Hi Ron,
PayPal does not charge a fee to either buyer or seller. I believe they make their money off the "float" -- essentially, they have use of the money from the time at which the cc company pays them until the funds are withdrawn from their system. I don't know how others are using their system, but I've left a small balance with them to fund modest impulse purchases. Since they do not pay interest, they have full use of those funds to invest, earn interest themselves, etc.
The closest thing they have to a "hidden fee" is the fact that the minimum they will charge to your cc is $5. Say, for example, you want to pay someone $2. They will charge your cc for $5, pay the $2, and leave $3 in your account. Continuing with this example, say you next want to send someone $20. They take the $3 from your account & charge your cc for $17.
Mike, to date, I've withdrawn funds four times via direct deposit to my bank and there was no fee subtracted by PayPal. Even more amazing is the fact that my bank did not charge a fee for the direct deposit either. I say amazing because I've had money "wired" to me on several occasions & my bank always takes their pound of flesh. Considering the fact that they charge for just about everything else, either the PayPal transfers somehow slipped under their radar or they may even have a special arrangement with my bank. In any case, I wouldn't be surprised to see a fee imposed in the future but so far so good.
Just to clarify my recommendation of PayPal for small dealers, I didn't mean to suggest that it is a perfect solution. Although it works for online transactions, it does require that your buyers take the time to set up an account with them -- something that everyone will not be willing to do. Also, as PayPal is currently configured, it is not a solution for phone orders or trade show sales. As I said earlier, I think it could be a good "toe in the water" approach for you to see if the volume of your cc sales would justify the expense of opening a merchant account.
BTW, the client I mentioned has decided not to use PayPal to pay for the seminar, probably meaning the typical 60-90 wait for my money.
I found the information that
PayPal provides to be fairly straight forward; however, as with anything else having to do with money, it's important to read & understand all the fine print.
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Cheers,
--+
Brian+--
He who finishes with the most toys wins.