PayPal Fees: A Full Overview

Bucharest, Romania - June 23, 2012: Android smartphone with the PayPal logo displayed on the screen using a picture viewing software.
bizoo_n / Getty Images

PayPal offers a convenient, safe way to pay and get paid online. Customers can pay any way they choose, including through bank accounts, credit cards, PayPal Smart Connect — a line of credit you can use to make PayPal purchases — or available account balances. It’s available in 202 countries and 25 currencies, and it has more than 325 million accounts.

Of course, this convenience comes at a price, so keep reading to find out what you need to know about PayPal fees.

What Are the Fees PayPal Charges?

According to its website, it won’t cost you a cent to open a PayPal account or to download mobile app. PayPal charges fees only for the following transactions.

PayPal Fees

  1. When you receive money from a purchase. 
  2. When you get payments from outside your country or region.
  3. When you send personal payments using a debit or credit card.
  4. When you send money from your PayPal account to your bank account using an eligible debit or prepaid card.

Merchant and Consumer Fees

PayPal also charges both merchant fees and consumer fees, and they are quite different. Here’s a look at them both:

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Consumer Fees

PayPal’s fees vary depending on what type of transaction you are making, whether it’s domestic or international, what type of currency is being used and more. PayPal allows free payments directly from bank accounts but charges 2.90% plus 30 cents for debit and credit card payments. Below are some other relevant fees the business charges consumers:

  • Buying with PayPal: If you’re making a transaction that does not involve a currency conversion, whether it’s online or in-store, it’s free.
  • Sending and receiving payments: If you send or receive funds using the “Friends and Family” tab and it is not a commercial transaction, you won’t pay a fee if there’s no currency conversion involved; if there is, you’ll pay 5% of the transaction amount, or a minimum of 1.99 EUR and maximum of 3.99 EUR, whichever is greater.
  • Withdrawals from PayPal: If you want to withdraw or transfer money via PayPal to your local bank or debit card you’ve linked to your account, it’s free.

Merchant Fees

PayPal charges merchants for using its platform for commercial transactions — see below for typical prices:

Transaction Type Fee
Accepting digital payments 3.49% plus fixed fee of about $0.49 per transaction
Sending or receiving money for goods or services 2.99% plus $0.49
Credit/debit card payments 2.99% plus $0.49
Alternative payment methods 2.59% plus $0.49
Invoicing 3.49% plus $0.49
QR code transactions 1.90%-2.40% plus $0.49
Pay with Venmo 3.49% plus $0.49

So, if you’re a freelancer running a business, you might be wondering something along the lines of, “How much does PayPal charge for $1,000?” If you invoice a client for $1,000 and the client pays you via PayPal, you’ll get $964.61 — you’ll pay 3.49% of the transaction, or $34.90, plus the fixed 49 cent fee.

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Other Fees

PayPal charges fees for buying and selling cryptocurrencies.

Cryptocurrency Purchase or Sale Amount Fee
$1-$4.99 $0.49 plus spread
$5-$24.99 $0.99 plus spread
$25-$74.99 $1.99 plus spread
$75-$200 $2.49 plus spread
$200.01-$1,000 1.80% plus spread
Over $1,000 1.50% plus spread

Sending and receiving donations via PayPal will also involve fees. You’ll pay 2.89% per domestic transaction plus 30 cents, but if your nonprofit is designated a 501(c)(3), you can sign up for discounted fees. International donations will cost you an additional 1.50% each.

Using a debit or credit card will incur PayPal fees, too. If you take a contactless debit or credit card payment using the PayPal Here mobile application and a card reader, you’ll pay a fee of 2.70% for each transaction — or 3.50% plus $0.49 if the card is entered manually. When you accept debit and credit cards via your website you’ll pay between 2.59% and 2.89%, plus $0.49 per transaction.

Visa, Mastercard and Discover card payments that you accept via PayPal’s Virtual Terminal will cost you 3.09% plus 49 cents per transaction.

How Do I Avoid PayPal Fees?

There are lot of ways to avoid those pesky fees PayPal charges. Consider the following:

Ask To Be Paid as a Friend or Family

If you receive a commercial payment, say from a client, you’ll be charged a fee of 3.49% plus $0.49. That fee, however, applies only to money you get in exchange for goods or services.

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If that client sends you money via the “Friends or Family” option PayPal offers instead, you won’t be charged a thing — nor will the client if they use their PayPal balance or a bank account, or a combo of both.

Get Paid Less Often

If you’re being paid by someone frequently, the PayPal fees can quickly add up. Consider asking to get paid less often.

For example, if you have someone paying you every week, maybe ask that they pay once a month. So, instead of paying $0.49, plus 3.49% of the transaction weekly — or, if you’re being paid by someone outside the U.S., 4.99% plus a fixed fee that varies depending on the country the funds are coming from — you’ll be paying that once per month.

The percentage of the full amount will be the same, but you’ll end up paying less in fixed fees, which adds up over time.

Apply for a PayPal Cash Card

PayPal offers a credit card called the PayPal Cash Card, which works like a debit card for your account and enables you to access money immediately without paying any fees.

Change How You Withdraw Your Money

Because you can be charged to access your money from PayPal, you should do one of the following.

  • Transfer your money from PayPal to your bank account. Standard transfers come with no fee and delivery the next business day.
  • Get the PayPal Cash Card. When you get the card, you’ll have access to more than 32,000 fee-free MoneyPass® ATMs that you can use to get cash on the spot.

Deduct PayPal Fees on Your Taxes

Maybe you didn’t know that you can deduct PayPal merchant fees on your tax return — but you can, just like you can deduct bank fees. Just add up how much you paid in PayPal fees for your business throughout the year and include that amount on your Schedule C.

Final Take

Compared with other payment processors, PayPal is a breeze for consumers and businesses to use. Although there are fees involved, there are several workarounds for avoiding them.

If you’re in the market for a payment processor, make sure you find the one that best supports your particular business. Look at fees, of course, but also take into consideration ease of use and website integration. Whichever you choose, keep in mind that as your business grows, it’s simple to reassess and change processors if one fits your needs better.

Cynthia Measom contributed to the reporting for this article.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.

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About the Author

Barri Segal has 20+ years of experience in the publishing and advertising industries, writing and editing for all styles, genres, mediums, and audiences. She has been writing on personal finance topics for 12 years and gains great satisfaction from making a difference in consumers’ lives.
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