In this era where everything from shopping to schooling is online, it is nearly impossible that you haven’t tried PayPal. It’s one of the oldest and most reliable online payment solutions. It has paved the way for buyers and sellers around the globe to exchange products and services easily. The best part is that merchants who want to set up their PayPal accounts don’t require much work to receive payments because PayPal has made the entire process hassle-free for them.

That said, ‘does PayPal charge a fee’ to its customers for all that convenience? Or does it have any charges to process credit/debit card payments? We will know in a bit. Just scroll down and keep on reading. You will also find some worth-trying hacks to save more on your sales at the end of this article.

Does PayPal charge a fee to merchants?

PayPal charges a fixed amount of fee to its merchant accounts for providing online payment services. It works as when a customer makes a purchase and chooses to pay from his/her personal PayPal account, the payment system won’t charge them any fee. However, it charges merchants a fixed transaction fee and some percentage of the total sale on every purchase to process and transfers the earnings. Other than that, PayPal does not charge any additional monthly fees or service charges.

What are the different types of PayPal Transaction fees?

As we have said above, PayPal charges a transaction fee to its merchants for both online and offline transactions. And since different types of transactions happen on a merchant’s account, PayPal offers different rates for each. The fee is commonly called the payment processing fee.

In total, PayPal offers four different transaction rates to its merchant accounts. They are categorized based on; whether the transaction has been done inside or outside the country, then it determines whether it is an online or offline purchase.

PayPal applies a fixed 2.9% on the total purchase + a fixed currency fee for online purchases in the US. For sales transactions outside the US, PayPal charges 4.4% transaction + currency fees.

On the other hand, PayPal’s offline transaction fees are a bit lower than its online transaction fees. It charges 2.7% for the transaction fee + the currency fee. For offline sales happening outside the US, the percentage rises to 4.2%.

Does PayPal Charge a fee to Transfer Balance?

Generally, PayPal does not charge a fee to transfer earnings to your bank account. It offers two ways to transfer funds to your bank account.

  1. Standard way – Free of cost

You won’t be charged any transfer fee when you transfer your earnings from a PayPal account to your bank account linked to PayPal. However, it takes a day or two to receive the funds in your bank account.

  • Instant Transfer – incurs a fee

PayPal also offers to use Instant Transfer to deposit funds in your bank account for a fee. Why does PayPal charge a fee for that? It’s because, via this service, your funds get deposited to your bank or debit card within a few minutes. Due to this convenience, it charges a small fee.

Every time you transfer funds, PayPal charges 1% of the total amount, making up a max fee of $10. However, this can swiftly increase if you make daily transfers.

Does PayPal charge a fee to send money?

Typically, sending money to family and friends within the country through PayPal or a linked bank account does not incur any fee. However, sending money using a credit/debit card or PayPal credit charges a 2.9% fee of the total amount sent + a fixed fee of $0.30.

For sending money internationally, PayPal charges funding and transaction fees as well as a fixed amount for sending funds in other countries.

Does PayPal charge a fee to receive money?

When sending money to friends or family, you need to choose from transaction type to confirm whether you are transferring funds to a merchant account or family. For instance, if you choose to send money or a gift card using PayPal, it will ask you to pay the transaction cost either from your account or pass it to the receiver. If you select the latter option, the receiver will then cover the cost. You can opt for PayPal Cash or PayPal funds to waive that money.

On the contrary, if it’s a merchant account, then PayPal will charge a fixed small fee from the merchant to receive the payment.

Does PayPal charge a fee for credit cards?

If you send money to your friends or family using a credit/debit card, then PayPal charges a 2.9% transfer fee. It also gives the sender an option to pass on the fee to the receiver. However, if the sender is sending funds via his/her bank account, no transaction fee will be charged across the US.

On the flip side, if you want to send a payment to family or friends outside the US, PayPal charges two different types of fees for that. For instance,

If you choose PayPal balance or your PayPal linked bank account to transfer funds internationally, the transaction will cost 5% of the total amount. The percentage drops to 2.9% for domestic transactions. Apart from this, you don’t have to pay any additional funding fee.

International transaction made using PayPal credit or debit/credit card will cost the same fee as above however, you will additionally be paying a 2.9% funding fee + fixed currency fee.

What is the PayPal Mobile Card reader fee?

PayPal’s Mobile Card reader fees enable merchants to process payments anywhere at any time. There are no setup costs, monthly or annual fees, except for transaction fees.

For check-in and swiped transactions at checkout, the merchants have to pay a 2.7% seller fee, which rises to 3.5% + 0.15 for scanned or keyed transactions.

For international credit cards, there’s an additional 1.5% fee. Also, if the customer pays in a different currency, PayPal charges an additional 2.5% conversion fee.

What is the Chargeback fee in PayPal?

For those who don’t know, a chargeback is a returned amount that a customer receives after successfully disputing a purchased item on their transaction report.

Every time a customer initiates a chargeback, PayPal charges a $20 fee to its merchants, which is non-refundable. Merchants can apply for PayPals’ Seller Protection program to get the chargeback fee waived.

Does PayPal charge Refund Fee?

Refunds requests are more common than chargebacks. Fortunately, PayPal does not charge its merchants to process a refund.

How to save merchant fees on PayPal?

While merchant fees cannot be completely waived, you can perform some hacks to reduce its impact on your earnings.

  1. Register for a Nonprofit discount

Those who run a non-profit can get a discount on the transaction fees. Additionally, they can get their monthly fee waived on PayPal. After discount, they can save 0.7% on every transaction.

  • Save on micropayments

Payments or purchases that are $12 or lesser are considered micropayments on PayPal. For such transactions, the payment system charges low fixed fees to merchants. For instance, it charges, $0.05 + 5% for micropayments and $0.30 + 2.9% for transactions greater than $12.

While the saving may look small, they can sum up to a big amount over time if you take low-value sales more.


PayPal secures the top position when it comes to ranking payment systems. While the convenience it provides has no match, its processing fee may affect some small sellers.

Now that you are aware of its transaction charges, strategize your business accordingly and aim for higher profits. Lastly, you’re not forbidden to switch to other payment systems. If you think PayPal is expensive, you can seek cheaper alternatives.