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PayPal Connect

Countries eligible

PayPal Connect is bachelor to all creators from countries where PayPal operates, except Brazil, Republic of india, Israel, Nihon, Micronesia, and Turkey.

Now if you're from Brazil, India, Israel, Japan, Federated states of micronesia, or Turkey and starting to call up that in that location'due south no way for you lot to get paid on Gumroad and then better first looking for other options: WAIT!! Merely PayPal Connect is not available to you, PayPal is!

PayPal Connect is where you integrate your PayPal account with Gumroad, and get instant credit for the auction you make direct in your PayPal account. No waiting till Fridays to get the money as is the case for card related sales. But for creators from countries where PayPal Connect is not available — your customers will be able to purchase your products via PayPal and you will go paid via PayPal for those sales according to our weekly payout schedule. Just like card sales.

In other words, the generous folks at PayPal immune united states to use our (Gumroad'due south) account to process payments on your behalf until PayPal Connect becomes available in your land. They might revoke this access some mean solar day simply allow's not worry virtually it until it happens.

For creators from other (supported) countries, keep reading on to know how PayPal Connect affects you.

Context

From 2015 - 2021, if one of your customers bought your product using PayPal, the coin went into your Gumroad balance. The money from the sale so sat at that place for at least 7 days, and then was sent on Fridays to your bank account or your PayPal account (depending on your geographic location).

Every bit of Jan 1, 2021, PayPal inverse the construction of their merchant accounts, and now require all eligible Gumroad creators to connect their PayPal and Gumroad accounts, in order to let customers to buy through PayPal.

What this means for you lot

Every bit a creator, you have two options. You can either practise nothing, or you can cull to re-enable PayPal, connected to your own business relationship.

By default, all customers tin can pay using credit/debit cards (i.e. Stripe)

By default, customers do non accept the ability to pay using PayPal.

To allow your customers to use PayPal, y'all must connect your own account in the Payments settings tab

Choice 1: Do Nothing

If you cull non to connect your PayPal business relationship, zilch will change from your perspective. Your Gumroad user experience will remain entirely unchanged. The only difference will be customer-facing: your audience will not take the option to use PayPal to purchase your products and memberships.

Depending on your audience, this may have a cloth negative effect on your conversion rates. Approximately 38% of purchases on Gumroad are made with PayPal, though we do non know what percentage of those customers would have still made a purchase if PayPal was not an choice. You know your particular audience ameliorate than we do, but for most creators we recommend taking activeness to continue PayPal as an option for your customers.

Option 2: Connect your Own PayPal Account

If yous want to give your audience the option to apply PayPal at checkout, we've fabricated it as simple as possible to connect your PayPal account to Gumroad.

You volition accept to connect your PayPal account on the payments settings page (delight annotation that this isdifferentthan the payouts settings page).

For sales via Paypal Connect, the fee construction is slightly different than non-PayPal sales: The fees starts at vii% + PayPal's fee (varies country-to-country), then drops to 5% + PayPal's fee later on you earn $1,000, 3% after $ten,000, 1% after $100,000 and goes to 0.ix% after $1,000,000 in lifetime acquirement on Gumroad.

In example you are on our old (now deprecated) fee structure: Purchases fabricated through PayPal will be charged 1% by Gumroad, instead of our usual three.5% + thirty¢ for Pro accounts (or half dozen% instead of 8.5% + thirty¢ for non-Pro accounts), in addition to any fees PayPal charges.

If y'all're in the United states of america, PayPal lists its fees for domestic transactions and international transactions. If you're exterior the U.s.a., detect PayPal's fees for your country on this list.

Once you connect your PayPal account, you'll also detect that PayPal payments to you will be instant. Whatever fourth dimension a customer buys a production from you using PayPal, the coin shows up in your PayPal business relationship.

Pros of PayPal Connect

Coin is paid out instantly into your PayPal account, so you go the revenues from some of the sales sooner
You are paid out in the default currency of your PayPal account, rather than in USD.
Continue offering your customers multiple payment options.
Qualify for PayPal'due south micro-payments rate of v% + 5¢ on appropriate transactions.
High-earning creators may be able to negotiate their own bulk payment processing discount directly with PayPal.

Cons of PayPal Connect

Slightly higher full transaction fees
Requires you to take a one-fourth dimension activeness to connect Gumroad and PayPal, and once the accounts are connected you lot'll want to brand sure y'all are incorporating PayPal funds into your cashflow system.
If your products violate PayPal's ToS, they may enquire that you not utilize PayPal Connect.

Balance Folio

On the balance page, we bear witness your full sales, and then decrease any sales already paid out instantly to PayPal (under the header "PayPal Payouts" header) to bear witness the cyberspace amount that yous receive in your weekly payout. PayPal payments are shown in USD as all transactions on Gumroad are processed in USD.

So, to clarify, what looks suspiciously similar a fee is simply a debit. Yous have already received this money — it was sent to your PayPal account correct after the sale happened during that week, thus it is non being paid out to you lot this Friday.

Payout Electronic mail

Similarly, the payout email focuses on the cyberspace corporeality just includes your gross sales and subtracts money already paid out to you though PayPal Connect.

Refunds

With PayPal connect, you are nevertheless able to refund customers post-obit the normal steps in your customers tab. You lot just have to ensure that in that location is plenty residuum in your PayPal business relationship to process the refund. Issuing a full refund to a customer returns 100% of their money to them. We volition refund our fees and VAT (if any) to them out of our accounts.

Yous volition exist responsible for paying PayPal'south fees on refunds - Gumroad will not exist able to manage those on refunds that are issued to PayPal customers.

Chargebacks

Unlike disputes on card related sales, with PayPal Connect, yous are in charge of handling your own chargebacks. You can go here for more information or reach out to the PayPal back up squad for farther assistance.

Taxation and Compliance

PayPal Connect does not materially impact tax or compliance for creators. More specifically:

Gumroad's approach to sales tax is unchanged
The Sales CSV download has ii additional columns, one to make up one's mind whether the auction was via PayPal, and another to show the fees collected by PayPal.
The Payouts CSV, which can be downloaded from the Rest page, will take an additional row to show the net amount already credited to your PayPal account.
Gumroad still serves as the Merchant of Record in jurisdictions where that matters
Gumroad is notwithstanding considered the seller for VAT purposes and volition go on to collect and remit VAT in the appropriate jurisdictions

VAT and PayPal Connect

When you make a sale that is subject area to VAT and client pays with PayPal, VAT is added to your transactions nether the field "Sales Revenue enhancement" or "VAT", and and so deducted as function of the "Partner Commission" in the transaction shown on your PayPal account considering we remit the VAT to the Eu on your behalf.

For case, a creator with a Premium business relationship would see a 24% "Partner Commission" line item. Gumroad keeps our i% and then remits the remaining 23% to the appropriate authorities as VAT.

The amount breakup in your PayPal receipt will await something like this:

VAT Refunds

Customers can merits a VAT refund if they have a Eu Business concern VAT ID. When they claim a refund, you might see a debit in your PayPal account equivalent to the VAT amount. This surely seems odd. Did Gumroad just deduct the VAT amount from the seller's (your) net credit amount in PayPal? From the perspective of your PayPal account, it sure looks like the buyer'due south VAT refund is coming out of pocket. Only, it's not. Let us explicate.

Due to limitations in PayPal's API, it does non allow united states to refund the entire refund amount from Gumroad'due south share (like we tin can for card-related sales via Stripe). Basically, through the API, Gumroad can simply contribute a smaller portion to the refund, and then must deduct the remaining amount from the seller's PayPal account. Nosotros then immediately machine-credit the seller's portion of the refund to their Gumroad account balance to make good of the VAT debit. You'll see this credit on your balance page. (Continue in mind, the credit will appear/paid out on the next available payout scheduled.) In summary, what we deduct from PayPal, we credit dorsum in your Gumroad account -- even-steven.

Affiliates and PayPal Connect

When i of your affiliates helps you make a auction and the customer pays with PayPal through PayPal Connect, the affiliate fee is deducted equally office of the "Partner Committee" in the transaction equally it shows on your PayPal account. For example, if a creator with a Premium business relationship is paying a 50% affiliate commission, they would see a 51% "Partner Committee" line item. Gumroad keeps our one% and so passes the remaining 50% to the affiliate as function of their weekly payout.

Privacy

For PayPal Connect sales, your customers will exist able to see the personal data attached to your PayPal business relationship like proper noun and electronic mail in their transaction details. If you don't wish to share your personal info, a workaround would exist to create a "Business" PayPal account and so that your customers can only meet your visitor name and email. If you tin can't create a business account for some reason, the merely option would be to disconnect your PayPal account.

For farther clarity: Hither's a screenshot of what your customers will run across in their PayPal dashboard for the buy, and hither'due south a screenshot of what y'all (creator) will see on your PayPal dashboard for the auction.

NSFW Accounts

If you sell NSFW products online, you lot are probably aware that PayPal'southward approach to adult products is different than ours (TL,DR; we're a lot more lenient than they are). By choosing to employ PayPal Connect, your products may come under the purview of PayPal's ain chance reviews, which we don't have transparency into and cannot oversee. In short,we don't know if PayPal will allow you to sell NSFW products through Gumroad and PayPal Connect.

If your Gumroad products violate PayPal's terms of service, and you are concerned that PayPal may penalize you, yous may want to not connect your PayPal account, and continue processing your sales through credit and debit cards.

PayPal Account Nether Review

In some rare cases, PayPal might put your earnings under concur in the initial days of getting straight credited to your PayPal account for your sales. PayPal says they do this to investigate the sudden stream of incoming funds, and is part of their various risk mitigation processes. If this happens to yous, please arrive touch with PayPal support and give them all the details they might crave to complete their investigation. If they enquire for proof of commitment, you tin can tell them that it's a digital production. Your funds will be released dorsum once your account is through the scrutiny.

Disconnecting Your PayPal Account

You can disconnect your PayPal account from the same page that you used to connect it in the first identify: https://gumroad.com/settings/payments

However, please notethat you cannot disconnect your PayPal account if there are whatsoever active memberships or pre-orders authorized through the existing PayPal Connect account. We cannot manually override this setting, or transfer your customers to a different PayPal Connect account, simply because PayPal won't allow us to.

If y'all still wish to disconnect your PayPal account, you volition have to beginning cancel all the existing memberships and pre-orders that are connected to this account and only so will you be able to disconnect your account.

Another culling would be to go to your PayPal account and revoke Gumroad'southward access from within PayPal. All the same, please annotation that doing this will atomic number 82 to failure of all the agile membership renewals and whatever pre-orders from this PayPal account.

Frequently Asked Questions

Q: Will the payment come directly from client'southward PayPal to my PayPal? If aye, how does Gumroad take its fee and VAT (wherever applicable)?
A : The payment comes direct from the customer'due south PayPal business relationship. Gumroad won't be mentioned in your PayPal dashboard. Gumroad is still able to collect its fee, VAT, and serve as the Merchant of Record because we are still processing the transaction for you and your audition. EU creators tin can use the CSV, Payday email or Balance statement for accounting purposes.

Q: If I practise non wish to connect my PayPal account, will my old/existing membership subscribers who are already paying with PayPal demand to update their payment to a card?
A: No. The directly PayPal integration, which comes in effect on Jan i, 2021, is a new "agreement". Pre-existing customers volition not get affected as they started making recurring payments to u.s. under a carve up set of terms. However, if the former membership gets cancelled for any reason, those customers will not be able to restart the old membership with PayPal. They'll have to re-subscribe to your membership as a new purchase with a menu.

Q: In what currency will I exist paid?
A: Payouts in the new PayPal arrangement will be in default currency of creator's PayPal account, irrespective of what brandish currency they set for their product on Gumroad (until at present, all transactions happen in USD irrespective of what display currency is prepare on Gumroad). However, the payout email will display all the amounts in USD.

Q: Will Chapter commissions exist paid out instantly?
A: No. When your affiliates help yous make a sale and a customer pays via PayPal with PayPal Connect enabled, the affiliate's commission volition be arranged into their weekly payout as normal.

Q: Ugh. I'm so featherbrained. I disconnected my PayPal Connect, and then tried to re-connect information technology and it won't connect like before! What do I do?
A: Sometimes this happens. You will need to contact PayPal in this example. Likely, everything is fine within your Gumroad business relationship. However, for some reason your 'payments receivable' in your PayPal account likely has gotten set up to 'false'. This ways your PayPal account would be stopping you lot from re-connecting. Please contact PayPal Support to resolve this verification issue within your PayPal business relationship. Later, come dorsum to Gumroad and enter the electronic mail again to successfully reconnect your PayPal Connect.

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Source: https://help.gumroad.com/article/275-paypal-connect