pay pal fees rounding scheme

[hrg_one]

How does pay pal round when they are figuring out fee's.  In the "A Sample IPN Message and Response" example they have an item that cost $19.95 with a fee of .88 cents.  Now, when you do the math on this problem you find out that

(19.95 x .029) + .30 = 0.87855  so I was wondering how far out does paypal go to determine when they will round up on a fee and when they will leave it at that current number.  Because when you do the math on this example the difference between .88 -.87855 = 0.00145, now if you take 0.00145 and run that over a couple of thousands of transactions, you'd be getting **bleep**ed out of a nice piece of change because pay pal is rounding up on transactions these transactions.  Any information about pay pals rounding policies will be greatly appreciated.

[sandypurins]

If the number you're rounding is followed by 5, 6, 7, 8, or 9, the number is rounded up.
Example: 2.636 is rounded to 2.64

If the number you're rounding is followed by 0, 1, 2, 3, or 4, the number is rounded down.
Example: 2.632 is rounded to 2.63

As a result, approximately half of the time the number will be rounded up and the other half of the time it will be rounded down.

Example regarding PayPal fees...

$19.95 x 0.029 = 0.57855 = 0.58 plus 30 cents = 88 cents
PayPal gains 0.00145 cents

$21.50 x 0.029 = 0.62350 = 0.62 plus 30 cents = 92 cents
PayPal loses 0.00350 cents

[LearningMorning]

think when "hrg_one" said "how far out" does paypal go, he meant, to what decimal place.

3? ie. 1.494

4? ie. 1.5908

5? ie. 1.50029

15? ie. 1.984938271835647

In theory, PayPal could go on for thousands of decimal places if they felt like it, so when trying to predetermine PayPal fees for something, one needs to know what decimal place to begin the rounding at.

PS. I am also trying to find this answer. Any one have any idea at all? Net info seems scarce on this detail.

Though I could be wrong, I think a general rule of thumb is if a preceding number causes the next number to be a "roundable" number, it's invalid. E.g.

1.4445 will round to 1.44 - it will not do sequential rounding: 1.4445 = 1.4455 = 1.4555 = 1.45. That's adding too many values. I don't think a number should be roundable in terms of monetary exchange  past the first rounding. So in closing, I think only the third decimal place matters- $1.445, but I'm not PayPal, so I can't say exactly what their policy is, just throwing the ethics on the table.

[sandypurins]

---

@LearningMorning wrote:

In theory, PayPal could go on for thousands of decimal places if they felt like it, so when trying to predetermine PayPal fees for something, one needs to know what decimal place to begin the rounding at.

So in closing, I think only the third decimal place matters- $1.445...

---

You are correct that it's the third decimal place which matters, and... that's what I was referring to when I wrote about the number you're rounding to, which... in the case of multiplying dollars by a percentage is 2 decimal places.

It's easy enough to check... just look at your PayPal account history... the payment amount received and the payment receiving fee will answer the rounding question.

[JeffAtEt]

Cancel comment... forgot the 30 cent transaction fee.