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PayPal Connect

In this commodity:

Countries eligible
Context
What this means for you
Residual Folio
Refunds
Chargebacks
Taxation and Compliance
VAT and PayPal Connect
Affiliates and PayPal Connect
Privacy
NSFW Accounts
PayPal Business relationship Nether Review
Disconnecting Your PayPal Business relationship
Often Asked Questions

Countries eligible

PayPal Connect is bachelor to all creators from countries where PayPal operates, except Brazil, India, Israel, Japan, Micronesia, and Turkey.

Now if you're from Brazil, India, Israel, Japan, Micronesia, or Turkey and starting to think that at that place's no way for you to go paid on Gumroad and then better starting time looking for other options: WAIT!! Only 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 y'all make direct in your PayPal account. No waiting till Fridays to get the coin every bit is the case for card related sales. Merely for creators from countries where PayPal Connect is not available — your customers will be able to purchase your products via PayPal and you will get 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 us to use our (Gumroad'south) account to process payments on your behalf until PayPal Connect becomes available in your country. They might revoke this access some day just let'south not worry about information technology until it happens.

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

Context

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

As of January one, 2021, PayPal changed the construction of their merchant accounts, and now require all eligible Gumroad creators to connect their PayPal and Gumroad accounts, in order to permit customers to purchase through PayPal.

What this means for you

Every bit a creator, you lot accept two options. You can either do cipher, or you can cull to re-enable PayPal, connected to your own business relationship.

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

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

To permit your customers to apply PayPal, you must connect your own account in the Payments settings tab

Option ane: Exercise Nothing

If you cull non to connect your PayPal account, nothing will change from your perspective. Your Gumroad user experience will remain entirely unchanged. The only departure will be customer-facing: your audience will non take the option to utilise PayPal to purchase your products and memberships.

Depending on your audience, this may take a material negative upshot on your conversion rates. Approximately 38% of purchases on Gumroad are fabricated with PayPal, though nosotros practice not know what percent of those customers would take yet made a purchase if PayPal was not an option. You know your item audience better than we do, simply for most creators nosotros recommend taking action to keep PayPal as an option for your customers.

Option 2: Connect your Own PayPal Account

If you desire to requite your audition the choice to use PayPal at checkout, nosotros've fabricated it every bit uncomplicated every bit possible to connect your PayPal account to Gumroad.

You will take to connect your PayPal business relationship on the payments settings page (delight note that this isdifferentthan the payouts settings folio).

For sales via Paypal Connect, the fee structure is slightly different than not-PayPal sales: The fees starts at 7% + PayPal'due south fee (varies state-to-country), then drops to 5% + PayPal's fee after yous earn $1,000, 3% after $ten,000, 1% afterwards $100,000 and goes to 0.nine% afterward $1,000,000 in lifetime revenue on Gumroad.

In case you are on our old (now deprecated) fee structure: Purchases made through PayPal will be charged ane% by Gumroad, instead of our usual 3.5% + thirty¢ for Pro accounts (or 6% instead of 8.5% + 30¢ for non-Pro accounts), in improver to whatsoever fees PayPal charges.

If y'all're in the The states, PayPal lists its fees for domestic transactions and international transactions. If y'all're exterior the Usa, find PayPal's fees for your country on this list.

Once you lot connect your PayPal business relationship, you'll also notice that PayPal payments to y'all will be instant. Any fourth dimension a client buys a product from you using PayPal, the money shows up in your PayPal business relationship.

Pros of PayPal Connect

Money is paid out instantly into your PayPal account, and so you become the revenues from some of the sales sooner
Yous are paid out in the default currency of your PayPal business relationship, rather than in USD.
Continue offering your customers multiple payment options.
Authorize for PayPal'southward micro-payments rate of 5% + 5¢ on advisable transactions.
High-earning creators may be able to negotiate their own bulk payment processing discount directly with PayPal.

Cons of PayPal Connect

Slightly college total transaction fees
Requires you to have a onetime action to connect Gumroad and PayPal, and once the accounts are connected you'll want to brand sure you are incorporating PayPal funds into your cashflow arrangement.
If your products violate PayPal's ToS, they may ask that you not use PayPal Connect.

Balance Folio

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

And so, to analyze, what looks suspiciously similar a fee is only a debit. You have already received this money — information technology was sent to your PayPal account right after the sale happened during that calendar week, thus information technology is not being paid out to yous this Friday.

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

Refunds

With PayPal connect, you are still able to refund customers following the normal steps in your customers tab. You just have to ensure that there is enough residue in your PayPal business relationship to procedure the refund. Issuing a full refund to a client returns 100% of their money to them. We volition refund our fees and VAT (if whatever) to them out of our accounts.

You will be responsible for paying PayPal's fees on refunds - Gumroad will not be able to manage those on refunds that are issued to PayPal customers.

Chargebacks

Different disputes on card related sales, with PayPal Connect, you are in accuse of treatment your own chargebacks. You can go here for more information or reach out to the PayPal back up team for farther assistance.

Tax and Compliance

PayPal Connect does not materially touch on revenue enhancement or compliance for creators. More specifically:

Gumroad'due south approach to sales revenue enhancement is unchanged
The Sales CSV download has 2 additional columns, one to determine whether the sale was via PayPal, and some other to show the fees nerveless by PayPal.
The Payouts CSV, which can be downloaded from the Balance page, will accept an additional row to evidence the internet amount already credited to your PayPal account.
Gumroad still serves as the Merchant of Record in jurisdictions where that matters
Gumroad is however considered the seller for VAT purposes and will continue to collect and remit VAT in the appropriate jurisdictions

VAT and PayPal Connect

When you brand a sale that is subject area to VAT and client pays with PayPal, VAT is added to your transactions nether the field "Sales Tax" or "VAT", and so deducted as part of the "Partner Commission" in the transaction shown on your PayPal account considering nosotros remit the VAT to the EU on your behalf.

For example, a creator with a Premium business relationship would see a 24% "Partner Commission" line item. Gumroad keeps our 1% and and then remits the remaining 23% to the advisable regime equally VAT.

The amount breakdown in your PayPal receipt will look something like this:

VAT Refunds

Customers tin can claim a VAT refund if they have a European union Business VAT ID. When they merits a refund, yous 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'due south (your) cyberspace credit amount in PayPal? From the perspective of your PayPal account, it sure looks like the heir-apparent'south VAT refund is coming out of pocket. Merely, information technology'due south not. Let us explain.

Due to limitations in PayPal'due south API, it does not permit us to refund the entire refund amount from Gumroad'due south share (like we tin for bill of fare-related sales via Stripe). Basically, through the API, Gumroad can only contribute a smaller portion to the refund, and and so must deduct the remaining corporeality from the seller'south PayPal account. We then immediately auto-credit the seller's portion of the refund to their Gumroad account balance to make adept of the VAT debit. Yous'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 back in your Gumroad account -- fifty-fifty-steven.

Affiliates and PayPal Connect

When i of your affiliates helps you make a sale and the client pays with PayPal through PayPal Connect, the affiliate fee is deducted equally function of the "Partner Commission" in the transaction equally it shows on your PayPal account. For example, if a creator with a Premium account is paying a 50% chapter committee, they would run into a 51% "Partner Commission" line item. Gumroad keeps our i% and so passes the remaining 50% to the affiliate equally part of their weekly payout.

Privacy

For PayPal Connect sales, your customers volition exist able to run into the personal information fastened to your PayPal account like name and email in their transaction details. If you lot don't wish to share your personal info, a workaround would exist to create a "Concern" PayPal account so that your customers tin can only come across your company name and email. If you lot can't create a business business relationship for some reason, the only option would be to disconnect your PayPal business relationship.

For further clarity: Here's a screenshot of what your customers will see in their PayPal dashboard for the purchase, and here's a screenshot of what you (creator) will see on your PayPal dashboard for the sale.

NSFW Accounts

If you sell NSFW products online, you are probably aware that PayPal'south approach to developed products is different than ours (TL,DR; we're a lot more lenient than they are). By choosing to use PayPal Connect, your products may come under the purview of PayPal's own risk reviews, which we don't have transparency into and cannot oversee. In curt,nosotros don't know if PayPal volition allow yous to sell NSFW products through Gumroad and PayPal Connect.

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

PayPal Account Under Review

In some rare cases, PayPal might put your earnings nether hold in the initial days of getting straight credited to your PayPal business relationship for your sales. PayPal says they do this to investigate the sudden stream of incoming funds, and is part of their diverse adventure mitigation processes. If this happens to you, delight make it touch with PayPal back up and give them all the details they might require to complete their investigation. If they ask for proof of commitment, you lot tin tell them that it's a digital production. Your funds volition be released back once your business relationship is through the scrutiny.

Disconnecting Your PayPal Account

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

However, please annotationthat you lot cannot disconnect your PayPal account if there are whatever 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 usa to.

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

Another alternative would exist to get to your PayPal account and revoke Gumroad'south access from inside PayPal. However, please notation that doing this will pb to failure of all the agile membership renewals and any pre-orders from this PayPal account.

Oft Asked Questions

Q: Volition the payment come directly from customer'southward PayPal to my PayPal? If yeah, how does Gumroad have its fee and VAT (wherever applicative)?
A : The payment comes directly from the customer's PayPal account. Gumroad won't be mentioned in your PayPal dashboard. Gumroad is still able to collect its fee, VAT, and serve equally the Merchant of Record considering we are still processing the transaction for you lot and your audience. European union creators can utilise the CSV, Payday e-mail or Residue statement for accounting purposes.

Q: If I do non wish to connect my PayPal business relationship, volition my old/existing membership subscribers who are already paying with PayPal demand to update their payment to a bill of fare?
A: No. The direct PayPal integration, which comes in effect on Jan 1, 2021, is a new "agreement". Pre-existing customers will not get affected as they started making recurring payments to us under a separate set of terms. Still, if the sometime membership gets cancelled for any reason, those customers will not exist able to restart the old membership with PayPal. They'll have to re-subscribe to your membership equally a new buy with a card.

Q: In what currency will I be paid?
A: Payouts in the new PayPal system will be in default currency of creator's PayPal business relationship, irrespective of what display currency they set for their product on Gumroad (until now, all transactions happen in USD irrespective of what display currency is set on Gumroad). However, the payout electronic mail will display all the amounts in USD.

Q: Will Affiliate commissions be paid out instantly?
A: No. When your affiliates help you make a sale and a client pays via PayPal with PayPal Connect enabled, the affiliate's committee will be bundled into their weekly payout as normal.

Q: Ugh. I'g so silly. I disconnected my PayPal Connect, then tried to re-connect it and information technology won't connect like earlier! What practice I practise?
A: Sometimes this happens. You will need to contact PayPal in this case. Likely, everything is fine within your Gumroad account. However, for some reason your 'payments receivable' in your PayPal account likely has gotten set to 'simulated'. This means your PayPal account would exist stopping you from re-connecting. Please contact PayPal Support to resolve this verification issue within your PayPal account. Afterwards, come up dorsum to Gumroad and enter the email again to successfully reconnect your PayPal Connect.

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