New PayPal fees could end up costing some streamers a lot more money, especially ones who rely on smaller donations.
Just as the majority of streamers, both big and small, flock to Twitch, most of those who accept donations use PayPal.
Like any business, the payment system needs to turn a profit, which is why every transaction is subject to fees.
PayPal changes donation fees
On August 9, PayPal seemed to update their merchant fees, which streamers are required to use to cash out.
According to streamer LowcoTV, now, if a streamer received a $1 donation from a viewer and use PayPal, they’d only receive $0.48 of that.
Streamers, PayPal has recently increased its transaction fees. A $1 tip will now only net you $0.48. That's right, less than half of a $1 tip actually goes to you.
Please be aware of this when setting tip goals and checking revenue reports! pic.twitter.com/nEgioA1hmY
— Lowco (@LowcoTV) August 9, 2021
If we want to get technical, PayPal used to charge 2.90% of the total amount, plus a $0.30 fee before the change. Now that fee has been reduced to 2.89%, but the added fee has been bumped to $0.49.
So, say a streamer gets a $100 donation. After it goes through PayPal, with the new fees, they’ll only end up seeing $96.62. Not too bad at all, but streamers outside of the most popular ones probably aren’t getting too many $100 donations.
However, PayPal has clarified that these fees will not apply in all scenarios – thanks to Dynamic Micropayments pricing.
In a statement to Dexerto, PayPal explained: “Streamers with a PayPal business account accepting qualifying donations may have higher pricing, but if the transaction is below ~$20, and the merchant has applied and been approved for Dynamic Micropayments pricing for qualifying donations, the transaction rate would be 4.99% + $0.09.
“Therefore, in the case of the $1 example mentioned previously in the article, a streamer would net roughly $0.86, reducing the fees on smaller transactions. For additional clarification, you can go to our blog or US merchant pricing page.”
It’s not only donations either, if Twitch-affiliated streamers choose to get their sub payouts through PayPal.
Possible to cut out PayPal?
So, what can you do if you want to avoid these new fees? If you rely on PayPal and the convenience it provides, then not a whole lot, unfortunately.
But if you want to cut out the middleman, Twitch does give affiliates the option to have the money sent directly to their bank account, or even receive a check by snail mail. Donation services like Stream Elements also have an option to link directly to your account as well.
Though these options might take longer, you won’t be paying an extra fee. PayPal is definitely a lot of people’s go-to, but if you’re a smaller streamer or just starting out, you may want to consider other options to get more of your money.