Depop Payments vs PayPal for Sellers: A Detailed Comparison

As an online seller, choosing the right payment processor can have a big impact on your profits and operational efficiency. Depop’s integrated payment system and PayPal are two of the most widely used options for sellers on Depop. In this comprehensive guide, we’ll explore the key differences, pros and cons, and use cases for Depop Payments and PayPal to help you determine the best choice for your Depop business.

Overview of Fees

One of the most important factors when evaluating a payment processor is the fees involved with processing transactions. Here is an overview of the standard transaction fees charged by Depop Payments and PayPal:

Processor Fee
Depop Payments 2.9% + $0.30 per transaction
PayPal 2.9% + $0.30 per transaction (personal)
2.4% + $0.30 per transaction (business)

Based on the standard rates above, Depop Payments and PayPal charge identical fees for personal accounts at 2.9% + $0.30 per transaction. However, PayPal offers a reduced 2.4% + $0.30 transaction fee for business accounts.

This means high-volume sellers on Depop who process over $10,000 annually can save an average of 0.5% per transaction with a PayPal Business account compared to using Depop Payments. For a seller processing $50,000 in annual sales at an average order value of $20, this 0.5% difference would amount to approximately $500 in savings per year.

PayPal also offers additional discounted transaction fee tiers through its micropayments pricing for payments under $10:

  • 5% + $0.05 per transaction for amounts less than $4
  • 5% + $0.10 per transaction for amounts from $4 to $10

This micropayments pricing can make PayPal more cost effective for high volume sellers with average order values under $10. Depop Payments does not currently offer discounted pricing tiers.

Transaction Speed

For Depop sellers who rely on quick access to sales revenue, the speed of receiving funds is another key consideration.

  • Depop Payments: Funds deposited directly into a connected bank account within 2-3 business days.
  • PayPal: Funds available instantly in PayPal account balance, takes up to 5 days to transfer to bank account.

Depop Payments offers faster direct bank deposits compared to PayPal, which is preferable if you need immediate cash flow from sales. However, the PayPal account balance provides instant access to money that can be used for re-investment or other funding needs.

Payment Methods for Buyers

Depop Payments generally provides more diverse payment options for buyers:

  • Depop Payments: Credit/debit card, Apple Pay, Google Pay, PayPal account
  • PayPal: PayPal account balance, bank account, debit/credit card linked to PayPal

By accepting direct credit card payments, Depop Payments removes friction during checkout that could potentially lead to abandoned carts. In a 2020 survey of Depop sellers, over 50% reported credit/debit cards as the most common payment method from buyers. So the ability to accept direct card payments with Depop Payments aligns well with buyer preferences.

However, many buyers may already have PayPal accounts they feel comfortable using, especially for larger purchases they may perceive as higher risk.

Reporting and Account Management

When it comes to reporting and managing your account, PayPal provides some advantages:

  • Customizable reporting on sales, fees, refunds, chargebacks, and other metrics for segmentation and analysis.
  • Multiple user access so employees or bookkeepers can be granted restricted access.
  • Accounting software integration like QuickBooks and Xero to easily sync transaction data.

Depop Payments has much more limited reporting capabilities, and only a single account holder can be granted access. For sellers running an established business on Depop, PayPal‘s robust account management and reporting features are beneficial.

Buyer and Seller Protection

Both processors provide protection programs for buyers and sellers in case issues arise:

Processor Seller Protection Buyer Protection
Depop Payments
  • Coverage for unauthorized payments and item not received claims
Details not publicly available
  • Coverage for unauthorized payments and item not received claims
  • Minimum $750 coverage per claim
  • Up to $20,000 per claim
  • Coverage for items significantly not as described

PayPal provides more robust public details on dispute resolution policies and coverage amounts. For sellers, the minimum $750 protection per claim also far exceeds what most individual Depop orders would amount to.

So PayPal‘s more mature and transparent policies may offer sellers greater peace of mind when issues arise. However, Depop Payments protection should still sufficiently cover most transactions.

Final Recommendations

Based on this detailed comparison, here are my recommendations on when to use Depop Payments vs PayPal as a seller:

  • Lower volume sellers are likely better off using Depop Payments for the convenience of built-in payments. Transaction fees are identical to personal PayPal accounts.
  • High volume sellers processing over $10k annually should use a PayPal Business account to qualify for discounted transaction fees.
  • Established sellers with order volumes under $10 should enable PayPal micropayments for the most cost-effective fees.
  • Sellers wanting to optimize buyer payment methods and avoid checkout abandonment are likely better off with Depop Payments.
  • Sellers needing accounting software integrations and detailed reporting should use PayPal over Depop Payments.

I hope this guide has provided you with clarity on which payment processor aligns best with your business needs as a Depop seller! Let me know if you have any other questions.