PayPal International Fee (Explained in Detail)

Last Updated on December, 2024

PayPal is a famous fintech company that makes international payments. But what about the charging structure? Is it really fair?

Through my research, I understood that PayPal can be used to transfer money internationally, but it might not be the best choice because it charges high fees. Also, its exchange rate can be worse than other options because it adds extra charges.

However, there are some other benefits to using PayPal.

Keep reading this piece fully to learn everything you’re looking for!

Quick Summary

PayPal charges significant fees for international transactions, including a 5% fee for overseas transfers and additional charges for currency conversion.

Users can minimize fees by avoiding credit or debit card payments, consolidating withdrawals, negotiating lower rates with PayPal, and considering other payment services that offer cheaper options for international transactions.

Other services like Wise offer potentially lower costs for international transactions compared to PayPal. Wise charges starting from 0.43% for converting currencies, whereas PayPal charges a fixed 4%.

Contents

PayPal Fee: Overview
What are the Various Methods Available to Finance a Paypal Transfer?
PayPal Currency Conversion Fee
What are the Transaction Fees for Paypal?
- Does PayPal Charge a Fee for Money Transfers?
What are the Withdrawal Fees for Paypal?
PayPal Fees: A Comparison With Wise
How to Avoid PayPal Fees?
Conclusion
FAQs

PayPal Fee: Overview

When you’re spending online or in person with a retailer in the US, and there’s no need for currency conversion, there won’t be any fees.

For domestic payments in USD, you can avoid PayPal fees by using your PayPal balance or a linked bank account. But if you use a card, you’ll pay 3.4% plus a fixed amount (0.37 USD for local transfers).

GUESS WHAT? If you’re converting currencies or sending money internationally, PayPal fees kick in:

For personal transactions overseas, you’ll pay 4.99 USD if you use a linked account or PayPal balance, and 4.99 USD plus 3.4% plus a fixed fee for card payments.
When shopping online internationally, there’s no fee, but there’s a 4% charge on top of the wholesale exchange rate.
The fee for receiving domestic transactions applies, plus the additional percentage-based fee for international commercial transactions.
PayPal charges a flat fee per invoice, too.

The charges may vary depending on your account setup and location. Check your account’s terms and conditions for details before proceeding.

Consider how these fees can add up and compare them with alternative providers like Wise, which might offer cheaper options for your international payments.

What are the Various Methods Available to Finance a Paypal Transfer?

To transfer money internationally with PayPal, you need to decide how to pay for it.

There are different ways to pay, each with its fees. So, it’s important to pick the best option for you.

Here are your choices if you’re using PayPal to transfer money overseas:

Use PayPal Balance: If you have money in your PayPal account from previous transfers, you can use it to pay.
Use A Linked Account: You can use an account linked to your PayPal account. The money goes straight from your bank, through PayPal, to the person you’re sending it to.
Use A Credit Or Debit Card Or Paypal Credit: You can pay with a credit or debit card or use PayPal credit. However, keep in mind that this usually has the highest fees. So, make sure to check the details before you decide.

PayPal Currency Conversion Fee

paypal consumer fees web page on a laptop screen

To check the exchange rate PayPal uses, follow these steps:

Go to ‘Wallet’
Open the menu next to any currency balance and choose ‘Convert Currency.’
Pick the currency you want and click ‘Next.’
Enter the amount you wish to send to see the exchange rate

PayPal sets its exchange rate by adding a percentage fee to a wholesale rate quote from their bank, which they receive twice a day. This helps determine the retail foreign exchange rate for currency conversion transactions.

When you transfer an amount from your PayPal account to your personal bank account, PayPal converts your funds into your bank’s local currency.

They claim to offer competitive exchange rates similar to banks and currency exchanges.

Transferring to another PayPal account requires transaction fees of 5% of the amount, with a minimum of $0.99 and a maximum of $4.99. Additional charges include a 2.9% funding fee plus a fixed rate based on the currency used when having a credit card, debit card, or PayPal credit to do transactions.

If you convert currency before sending, you’ll also be charged a conversion fee, which is typically 4% unless stated otherwise.

When transferring directly to a bank account via Xoom, the markup on the exchange rate differs depending on the currency. Additional fees apply when using a debit card or credit card, which vary based on the currency and transaction fees.

What are the Transaction Fees for Paypal?

When you sell things in-store or online, you’ll be charged transaction amounts. This fee, also known as an international payment processing fee or seller fee, varies depending on the type of international transaction.

The amount you pay depends on whether the transaction is within your country (domestic) or across borders (international), as well as the payment method used.

If you receive money for goods or services, the standard PayPal transaction fee is 3.9% plus a fixed amount of 0.37 USD for domestic transactions and 4.4% plus a fixed rate for international transfers.

a picture of paypal app on a phone screen

Suppose you receive money using alternative payment methods (APM), such as different payment gateways. In that case, the fee structure remains the same: 3.9% plus a fixed amount of 0.37 USD for domestic transactions and 4.4.% plus a fixed rate for international transactions.

For PayPal micropayments, which are smaller transactions often used for digital goods or small purchases, the fee is 5% plus a fixed fee. However, for digital goods, specifically, the cost is slightly higher at 5.5% plus the fixed amount. For international micropayments, the fee is 6% plus the fixed fee.

Does PayPal Charge a Fee for Money Transfers?

If you send money from your online PayPal account or an eligible linked bank account, you won’t face any transaction fee. However, through PayPal, credit, debit, or credit card, you will incur a 2.9% fee along with a fixed 30-cent transaction fee. (Sometimes, it will incur a confirmation fee too.)

Remember! International money transfers have UNIQUE regulations as per PayPal’s terms.

Note: Use an international PayPal fee calculator to calculate PayPal fees and to find out more.

What are the Withdrawal Fees for Paypal?

If you have money in your PayPal account and want to move it to your regular bank account or card, there might be a fee. PayPal fees vary depending on how you choose to withdraw money.

For withdrawing to a local bank account:

There’s no fee if you withdraw over $148.32
If you withdraw less than $148.32, there’s a $0.74 fee

There’s a flat 3% fee for withdrawing money from a USD bank account. If you withdraw to a linked card, there’s a 1% fee. Plus, if your PayPal funds are in a different currency than your account, there may be currency conversion fees of 3% to 4%.

Are you clear?

PayPal Fees: A Comparison With Wise

When sending money internationally, it’s important to consider fees and rates.

PayPal is a commonly used service, but Wise is also worth looking into. Let me compare the two.

Opening And Ongoing Fees: It doesn’t cost anything to open a personal account with Wise, and there are no ongoing fees. PayPal also doesn’t charge you to sign up.
Card Fees: If you want a card with Wise, it costs 9 USD. However, PayPal doesn’t charge any fees for getting a card.
Spend Currencies You Hold: If you spend money in a currency you already have with Wise, there are no extra fees. PayPal is the same – no additional fees for spending currencies you already have.
Spend Currencies You Don’t Hold: If you spend money in a currency you don’t already have with Wise, there’s a fee starting from 0.43%. But PayPal doesn’t charge anything for this.
ATM Fees: With Wise, you can take out money from ATMs for free twice a month, up to 228.40 USD each time. After that, there’s a fee of 0.98 USD plus 1.75%. PayPal doesn’t charge any fees for ATM use.
Currency Conversion Within Account Or When Sending A Payment: When you convert money from one currency to another within your Wise account or when you send payment, there’s a fee starting from 0.43%. With PayPal, there’s a fixed fee of 4% for this.
Overseas Transfers: If you send money overseas with Wise, there’s a fee starting from 0.43%. But, with PayPal, there’s a 5% fee (which can be between 0.65 USD and 3.91 USD) when you transfer money using a bank account or PayPal balance.
Extra Fee For Paying By Card: If you choose to pay with a card on PayPal, there’s an extra fee of 2.6% plus a fixed fee. Wise doesn’t have this additional fee.

Discover more about Wise fees here for a deeper understanding.

GO TO WISE

How to Avoid PayPal Fees?

Here are some easy tips for reducing costs when using PayPal to send payments or shop internationally:

Whenever possible, avoid using your credit or debit card with PayPal to remove extra fees.
Before making a payment, carefully review your PayPal currency conversion fee options. The fees can vary depending on the transaction type. It is cheaper to switch currencies within your account first.
PayPal’s fees for merchant transactions vary based on how your customers pay. Explore which option is most cost-effective for your business to minimize costs.
If you regularly transfer funds from your PayPal account to your bank, be aware of any withdrawal fees. Try to minimize these by consolidating withdrawals or choosing lower-cost withdrawal options.
If you’re a frequent PayPal user or operate a business, consider negotiating fees with PayPal directly. Depending on your transaction volume, you may be eligible for lower rates.
Instead of PayPal, consider using alternative payment types like Wise to process your payments.

Useful guides:

Truist International Wire Transfer

Conclusion

Finally, did you understand how PayPal’s international fee works? In my opinion, PayPal charges a lot when compared to some other famous alternatives like Wise, Revolut, OFX, and more.

So, if you’re planning to do transactions using PayPal, you’ll have to lose a bit more money from your wallet. (It’s a sad truth you should accept.)

However, if your eyebrows are raised once reading the fees PayPal charges – go for a better option that will suit you more.

FAQs

Yes, PayPal charges $4.99 plus an additional 3% to 4% fee on the amount sent, along with the standard exchange rate, for sending money internationally.

PayPal charges sellers fees ranging from 3.9% to 4.4%, depending on the transaction type and whether the payment is from an international source.

To avoid foreign transaction fees with PayPal, use services like Wise or OFX for sending money abroad or making international purchases.

PayPal charges two main types of merchant fees: 2.99% plus $0.49 per transaction for payments on PayPal’s website with credit or debit cards, and 3.49% plus $0.49 per transaction for online checkouts on merchant websites.

PayPal Fee: Overview

What are the Various Methods Available to Finance a Paypal Transfer?

PayPal Currency Conversion Fee

What are the Transaction Fees for Paypal?

Does PayPal Charge a Fee for Money Transfers?

What are the Withdrawal Fees for Paypal?

PayPal Fees: A Comparison With Wise

How to Avoid PayPal Fees?

Conclusion

FAQs

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