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PayPal Alternatives?

February 21 2011 at 9:58 PM
Earl Strohmeyer  (Login strohman)

We have all discussed the PayPal fees on this forum, but now there is another PayPal issue. If you sell over a certain amount or receive money from 200 transactions in 1 year, they will report this as income to the IRS. I sell all kinds of small items on eBay whenever I can. I'm worried that I could potentially have 200 transactions in 1 year.

At this point I'm thinking that there must be some alternatives to PayPal. Does anyone have any suggestions that they have used?

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(Login FredBear09)

Re: PayPal Alternatives?

February 22 2011, 7:56 AM 

From what I'm reading, the 200 transactions is only part of the requirement. The other piece is that you have to receive $20,000 in payments as a US citizen. If you are from outside the US, nothing is reported. If you receive under $20,000 in payments, nothing is reported. I would say that 200+ transactions totaling more than $20,000 in income indicates a business which should be reporting it anyways (I guess). They are also reporting this as general 'income' which will allow business owners to reduce with 'expenses' and only pay taxes on 'profit'.

That's not to say that we shouldn't be trying to find an alternative to Paypal... When I've searched in the past, though, I've always found that their fees are cheaper than most of the alternatives. Many of the alternatives I've evaluated are also limited in one way or another, either by requiring membership of buyers or locations where it can be accepted, etc.

The 'best' I've read about (never used) is Moneybookers. There are no fees for accepting payments and it is accepted on ebay. The problems, right now, are it costs money to fund (if your bank charges you for international bank transfers or you use a credit card), it costs money to transfer funds out, and it's still not a widely accepted alternative. It also charges the fee (up to $0.68 US) to the sender of the money (buyer), not the receiver (seller). I do not know anything about their track record on buyer/seller protection, etc.

(Login vinnieman)

Re: PayPal Alternatives?

February 22 2011, 12:26 PM 

I wonder how it is in Canada? I buy more than I sell on Ebay so hopefully I would never be put on the spot by the taxman and have to pay taxes on my sales AND purchases. Anybody know how it works up here.

Dan Basso
(Login tripoli99)

since the US gov't is basically bankrupt and

February 22 2011, 1:44 PM 

you can expect IRS or CRA to become more interested in this grey zone of potential taxation, and it will eventually all be taxed if they can get a hold of the data.

Also, to note, in Canada at least, when it comes to taxes you are GUILTY until proven innocent....that is to say, that if CRA sez you made $100,000 in a year, and it would be up to you to prove otherwise, so if you are a high volume (or not) seller, keep track of all your related costs of selling.

(Login billyberu)

Canadian taxes

February 22 2011, 2:46 PM 


I have read some information on ebay sales in Canada and if you sell more than $2000.00 a month on ebay they give the taxman your information. Anything below that and you are probably safe as ebay is not required. That is what I remember so don't quote me on it. If you google it you will get some info. Below is an excerpt fro ma website


In 2006, the Federal Court of Canada authorized the Canada Revenue Agency to require eBay Canada to release information on people who held PowerSeller status in 2004 and 2005. In defense of our members privacy, eBay vigorously contested that decision in the Federal Court of Appeal. However, on November 7, 2008, eBay lost its appeal and was required to release the requested user information to the Canada Revenue Agency.

We alerted all affected members of the outcome of the court proceedings prior to disclosing their court-ordered account information to the CRA. To date, there have been no additional information requests from the CRA.

The court rulings, additional information, and the answers to some commonly-asked questions are posted at

This message has been edited by billyberu on Feb 22, 2011 2:59 PM


Garret Morrison - (Knuckles)
(Login shutoutkings)

Re: PayPal Alternatives?

February 22 2011, 5:02 PM 

If you and the other guy are both in Canada and do online banking you can do an "Interac E-mail Money Transfer". The money just goes directly into your chequing or savings bank account. Can't remember if there's a fee for this, I actually don't think there is..

Garret Morrison

Dan Basso
(Login tripoli99)

intertac email transfer has a $1.50 fee for sender

February 22 2011, 5:12 PM 

The credit unions up here have their own version as well....hyperwallet??? the name escapes me at the moment...
it sure beats paying paypal fees, and then getting screwed again on the exchange rate they use

(Login shiftintermedia)

Re: PayPal Alternatives?

February 22 2011, 6:53 PM Canada we have the option of using online banking to do an "Interac E-mail Money Transfer". The fee to send the moeny is $1.50 and is billed to the sender NOT the seller/receiver and it does not matter what the amount is - however - the limit for sending money via E-Mail Money Transfer is $2000.00 PER DAY. So higher value transcations would have to be done over the course of a few days depending on the amount of the deal. Also, depending on your baking plan you may not be charged a fee for the Email Transfer as my plan allows for 4 free Email Transfers per month.


This message has been edited by shiftintermedia on Feb 22, 2011 6:54 PM


(Login Hockeyaddiction)

Re: PayPal Alternatives?

March 9 2011, 8:58 PM 

ebay only allows paypal as payment now right?

Dan Basso
(Login tripoli99)

no not at all,....

March 9 2011, 9:03 PM 

I just sent a US bank draft to a seller in the USA.....I explained to him, if he was to pick up the postage, about $20, I would send him a bank draft, because it's cheaper than Paypal';s FX rate for me, and he doesn't have to pay any paypal fees....he thought about it awhile, and then sent me an adjusted invoice as we had discussed earlier. So sending from Canada, I was able to get a better FX rate, $1.03 in postage...and perhaps I have to wait a few days extra, but that's better than ebay getting more of my money without doing anything to earn it.

Earl Strohmeyer
(Login strohman)

Re: PayPal Alternatives?

March 9 2011, 9:41 PM 

I'm still in the U.S. and most of the suggestions were for Canadian collectors. What other alternatives are there for collectors in the US?

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