PayPal charges the seller 3.49% plus a fixed fee of $0.49 per transaction when someone pays for goods and services using a standard PayPal checkout. The buyer pays nothing. These fees apply to domestic U.S. transactions paid with a debit card, credit card, or PayPal balance, and they come out of the payment before it hits the seller’s account.
How the Standard Fee Works
The 3.49% + $0.49 rate is what most individual sellers and small businesses encounter when they invoice a customer, sell on a marketplace, or receive a “goods and services” payment through PayPal. On a $100 sale, that means PayPal keeps $3.98, and you receive $96.02. On a $25 sale, the fee is $1.36, leaving you with $23.64. The fixed $0.49 portion makes small transactions proportionally more expensive: on a $10 payment, fees eat about 8% of the total.
This rate applies specifically when you receive money classified as a commercial transaction. If someone sends you money using the “friends and family” option, no fee is charged (when funded by bank account or PayPal balance). The distinction matters because PayPal’s buyer protection only covers goods and services payments, which is why buyers often prefer that option and why PayPal charges for it.
Fees for International Transactions
When a buyer is located outside the U.S., PayPal adds an extra 1.50% on top of the standard rate. That brings the total to 4.99% + $0.49 for a cross-border sale. So on a $100 international payment, you’d net about $94.52 instead of $96.02.
If the payment also involves a currency conversion, there’s another layer. PayPal applies a currency conversion spread of 4% on goods and services payments. This spread is baked into the exchange rate PayPal uses, not listed as a separate line item, so you’ll see a less favorable rate than the mid-market exchange rate. Between the international surcharge and the conversion spread, selling to overseas buyers can cost roughly 9% of the transaction value in combined fees.
You can reduce the currency conversion cost by holding a PayPal balance in the buyer’s currency and converting it yourself later through a third-party service, though this requires a PayPal business account with multi-currency capabilities.
Other PayPal Payment Methods and Rates
Not every goods and services transaction uses the same rate. PayPal offers several checkout and payment products, each with its own fee structure:
- PayPal Checkout (standard): 3.49% + $0.49 per transaction. This is the default for invoices and most online payments.
- QR code transactions: PayPal charges a lower rate for in-person QR code payments, typically 1.90% + $0.10 for transactions up to $10 and 2.29% + $0.09 for those above $10. These rates are designed to compete with in-person card readers.
- PayPal guest checkout (card processing): When a buyer pays with a credit or debit card without logging into a PayPal account, the rate is generally 3.49% + $0.49, the same as the standard rate.
- Charitable organizations: Registered 501(c)(3) nonprofits can apply for discounted processing rates, typically around 1.99% + $0.49 for domestic donations received through PayPal’s charity tools.
PayPal also offers custom pricing for businesses processing high volumes, but you need to contact their sales team to negotiate those rates.
Who Pays the Fee
The seller always absorbs the fee. PayPal deducts it automatically from the incoming payment. If you sell a $50 item, you receive $50 minus the fee, not $50 with a separate charge later. Buyers see no processing fee on their end when paying with goods and services.
Some sellers try to pass fees along by adding a surcharge to their prices. This is common and generally allowed, though PayPal’s terms prohibit imposing a surcharge specifically for using PayPal if you don’t also surcharge other payment methods equally. The simplest approach is to factor the roughly 3.5% cost into your pricing from the start.
Dispute and Chargeback Fees
If a buyer opens a dispute or files a chargeback, PayPal may charge you a separate dispute fee on top of the original transaction fee. The amount depends on your dispute rate over the previous three months. Sellers with a dispute rate below 1.5% of total transactions pay the standard dispute fee. If your dispute rate hits 1.5% or higher and you’ve had more than 100 transactions in the previous three months, you’ll face a higher-volume dispute fee, which is significantly more expensive per case.
Even if you win the dispute, the original transaction fee is not refunded. PayPal does return the disputed payment amount if the case resolves in your favor, but the processing fee you paid on that sale is gone. This is a change from PayPal’s older policy, which used to refund fees on reversed transactions.
How Fees Compare to Alternatives
PayPal’s 3.49% + $0.49 is on the higher end for payment processing. Stripe charges 2.9% + $0.30 for standard online card payments. Square charges 2.6% + $0.10 for in-person transactions and 2.9% + $0.30 for online payments. Venmo (owned by PayPal) charges sellers 1.99% + $0.49 for business transactions.
Where PayPal earns its fee is buyer trust and reach. Many online buyers feel more comfortable paying through PayPal because of its purchase protection program, and the platform has over 400 million active accounts worldwide. For casual sellers on platforms like eBay, Facebook Marketplace, or Etsy, PayPal’s convenience and name recognition often justify the premium over cheaper processors that require more setup.
Reducing What You Pay
A few practical ways to lower your effective PayPal costs:
- Use QR codes for in-person sales. The rate drops to as low as 1.90% + $0.10, roughly half the standard online fee.
- Avoid small transactions when possible. The $0.49 fixed fee hits hard on low-dollar payments. Bundling small purchases into a single invoice saves money.
- Skip currency conversion through PayPal. If you sell internationally, receiving payment in the buyer’s currency and converting through your bank or a foreign exchange service can save you the 4% conversion spread.
- Negotiate volume pricing. If you process more than $20,000 per month, PayPal may offer lower rates through its merchant services team.