PayPal International Fees & How to Avoid Cross-Border Charges

Although PayPal is one of the most well-known money transfer and payment processor companies in the world, it is usually an expensive option for international wires, bank transfers, currency exchange, and business transactions. PayPal also updates its fee schedule often, making it difficult to keep track of its rates.

As a general rule, PayPal's transaction fees will be waived if you send money domestically from your online PayPal account, a linked bank account, or from the PayPal app. However, PayPall will charge a 2.9% fee and a 30-cent fixed fee if you make a transaction with a debit, a credit card, or your PayPal credit.

PayPal's international fees are even more expensive. Even if you send money directly using your Paypal balance or the PayPal app, you'll be charged high fees and bad exchange rates. In this end-to-end guide, we will offer tips for avoiding PayPal's international fees and offer cheaper alternatives, including Revolut, Cash App, and Payoneer.

If you want to make an international payment or money transfer, then we highly recommend you first run a search on our comparison engine below (since PayPal is never the cheapest option):

Does PayPal Charge a Fee to Send Money Domestically?

The basic principle to note is that domestic bank transfers and transfers between PayPal users are free of charge. You can use your PayPal balance to pay for a purchase or make a donation as long as it is a domestic transaction.

However, if you use a credit or debit card, then you will incur a 2.9% fee and a 30-cent fixed transaction fee. If you're a merchant or the host of a fundraiser, PayPal will charge you a percentage and fixed fees on every good or service you sell.

Can I Use PayPal for International Transactions?

Yes, PayPal is available in 200 countries, making it one of the most widely adopted financial platforms in the world. If both the sender and the receiver have a PayPal account, then PayPal will charge a foreign transaction fee:

• Foreign Transaction Fee: This fee is around 5% of what you send. But it will be at least $0.99 and no more than $4.99.

If your recipient does not have a PayPal account, then Xoom (which is owned by PayPal) will process the transaction. Xoom is a money transfer service that's integrated into PayPal that will help you send money to your recipient's bank account. However, it is usually very expensive for most countries and currencies.

Instead, we highly recommend using our real-time comparison engine to find better international money transfer rates than PayPal.

PayPal’s International Currency Conversion Fees

When you send money internationally to another account, PayPal will convert your currency to foreign currency and charge a fee:

• Currency Conversion Fee: The fee for changing US dollars to Canadian dollars is about 3.5%. For almost all other currency exchanges, this fee will be around 4%.

Remember, the currency conversion fee is in addition the foreign transaction fee. Plus, there isn't a minimum or maximum limit for this conversion fee (aka hidden exchange rate margins). The larger the transaction amount, the more you'll pay.

If you use Xoom to send money, they have their own fee system. Learn more with our in-depth Xoom review :

1. Xoom Commission: Xoom will typically charge between 2.9% and 3.3% of the total amount you are sending.
2. Exchange Rate Margin: In addition to the commission, Xoom also weakens the exchange rate against your favor. They usually add about 0.4% to 1.5% to the current rate, and they pocket this difference.

Fees For Making Withdrawals Out of PayPal

It is free to withdraw money out of your Paypl balance into your home bank account. This could take up to three business days, which is why PayPal offers Instant Transfers as a service for a 1.75% fee.

Also, keep in mind that the withdrawal limit for instant bank transfers is $25,000 per transaction. The withdrawal limit to debit or credit cards is $5,000 per transaction.

Merchant Fees: Selling With PayPal

PayPal's fixed fees for merchants who use the service to sell goods and services are so complex that they deserve an article of their own. The company offers many solutions for businesses to complete customer transactions.

In general, PayPal’s payment processing rates range from 1.9% to 4.99%, plus a fixed fee that ranges from 5 cents to 49 cents. In addition, be aware that you will lose money to their weak exchange rates if you receive transactions that require currency conversion.

As a business owner, the most common fee you will probably encounter is the rate for Standard Credit/Debit Card Payments:

• 2.99% plus $0.49 per transaction.

For a full and easy-to-navigate view of PayPal's fees, please reference the table below that we have prepared. Here is the information that corresponds to each tab:

1: Domestic Commercial Transactions

• 1a: Fixed Fee For Domestic Commercial Transactions
• 1b: Fixed Fee For QR Code 10.01 USD+
• 1c: Fixed Fee For QR Code 10.00 USD or Less

2: PayPal Online Card Payment Services

• 2a: Fixed Fee For Online Card Payment

3: Other PayPal Products

Fees For Receiving and Sending Donations With PayPal

It is free for you to send a donation via PayPal to a fundraiser domestically. If you send a donation to someone abroad, then you'll be charged the same currency conversion fees as any other international PayPal transfer.

Fees become a bit more complicated if you are the creator of the fundraiser who is asking for donations. We show this in the table below. What you need to know is that fees for using PayPal's 'Donate' button or PayPal's 'Checkout for Donations' both charge 2.89% plus a fixed fee. This fixed fee varies by currency (also shown in the table).

PayPal also offers listed fundraisers, which are promoted by PayPal on the web and app. The fee is 2.99%. However, if the fundraiser is unlisted and distributed by the host only, there is no fee charged.

Fees for Buying, Selling, and Transferring Cryptocurrencies on PayPal

When using PayPal to buy, sell, or transfer cryptocurrencies, fees will apply depending on the type of transaction (buying, selling, or transacting). Here's what you need to know:

Cheaper Alternatives to PayPal

PayPal has long been a popular choice for online payments, but it's not always the best option for every situation. Especially when it comes to travel and international shopping, PayPal's conversion fees can add up quickly and leave you with less money in your pocket. That's why it's worth considering some alternatives that may better suit your needs. We'll introduce you to three alternatives to PayPal: Revolut, Cash App, and Payoneer.

1 — Revolut

Revolut, on the other hand, is an international peer-to-peer solution that offers a multi-currency account. With this powerful account, you'll get the real mid-market exchange rate instead of a weak markup by PayPal. This makes Revolut a great choice for anyone who frequently travels or shops online from international marketplaces. Plus, Revolut also offers other features like fee-free ATM withdrawals and the ability to hold and exchange up to 28 different currencies.

2 — Cash App

Cash App is a domestic peer-to-peer platform that allows you to easily send and receive money from friends and family without any hidden fees. Unlike PayPal, Cash App has a straightforward fee schedule that is easy to understand, making it a great choice for anyone looking for a simple and transparent way to send money domestically.

It is becoming easier to use every day, as it is one of the fastest-growing peer-to-peer networks in the United States and the UK. You can send money for no fees and no exchange rate markups to the UK with Cash App too.

3 — Payoneer

For merchants, we recommend Payoneer. This platform offers good integrations into other online marketplaces and uses the mid-market exchange rate to do international transactions, meaning there's no exchange rate margin as you would see with PayPal. Instead, Payoneer charges a flat percentage fee when you withdraw funds to your local bank account. Payoneer also gives you unique bank account details in over 10 foreign currencies, making it a great choice for anyone who does business internationally.

How to Avoid PayPal's International Fees

PayPal fees can add up quickly for debit or credit card payments, instant transfers, and any transactions involving foreign currency. These fees can be steep for businesses too, making PayPal a less favorable option compared to its competitors.

To avoid PayPal fees, there are several strategies to consider:

1. Fund transactions through your PayPal account to avoid additional fees associated with credit and debit cards.
2. If you are operating as a business, compare the business fees offered by Revolut Business, Cash App business, and Payoneer.
3. Incorporate PayPal costs into service pricing when dealing with international partners, particularly for large or frequent transactions.
4. Deduct PayPal and other payment processing fees as necessary business costs, providing a potential avenue for recouping some of the expenses at tax time.
5. Most importantly, use an international money transfer service instead of PayPal to send money abroad.

According to Monito's search engine, PayPal is one of the worst options for converting currency and sending money abroad because they apply very weak exchange rates to your transfers. Use our comparison search engine below to find a more transparent and cost-effective solution 👇