PayPal or credit card payment for final balance

[alir]

Please can anyone advise? I have tried to read up on this but am just getting more confused.
We normally take bank transfer or UK cheque for UK guests booking our place in Lapland.
We have now had a request to pay by PayPal or credit card. The guest says that if she pays as a gift by PayPal there will be no fees. I do have a personal PayPal account but only use it for Internet shopping , not for anything to do with our rental property, so I don't really understand everything about it.
Is the guest correct? If so, as a one off payment, would her suggestion work? Are there any fees in this situation, are there any risks to us, anything else we should be aware of?
Also, we take a refundable security deposit with the final balance, should we take through PayPal too or not?
We are with Owners Direct ( at the moment at least!) so we could offer their online payment with credit card but there would be a fee for the guest to pay
Thanks

[Hells Bells]

In this instance, if it is not within your normal payment terms, I would decline the Paypal payment. Yes, there are no fees to you associated with a personal payment, but it is not really meant for business transactions. OD will keep your money until your guest arrives.

[kevsboredagain]

As Helen say there will be fees with Paypal of roughly 3.5%. You could offer to take payment if they are willing to pay the fees. I would not risk your account pretending that a business transaction is a gift. Paypal are infamous for blocking accounts on the slightest suspicions.

The refundable deposit though is different. If a transaction is refunded within 60 days, the fees are also refunded. Very handy for deposits.

[alir]

Thanks both. Perhaps we should try again to convince them to pay by bank transfer.
OD fees for CC are lower than paypal but I see that they hold onto payment until after the start of the guests stay.

[Essar]

They may want to use PP because they believe they are protected if they use a credit card - they're not. As PP act as an interim payment agent the CC payment is with PP and not with you. PP protection also does not apply for a remote service payment.

Although, the fees could be waived by PP if the guest stipulates that the payment is a gift - this could work for a one-off like this - but PP's doubts maybe raised by the amount involved. Otherwise PP will charge you the service fee; for UK to UK this is 3.4% plus 20p, for Europe to UK this 3.9% plus 20p. If you or the guests are willing to pay these fees, the simplest way is for you to raise a PP invoice for rental (& extras) using the guests email address. They simply "pay" the invoice throught their PP account or with a CC/DC if they don't have a PP account. All monies are immediately in your account and you can withdraw them into your own bank account straight away.

[Peggymac]

They may want to use PP because they believe they are protected if they use a credit card - they're not. As PP act as an interim payment agent the CC payment is with PP and not with you. PP protection also does not apply for a remote service payment.

This has now changed Essar. PayPal announced this in April .

http://www.ecommercebytes.com/C/blog/bl ... 06550.html


PayPal is extending its buyer protection to cover intangible goods, including digital goods and services. Like many payment services, PayPal currently offers protection only for purchases of physical goods, so it's a very big move.
In PayPal's announcement this morning (Apr 30 2015), it said beginning July 1, 2015, "if you pay for a service or digital product using PayPal and it is significantly different from how it was described, or you pay for one of these items and it is not delivered, PayPal will ensure that the money is credited back to your account."
PayPal said services include such things as hotel stays (presumably that includes purchases of airline tickets or services such as Uber).

[Essar]

Peggymac - good news about PP at last. Thanks for the update.

[visitslovenija]

I would suggest you open a new PayPal account solely for the business. It doesn't cost anything and you can customise it to give a professional look to the guest. Withdrawing funds to your UK bank account is also easy - and free I think.

Then, as already mentioned, you can send an Invoice for the amount to the guest and they can pay by credit card or PayPal. And, if you time the payment collection right, you can refund the deposit for no fee within 60 days. I usually itemise it separately on the invoice.

I also agree you should avoid the 'friends no fee' route as it may cause you problems.

Although PayPal can be awkward sometimes, I think it is easier and cheaper than handling bank deposits and payments for refunds, and in your case here, these would be international.

Ralph

[alir]

Thanks, I'll investigate this option further too. Bit reluctant to let OD hold onto the money for so long.

[visitslovenija]

You do have to pay the PayPal commission for handling the payment of 3.5% (it was possible to get this reduced to 1.4% if you linked your PayPal account to Holiday Lettings, but not sure if this still works).

But you can either charge this fee as a line item to the guest or just up your prices slightly to compensate.

[Nemo]

Just a further key bit of information regarding Paypal buyer protection. It only applies if the service is paid for in one payment, so the guests do not have buyer protection if they paid in instalments - i.e. a deposit and a balance.

13.4 Conditions for reimbursement

You may be reimbursed under PayPal Buyer Protection for a problem with a purchase only if all of the following requirements are met:

a) Your purchase is an eligible purchase. Purchases of most goods and services are eligible (including travel tickets, intangible items such as rights of access to digital content and other licences), except for:

b) You sent the payment for your purchase from your PayPal Account to the Payment Recipient’s PayPal Account:
1) through the Send Money tab applicable to payments for goods and/or services on the PayPal website or app, or the Payment Recipient's PayPal checkout flow (including, without limitation, the PayPal Location Based Payments Functionality, if used by the Payment Recipient); and
2) in one instalment only. Purchases paid for in multiple instalments – like a deposit followed by a final payment – are not eligible.

[greenbarn]

Just a further key bit of information regarding Paypal buyer protection. It only applies if the service is paid for in one payment, so the guests do not have buyer protection if they paid in instalments - i.e. a deposit and a balance.

13.4 Conditions for reimbursement...........

one instalment only. Purchases paid for in multiple instalments – like a deposit followed by a final payment – are not eligible.

Didn't know that.
That is a huge difference from the protection provided using a credit card directly (ie not via Paypal) whereby even if you only pay a part of the amount (eg deposit) with the card and the rest by another means the whole amount is still covered by the card issuer.

Given that the vast majority of holiday bookings will have multiple payments, it seems that Paypal offer no protection at all to guests - just a convenient method of paying.

[Essar]

You do have to pay the PayPal commission for handling the payment of 3.5% (it was possible to get this reduced to 1.4% if you linked your PayPal account to Holiday Lettings, but not sure if this still works).

The HL/PP special arrangement only applies to existing subscription listings taken out prior to Sept 2014 (you can keep renewing to keep this facility). For new subscriptions it does not apply - HL charge 3%+Vat for payment collection and transfer.