payments can still be accepted.
Another plus is that you can also purchase online either through person or invoice to do that. So, your customers can simply pay in the PayPal account and you can also accept payments from different marketplace including Amazon and others.
And, that’s not it, 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’s 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 interests will be paid by your customer if they pay 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 to a digital business account? Consider opening a business account with Statrys and start making payments purely digitally in under 48 hours.