PayPal is one of the largest online payment systems, with more than 400 million active users around the globe. It’s also a popular option for accepting payments among online sellers.
As with any payments system, businesses need to factor transaction fees into product pricing and the cost of operations. Ahead, learn how to calculate PayPal fees, what cut PayPal takes, and how PayPal fees work with Shopify Payments.
What are PayPal fees?
PayPal fees are the costs associated with using the PayPal platform to process payments and send or receive money. Fees are applied as a percentage of the transaction amount or as a flat fee, depending on how you’re sending or receiving money. Not all types of PayPal transactions incur a fee.
Why does PayPal charge a fee?
Most of the fees charged by PayPal are for merchants using its platform. In these cases, PayPal is offering its services as a payment gateway to merchants, to help customers enjoy a smooth checkout experience.
Other fees charged by PayPal exist to cover operating expenses and generate profit. PayPal does not charge a fee for consumer-to-consumer money transfers.
How to calculate PayPal fees
Consumers who are purchasing goods and services in the US don’t pay any fees for using PayPal. However, if you’re buying or selling cryptocurrencies, sending money internationally, or making transfers from a credit card, PayPal fees will apply.
Merchants selling goods or services via PayPal also need to pay fees. This is charged as a percentage of the transaction plus a fixed fee.
All PayPal fees vary depending on the transaction type, currency, and location. When PayPal charges a fee, it will break down the cost on your bill.
PayPal fee calculators
You can use a PayPal fee calculator instead of relying on your own calculations. There are many free tools out there, including:
- NerdWallet PayPal fee calculator. Estimate costs for running your digital checkout, in-person Zettle POS, or standard debit and credit card payments.
- The Fee Calculator. Use this calculator to compare PayPal and Stripe fees.
- SaleCalc.com. See fees for a variety of third-party marketplaces, including different types of PayPal transactions.
- Wise PayPal fees calculator. Tailored for merchants based anywhere in the world, selling to customers anywhere in the world.
How much does PayPal take in fees?
It’s free for consumers to donate money, pay for a purchase, and send money domestically using PayPal. But the platform does charge fees for consumers who send money internationally or from credit cards, as well as those buying crypto.
For businesses, PayPal takes a percentage of transaction amounts, as well as a fixed fee in many cases.
Here’s a full breakdown of the fees that PayPal takes from consumers and merchants:
PayPal merchant fees
Merchants are charged fees when their customers purchase products using PayPal payment pages, POS devices, or payment gateways.
Credit and debit card fees
When you add a PayPal button to your online store, customers are taken to a PayPal payment page to make their purchases using a credit or debit card. For these transactions, PayPal takes 2.99% of the transaction plus a 49¢ fee.
For example, a customer payment of $50 will incur a $1.99 processing fee ($1.50 + 49¢). Be sure to build this fee into your product pricing strategy, so that you don’t lose out on profits.
Online checkout fees
When customers use PayPal to purchase items directly through a website’s checkout (without being redirected to PayPal’s payments page), PayPal takes 3.49% of the transaction plus a 49¢ fee.
Transactions made using PayPal’s in-person point-of-sale (POS) system are charged at 2.29% of the transaction plus a 9¢ fee.
There are also monthly fees for this service: $25 for Payflow Pro, $10 for recurring billing, and $10 for additional fraud protection services.
Chargebacks have a $20 fee per instance for US-based sellers. Dispute fees are $15 per instance, or $30 for high-volume disputes.
If your business receives a payment from outside the US, PayPal will charge you the regular domestic transaction fee plus an additional 1.5%. On top of that, there’s a fixed fee that varies by currency:
Other merchant fees
PayPal offers a range of other products to help merchants collect payments, each with its own transaction fee:
- Invoice payments: 2.99% + 49¢
- QR code transactions: 2.29% + 9¢
- Venmopayments: 3.49% + 49¢
- Campaign fee–store cash transactions: 8%
- Micropayments (used by BNPL businesses): 4.99% + 9¢
Here is a complete list of merchant fees relating to all of PayPal’s products and services.
PayPal consumer fees
Consumers are charged fees when they use PayPal for more than domestic shopping and sending money to friends and family.
It’s free to use PayPal to pay for a purchase in-store or online, as long as you’re not converting currency.
There’s no fee for sending money domestically to friends and family from your PayPal balance or bank account.
However, if you want to use a credit card to send money, you’ll have to pay 2.9% of the transaction plus a fixed fee of 30¢.
Sending money internationally without converting currencies has a 5% transaction fee up to a maximum of $4.99. That doesn’t include the additional fee for using a credit card.
Buying, selling, and transferring cryptocurrencies
PayPal charges fees for buying and selling crypto based on the USD value of the purchase or sale:
Slightly different fees apply to PYUSD, PayPal’s crypto stablecoin. There’s a 1.75% fee to convert between $250 USD and $1,000 USD worth of PYUSD to or from another type of crypto. That fee drops to 1.45% for amounts over $1,000 USD.
There’s no fee for holding crypto in your PayPal account, receiving a crypto transfer, or transferring crypto to another PayPal or Venmo account.
Currency conversion and international transaction fees
If you use PayPal to buy an item in a different currency, or to send money that’s converted and received in a different currency, there’s a 4% transaction fee.
PayPal also reserves the right to charge other amounts for conversion fees. If that happens, PayPal will let you know during the transaction.
Here’s a look at the complete list of PayPal consumer fees.
PayPal donation fees
PayPal charges consumers and businesses the same fees for sending and receiving donations via the platform.
There is no fee for sending domestic and international donations. If you’re receiving donations, PayPal will take the following amounts depending on how donations are received (for example, via a PayPal Donate button):
How PayPal fees work with Shopify Payments
PayPal Express is a supported payment gateway for Shopify merchants and is easy to integrate into your store. When you set up a Shopify store, Shopify creates a PayPal Express Checkout account for you, using the email address associated with your Shopify account.
If you already have a PayPal account with that email address, you’ll receive payments from orders made with PayPal right away. If you don’t, you’ll have to finish setting up your PayPal account.
Merchants using Shopify Payments and PayPal Express together only pay fees for the payment gateway that a customer uses to checkout (you won’t be double billed).
How do PayPal fees compare to other payment gateways?
Here are the merchant transaction fees charged by other popular payment gateways:
Shopify Payments is the native payment gateway for Shopify stores. With Shopify Payments, you’re automatically set up to accept all major payment methods as soon as you create a store.
Shopify charges between 2% and 3% of every domestic transaction processed using Shopify Payments, plus a 30¢ fee. The fee amount varies depending on the Shopify Plan, the type of credit card used, and whether the transaction was made online or in person.
There are no third-party fees when orders are processed through Shopify Payments, Shop Pay, Shop Pay Installments, and PayPal Express on Shopify. The same goes for cash payments and bank transfers.
The standard card fee for merchants using Stripe is 2.9% plus a 30¢ fee for each successful transaction. Beyond that, Stripe has a long menu of fees for various products and payment types.
Square’s merchant fees include a 2.9% plus 30¢ fee for online transactions, a 2.6% plus 10¢ fee for in-person transactions made with a POS, and a 3.3% plus 30¢ fee for invoices.
Venmo payments sent to businesses are charged at 1.9% plus a 10¢ fee. For contactless Venmo payments made using Tap to Pay on iPhone or Android, the seller transaction fee is 2.29% plus 10¢.
Start accepting payments fast with Shopify Payments
Skip lengthy third-party activations and go from setup to selling in one click. Shopify Payments comes with your Shopify plan, all you need to do is turn it on.
Paying for PayPal
If you don’t accommodate the payment options your shoppers prefer, you risk losing them to competitors who do. It’s up to merchants to account for PayPal fees when pricing products to ensure profitability. Shopify users can create simple, friction-free PayPal integrations for customers to complete their purchases.
Disclaimer: The fees mentioned in this article are accurate as of the publication date, but may be subject to change.
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PayPal fees FAQ
What are PayPal transaction fees?
PayPal charges merchants two primary types of transaction fees. For transactions made on PayPal’s website using credit and debit cards, PayPal charges 2.99% plus 49¢ per transaction. For transactions made via online checkouts on merchant websites, PayPal charges 3.49% plus 49¢ per transaction.
How do you avoid PayPal fees?
There is no way for businesses to avoid PayPal fees without breaching PayPal’s user agreement.
Why does PayPal charge a fee?
PayPal charges a fee for merchants to use its platform. PayPal is a for-profit company, so it looks to earn a profit after paying all of its operating expenses. PayPal does not charge a fee for consumer-to-consumer money transfers.
What are the fees for PayPal accounts?
PayPal doesn’t charge fees for opening an account. But there are fees for certain transactions, such as when you receive payments from a purchase, make international payments, send money using a credit card, or convert currencies. You can view specific fees in the Activity section of your PayPal account.