Anyone using PayPal?

[jinsley]

I am starting to do more and more freelance that is not based locally... I need to set up some kind of payment system that is secure and reliable.

 

I am thinking of using Paypal and issuing invoices through the email system.

 

Does anyone have any experience with them? or can you recommend something better?

 

Any information on this would help as I really have no experience other than receiving cheques or cash in person.

 

Thx in advance...

 

-JI

[Grohu]

Paypal is good for smaller amounts like first pay/advance and etc. They charge quite a lot so I usually take first payment that way and then just wire transfers. Yeah it takes a bit sometimes but as long as clients know what's going on they will work fast in order to have their stuff on time.

[Jeff Mottle]

I use PayPal as the payment system for the CGA store for both direct payments and payments from a PayPal account. I however don't use the standard PayPal payment system as that has some limitations that could be a deal breaker for you:

 

1. There is an approx $1000 lifetime spend limit per credit card unless the card is verified and tied to a bank account. Most clients are not likely to have done this, or want to do this.

 

2. There are caps on the max amount you can charge on PayPal even with a verified account.

 

I use PayPal Website Payments Pro, which is a higher end product they offer. It costs $35/mo, but is a lot more flexible and does not have the above issues if you use the virtual terminal or the API/APN and you can accept payments in different currencies.

 

As a fellow Canadian, I can tell you this however. If you collect your payments in USD, you must have a US based bank account. Even if you have a Canadian based USD account, PayPal will convert it back to CDN$ before they send it to you. You'll lose about 5-7% with all the currency changes. I have accounts with RBC USA (Florida) and Harris Bank (Chicago) and then I write checks on these accounts or wire the money back to my USD account in Canada. Since 9/11, you'll need to get a US Tax ID number before they will open the account for you. If you need more info I can send that to you.

 

If you do more than $15K per month than the rates go down to accept the credit card to around 2.2%. BTW, as Canadian you can not accept AMEX in USD unless you have a US incorporation. You can accept it if they use the PayPal system to pay and opt to use a credit card rather than a PayPal balance, but you still run into the issues with the limits unless the card is verified.

 

Checks from the US are generally fine if they are from a reputable company. I cash US checks all the time. However, depending upon your relationship with your bank they may sometimes put a hold on the deposit for up to 30 days until the funds clear. Wires are always best, but usually cost $15-20 to receive. I have a good relationship with the Royal Bank so they don't hold any of my checks, but this is an client to client, bank to bank situation.

 

If you have any other questions about receiving money from clients outside of Canada, just let me know. I've been doing it for the last 9 years so I've been down all the paths.

 

Oh yeah, you also need to make sure your clients outside Canada don't have a Canadian office, even if you are not dealing with it. If they do, then you must collected GST. Failing to do so means you could get audited and be required to pay the GST and then try to recover the money from the client down the road. A lot of US clients will also ask you to file a W8-BEN to declare you are a foreign company and are subject to the US/Canada Tax treaty and are not subject to withholding.

 

Hope some of this helps.

 

Cheers,

Jeff

[jinsley]

I use PayPal as the payment system for the CGA store for both direct payments and payments from a PayPal account. I however don't use the standard PayPal payment system as that has some limitations that could be a deal breaker for you:

 

1. There is an approx $1000 lifetime spend limit per credit card unless the card is verified and tied to a bank account. Most clients are not likely to have done this, or want to do this.

 

2. There are caps on the max amount you can charge on PayPal even with a verified account.

 

I use PayPal Website Payments Pro, which is a higher end product they offer. It costs $35/mo, but is a lot more flexible and does not have the above issues if you use the virtual terminal or the API/APN and you can accept payments in different currencies.

 

As a fellow Canadian, I can tell you this however. If you collect your payments in USD, you must have a US based bank account. Even if you have a Canadian based USD account, PayPal will convert it back to CDN$ before they send it to you. You'll lose about 5-7% with all the currency changes. I have accounts with RBC USA (Florida) and Harris Bank (Chicago) and then I write checks on these accounts or wire the money back to my USD account in Canada. Since 9/11, you'll need to get a US Tax ID number before they will open the account for you. If you need more info I can send that to you.

 

If you do more than $15K per month than the rates go down to accept the credit card to around 2.2%. BTW, as Canadian you can not accept AMEX in USD unless you have a US incorporation. You can accept it if they use the PayPal system to pay and opt to use a credit card rather than a PayPal balance, but you still run into the issues with the limits unless the card is verified.

 

Checks from the US are generally fine if they are from a reputable company. I cash US checks all the time. However, depending upon your relationship with your bank they may sometimes put a hold on the deposit for up to 30 days until the funds clear. Wires are always best, but usually cost $15-20 to receive. I have a good relationship with the Royal Bank so they don't hold any of my checks, but this is an client to client, bank to bank situation.

 

If you have any other questions about receiving money from clients outside of Canada, just let me know. I've been doing it for the last 9 years so I've been down all the paths.

 

Oh yeah, you also need to make sure your clients outside Canada don't have a Canadian office, even if you are not dealing with it. If they do, then you must collected GST. Failing to do so means you could get audited and be required to pay the GST and then try to recover the money from the client down the road. A lot of US clients will also ask you to file a W8-BEN to declare you are a foreign company and are subject to the US/Canada Tax treaty and are not subject to withholding.

 

Hope some of this helps.

 

Cheers,

Jeff

 

Jeff! Your the man.

 

So sounds to me like taking deposits over Paypal and then having the client wire the remaining funds before sending of their final package is the way to go. I will either include the fee for the wire in the quote or cover it myself depending on the size of the job...

 

I honestly don't know a hell of a lot when it comes to money and handling it as far as a business goes... so I will print this email and take it to the bank with me tomorrow when I go talk to their US/ CAN business expert girl.

 

and thx to Pawel too.

 

Cheers!

 

-JI

[nick2730]

wow great reply jeff