I received some excellent questions and comments on my last post, Accepting Credit Cards, including several sent to me by email. Today I will answer those questions.

I’ve used PayPal as a consumer infrequently, so I have an account. Can that same account be used as vendor?

You can receive funds in a personal PayPal account, but there are restrictions that do not apply to business accounts. In addition, since the transaction fee that’s deducted when someone pays you by credit card or debit card are much higher on a personal account, it’s worth it to upgrade to a Premier or Business account.

Another reason to open a PayPal Business account is the fact that funds can only be transferred from a personal PayPal account to a personal bank account, or from a business PayPal account to a business bank account. For bookkeeping purposes, and in case of a tax audit, it’s recommended that you always keep your personal and business accounts separate.

How have you found cross-border sales?

I have a number of clients in the US, and I find that PayPal is the fastest and easiest way to receive payment. Instead of waiting for a check to arrive in the mail, lining up at the bank, waiting for the customer service rep to work out the exchange rate, and hoping the payment clears, I am paid within minutes and can transfer the funds to my bank account whenever I want, without having to leave my office. They recommend allowing 5 to 7 days for a transfer to go through, but in my experience, it usually only takes a couple of days.

Are the fees for Canada the same as the US?

Essentially, yes. The fee on an incoming payment of $3000 or less is 2.9% of the transaction amount, plus 30 cents. The percentage is reduced on larger transactions, but the 30 cents remains constant.

Please note that the above information is current at the time of writing, but you should check the PayPal website for changes that may be implemented at any time. Of course, once you have an account, you’ll be notified by email of any changes that may affect you.

Thanks again to those of you who submitted questions. If you have any other questions about PayPal or any other topic related to your organizing business, I’d love to hear from you!