PayPal Fees: What Everyone Should Know (2024)

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:

1. NerdWallet PayPal fee calculator. Estimate costs for running your digital checkout, in-person Zettle POS, or standard debit and credit card payments.
2. The Fee Calculator. Use this calculator to compare PayPal and Stripe fees.
3. SaleCalc.com. See fees for a variety of third-party marketplaces, including different types of PayPal transactions.
4. 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
• PayPal consumer fees
• PayPal donation fees

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 $0.49 fee.

For example, a customer payment of $50 will incur a $1.99 processing fee ($1.50 + $0.49). 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 $0.49 fee.

POS fees

Transactions made using PayPal’s in-person point-of-sale (POS) system are charged at 2.29% of the transaction plus a $0.09 fee.

Payflow fees

Payflow is PayPal’s optional payment gateway, which lets merchants build custom checkouts. For sales made through Payflow, PayPal takes a $0.10 fee per transaction.

There are also monthly fees for this service: $30 for Payflow Pro, $10 for recurring billing, and $10 for additional fraud protection services.

Chargebacks

Chargebacks have a $20 fee per instance for US-based sellers. Dispute fees are $15 per instance, or $30 for high-volume disputes.

International fees

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% + $0.49
• QR code transactions: 2.29% + $0.09
• Pay with Venmo: 3.49% + $0.49
• Campaign fee–store cash transactions: 8%
• Micropayments (used by BNPL businesses): 4.99% + $0.09

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.

Buying items

There are no fees to use PayPal to pay for a purchase in-store or online, as long as you’re not converting currency.

Sending money

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 $0.30.

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:

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).

For more on accepting PayPal payments in your Shopify store, take a look at these help docs or contact support.

How do PayPal fees compare to other payment gateways?

Here are the merchant transaction fees charged by other popular online payment gateways:

Shopify fees

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 $0.30 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.

Stripe fees

The standard card fee for merchants using Stripe is 2.9% plus a $0.30 fee for each successful transaction. Beyond that, Stripe has a long menu of fees for various products and payment types.

Square fees

Square’s merchant fees include a 2.9% plus $0.30 fee for online transactions, a 2.6% plus $0.10 fee for in-person transactions made with a POS, and a 3.3% plus $0.30 fee for invoices.

Venmo fees

Venmo payments sent to businesses are charged at 1.9% plus a $0.10 fee. For contactless Venmo payments made using Tap to Pay on iPhone or Android, the seller transaction fee is 2.29%, plus $0.10.

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.