Paypal who pays who?

[JoaoJose]

Hi there.

I'm starting selling some widgets on one of my sites. Payment will be made through paypal. My question is who will pay who? As I see it the buyer pays paypal and than paypal pays me, so there is no direct transaction between the seller and the buyer.

Also for payments made in Europe who handles them? US Paypal? I'm asking this for taxes puposes.

Thanks in advance.

[Essex_boy]

Your right to the first question, paypal ensures that you never see the buyers detaild.

On teh second one see an accountant

[JoaoJose]

Yes I will see my accountant but first I have to understand how this works...

I guess the paypal payments to my account will be similar to adsense payments. My doubt is if the payments will be made by Paypal Europe or Paypal US. I ask this because the tax rules are different depending on the origin of the payment.

Also, will paypal issue a receipt and send it to the buyer?

[Essex_boy]

Paypal send a payment receipt to the buyer, I suspect that the payments come from USA.

[jwolthuis]

Your customers pay you directly. You can choose which of six currencies you will accept, and payment is made directly to your PayPal account in one of those currencies. Your customers can choose to pay you in any of your accepted currencies, from their PayPal account, credit card, e-check, or ACH debit.

PayPal pays you these funds minus a service charge, determined based on your monthly volume, your country, and your customers country. Inter-country payments have a higher cost (service charge).

[JoaoJose]

Your customers pay you directly.

Don't they pay paypal and then paypal pays me?

If paypal is issuing a receipt for what they get that means the customer is paying paypal and then paypal pays me. Otherwise I would have to issue a receipt to my client.

Understanding this is very important. Also knowing where the money I get comes from is quite important. Taxes applied on EU money are quite different from overseas money.

I'll email paypal to check this out.

[jwolthuis]

That's just symantics. You could use the same word games with Visa, "customer pays Visa, and Visa pays the merchant". But since Visa involves thousands of banks, gateways, and communication networks, I'm not sure what question you'd be trying to answer.

The "receipt" question is really easy to test out for yourself. Simply buy something using your PayPal account, and view the "receipt" you receive. It's little more than a payment notification.

In theory, it's possible to include item-level detail, tax, and shipping costs inside PayPal's receipt, but that's up to the store developer to transmit that information to PayPal. In practice, it's rarely done.

[shigamoto]

When logging in to PayPal check the copyright information below. If you are in Europe it says something like PayPal bla bla United Kingdom la la. Which means that your account is based in the UK. There is also an UK FSA number.

[JoaoJose]

Thank you all for your answers, I think I got it. In the meantime I actually emailed paypal and had taste of their dreaded customer support.