How Much Does PayPal Charge? Personal and Business PayPal Fees Explained
Find out how much it really costs to use PayPal for personal and business use.
- May 13, 2020
- Small Business Finances
- 6 min read
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The PayPal of today looks nothing like it did at its start. Once a simple, online money transfer service associated mainly with eBay, PayPal has since become a juggernaut in the financial services space. PayPal now offers a whole slew of financial services for both personal and business purposes. It has evolved into offering point of sale (POS) system services and even working capital loans, all on top of its core service: sending money.
With all these services and features offered, the natural question is does PayPal charge a fee to send money? What’s more, beyond just sending money, what are the fees for PayPal’s other services, such as credit card processing or selling goods or services on their platform? The answer is: it depends. This is because much of PayPal’s offerings are free while many others come with some fees. Read on to find out how much PayPal charges for each of its services.
When buying products or services online or in-store using PayPal in the U.S., you won’t get charged any fees. Buying is free within the U.S. with PayPal, though other uses of PayPal can come with a fee.
As a PayPal account holder located in the U.S., you have the ability to transfer money out of PayPal in two ways:
- Standard Transfer: Your money is transferred to a linked bank account, which is free and typically deposits the money by the next business day.
- Instant Transfer: Your money is transferred to a linked bank account or eligible debit card and transfers money in just minutes. The transaction fee for Instant Transfer is 1% of the amount transferred, with a maximum fee of $10. Eligible debit cards, in this case, refers to Visa and MasterCard debit cards that participate in Instant Transfers.
Using PayPal as a platform to send money to friends and family is very common. When you’re a U.S. PayPal account holder, you can send money to friend and family members who are in the U.S. that use PayPal as well. Whether you pay a fee or not depends on how you fund the money you send.
- When the payment method is funded by your PayPal Cash, PayPal Cash Plus balance or bank account linked to PayPal, the fee for sending money is waived.
- When you fund the payment through a credit card, debit card or PayPal Credit, you’ll pay 2.9% of the amount plus a fixed fee of $0.30.
When you’re a U.S. PayPal account holder who wants to send money to a friend or family member with a PayPal account in a country outside the U.S., then you’ll pay a fee that’s once again dependent on the payment method you use and the amount you’re sending.
- If you fund the money you send to the other non-U.S. PayPal account holder through your PayPal balance or linked bank account, you’ll pay a transaction fee of 5% of the amount sent, with a maximum fee of $4.99, while paying no funding fee.
- If your payment method is funded by credit card, debit card or PayPal Credit, you’ll pay the same 5% transaction fee, but also an additional funding fee equal to 2.9% of the transaction amount funded plus a fixed fee based on the currency.
PayPal has been widely adopted by businesses as another way of accepting payments for goods or services they sell. This makes sense considering how payment methods have changed significantly in just the last decade. Credit cards, debit cards and cash have been joined by a variety of digital and mobile payment apps, like PayPal, which have dramatically changed the landscape of purchasing. Here’s a look at some of the main PayPal fees you may encounter if you’re a business accepts payments through PayPal.
Merchant fees are what you’re charged for accepting PayPal payments to purchase your products. If you sell goods or services online through PayPal, including through PayPal Payments Standard and PayPal Checkout, then you will pay transaction fees for selling using their platform to accept payments. If you sell goods or services in your store location using PayPal, you’ll also pay transaction fees for selling your products.
Here’s a breakdown of the different selling fees you pay when you receive payments through PayPal for your goods or services:
|Type of Sales Transaction||Source of PayPal Payment for Sale||Sales Transaction Fee|
|Online transaction||U.S.||Fee of 2.9% of the transaction amount plus a fixed fee of $0.30|
|Outside the U.S.||Fee of 4.4% of the transaction amount plus a fixed fee based on the currency|
|In-store location||U.S.||Fee of 2.7% of the transaction amount plus a fixed fee of $0.30|
|Outside the U.S.||Fee of 4.2% of the transaction amount plus a fixed fee based on the currency|
The good news about PayPal merchant fees is that there are no startup costs, termination fees or monthly fees. With PayPal Payments Standard, you’ll be able to accept PayPal payments, PayPal Credit and all major credit cards and debit cards. However, with PayPal Checkout, you can accept all these forms of payment plus Venmo.
The above PayPal merchant fees are for for-profit businesses. If your organization is a registered charity with 501(c)(3) status, you can get discounted credit card processing fees. Thus, when a verified charitable organization accepts money via PayPal from a customer in the U.S., the fee is 2.2% of the transaction amount plus a fixed fee of $0.30, which is less than the fees charged to for-profit businesses. Payments from outside the U.S. to charitable organizations come with a 3.7% fee of the transaction amount plus a fixed fee based on the currency, which is also lower than fees set for for-profit businesses.
PayPal’s policy and fees for transferring a balance from a PayPal business account are the same as they are for personal accounts. For standard transfers to a linked bank account, which usually takes about one business day, there is no fee.
However, for Instant Transfers with an eligible linked debit card or bank account, you’ll pay a 1% fee of the amount transferred, up to a maximum of $10.
PayPal Payments Pro is an enhanced version of PayPal Payments Standard. Payments Pro comes with more features and capabilities, such as accepting credit cards via phone, fax and mail, via Virtual Terminal. These advanced features, however, do come at a cost. Here’s a breakdown of PayPal Payments Pro and Virtual Terminal fees.
|Fee Description||Fee Amount|
|U.S. Transaction Fees||2.9% + $0.30 per transaction|
|International Transaction Fees||4.4% + fixed fee per transaction.|
|Virtual Terminal||3.1% + $0.30 per domestic transaction; additional 1.5% for cross-border transactions|
|American Express® card usage fees||3.5% per transaction|
Virtual Terminal is a convenient feature since it allows you to accept credit cards anywhere you have internet access. There’s no software to install, no coding required and no extra equipment. Instead, you log in to Virtual Terminal through PayPal.com, where you can track orders, credit card information and receive confirmation for successful transactions.
PayPal offers credit card payment processing when you partner with one of their point-of-sale (POS) partners. A POS system allows businesses to make sales and manage inventory and customer data. The PayPal credit card processing fees are as follows:
|Type of Transaction||Credit Card Processing Fee|
|Swiped & check-in transactions||2.7% per transaction|
|Keyed or scanned transactions||3.5% plus $0.15 per transaction|
|International fees||Accept non-US cards for the standard 2.7% per swipe plus a 1.5% cross-border fee and/or 2.5% currency conversion|
PayPal’s credit card processing and mobile card reader fees come with no startup costs, no termination fee and no monthly fees. You’ll also be able to accept payments on your smartphone and tablet, on the go or in-store.
PayPal has several other fees related to merchant fees, chargebacks, add-on services and more. Below is a breakdown of some of these other PayPal fees you may encounter using their platform and services.
|Recurring billing add-on service||$10 monthly fee|
|Advanced fraud protection services||$10 monthly plus $0.05 per transaction|
|Micropayment fee||5.0% fee of the transaction amount plus $0.05 per transaction in U.S.; 6.5% fee of the transaction amount plus a fixed fee based on currency for outside the U.S.|
|International sales||Additional 3% charge for any currency conversion and a 1.5% international transaction fee to receive payments from another country|
|Chargeback fee||$20 per transaction in the U.S.|
PayPal offers a wealth of useful services, both for personal usage and business purposes. Unless you opt for an add-on or enterprise service like PayPal Payments Pro, most PayPal services usually don’t have monthly fees. PayPal also states for many of its services that it doesn’t charge startup costs or termination fees either. As a business owner using PayPal to accept payments, you will have to be aware of associated fees more so than someone using it primarily for personal purposes. These fees, however, are minor compared to the vast customer base you gain access to by accepting payments through PayPal.
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