PayPal transaction fees depend on how the payment is made and whether you’re sending money personally or accepting it as a business. For personal transfers funded by a bank account or PayPal balance, there’s no fee for domestic payments. Business transactions, which make up the bulk of PayPal’s fee revenue, range from about 2.29% to 2.99% plus a fixed per-transaction charge.
Personal Payment Fees
When you send money to friends or family within the U.S. using your PayPal balance or a linked bank account, PayPal charges nothing. The fee kicks in when you fund a personal payment with a credit or debit card, in which case PayPal applies a percentage-based fee to cover card processing costs.
Receiving personal payments from someone in another country is also free, as long as no currency conversion is involved. If the payment does require conversion from one currency to another, PayPal applies a currency conversion spread on top of the mid-market exchange rate, which effectively increases the cost of the transaction even if no explicit “fee” line item appears.
Business and Merchant Fees
If you sell goods or services and accept PayPal as a payment method, the fees vary based on how the transaction happens. Here’s how the main categories break down for standard domestic sales:
- Online checkout (PayPal Checkout): 2.99% + $0.49 per transaction. This is the rate when a customer clicks the PayPal button on your website and pays through their PayPal account.
- Online checkout (Expanded Checkout): 2.89% + $0.29 per transaction. This applies when a customer pays with a credit or debit card through PayPal’s guest checkout, without logging into a PayPal account.
- In-person card payments: 2.29% + $0.09 per transaction. This covers tap, swipe, or chip payments using a PayPal card reader at a physical location.
- QR code payments: 2.29% + $0.09 per transaction. Same rate as in-person card payments, applied when a customer scans your QR code to pay.
To put these in dollar terms: on a $50 online sale through PayPal Checkout, you’d pay about $1.99 in fees ($1.50 from the percentage plus the $0.49 fixed fee). On a $50 in-person sale, you’d pay about $1.24. The difference between online and in-person rates reflects the higher fraud risk associated with card-not-present transactions.
Micropayment Pricing
If your business processes a high volume of small transactions, typically under $10, standard percentage-based fees can eat into your margins quickly. PayPal offers a micropayment rate of 4.99% + $0.09 per transaction for eligible U.S. merchants. You have to apply for this pricing and get approved.
The higher percentage sounds worse, but the much lower fixed fee makes it cheaper for small amounts. On a $3 transaction, standard PayPal Checkout pricing would cost about $0.58 (2.99% + $0.49). Micropayment pricing on that same $3 sale costs about $0.24 (4.99% + $0.09). The breakeven point is roughly around $10 to $12, above which standard pricing becomes the better deal. International micropayments add an extra 1.50% to the base rate.
International Transaction Surcharges
Cross-border payments carry additional costs on top of the standard rates. For business transactions, PayPal adds a percentage-based international surcharge when the buyer and seller are in different countries. The exact surcharge depends on the countries involved, but it typically adds 1.50% or more to your standard processing fee.
For personal transactions received from abroad, there’s no fee when both parties use the same currency. But when a currency conversion is needed, PayPal sets its own exchange rate that includes a built-in margin above the base rate. This margin varies by currency pair and can range from about 3% to 4% above the mid-market rate, making it one of the more expensive ways to convert currency on smaller transfers.
Instant Transfer Fees
Moving money from your PayPal balance to a linked bank account is free if you’re willing to wait one to three business days for a standard transfer. If you want the money faster, PayPal offers an instant transfer option that deposits funds to your bank account or eligible debit card within minutes. This comes with a percentage-based fee subject to minimum and maximum caps. The fee is relatively small per transfer, but it adds up if you’re moving money out of PayPal frequently.
How Fees Affect What You Actually Receive
PayPal deducts fees from the payment before it reaches your balance. If a customer pays you $100 for an online purchase through PayPal Checkout, you receive $96.52 after the 2.99% + $0.49 fee is subtracted. You never have to send PayPal a separate payment for processing costs.
For businesses comparing payment processors, PayPal’s online rates are broadly competitive with similar platforms, though in-person rates at 2.29% + $0.09 tend to be slightly higher than some dedicated point-of-sale processors. The tradeoff is that PayPal doesn’t require a monthly subscription for its standard pricing tier, which can make it more economical for businesses with lower or inconsistent sales volume. High-volume sellers may find better per-transaction rates by negotiating custom pricing with PayPal or exploring other processors that offer volume discounts.