How to Save on PayPal International Fees

Q: What are PayPal's Fees for Sending Money?

When you send money via PayPal, you may have to pay a fee . PayPal's money transfer fees depend on the following factors: Domestic vs International transfer Payment method used to fund your transfer Let's look at PayPal's fees separately for domestic and international transfers below. PayPal Fees for Domestic Transfers For domestic transfers done via PayPal, you will pay no fees if you fund your transfer via any of the following methods: Your PayPal wallet balance Your bank account linked with PayPal Your Amex Send account If you choose to pay with a debit or credit card instead, you will need to pay the below fees: 2.90% charge on the transfer amount Fixed fee that varies from country to country – for example, the fixed fee in US is USD 0.30, while in UK is GBP 0.20 PayPal Fees for International Transfers If you recipient is overseas, your PayPal transfer will be considered international since currency conversion in involved . For international transfers sent via PayPal, you will have to pay a fee of 5% of the transfer amount subject to a minimum fee of USD 0.99 and a maximum fee of USD 4.99. The other important point to be aware of when it comes to PayPal currency conversion fees is that the fee is not dependent on the payment method you choose. So, regardless of whether you fund the transfer with your PayPal wallet balance, linked bank account, debit card, credit card or Amex Send account, the fee is the same.

Send money overseas with WorldRemit to take advantage of bank-beating exchange rates

Updated Jul 09, 2024

By RemitFinder

PayPal has become a popular choice to send money to friends and family, as well as make payments for online purchases and business transactions. The ease of use and convenience that PayPal provides has led to massive adoption of their products.

You can also send money overseas using PayPal. The process is similar to domestic PayPal payments, but there are fees involved. Often, the cost of an international money transfer with PayPal can be prohibitive.

The good news is there are several best practices you can follow to save on PayPal international money transfer fees. In this article, we will present some tips to do so.

We will also touch upon some good PayPal alternatives to send money internationally so you can save even more on your international remittances.

An image of a table with a laptop, mobile phone and coins placed on it with the title - How to Save on PayPal International Fees

Can I Use PayPal to Make International Payments?

You can absolutely send international payments and money transfers with PayPal.

The process to send money overseas with PayPal depends on whether the recipient has a PayPal account or not.

If the recipient does have a PayPal account, you can send an international payment to them from within your PayPal account. In this manner, the end to end international transfer is fully handled within the PayPal ecosystem. Currently, PayPal allows you to send money to over 200 countries.

If the recipient does not have a PayPal account or wishes to get paid directly into their bank account, you will not be able to use PayPal to send money to them. Instead, PayPal will redirect you to Xoom to complete the transaction. Xoom is an international money transfer company owned by PayPal.

You can send money overseas with PayPal to another PayPal user, or with Xoom to non-PayPal users.

What are PayPal's Fees for Sending Money?

When you send money via PayPal, you may have to pay a fee.

PayPal's money transfer fees depend on the following factors:

Domestic vs International transfer
Payment method used to fund your transfer

Let's look at PayPal's fees separately for domestic and international transfers below.

PayPal Fees for Domestic Transfers

For domestic transfers done via PayPal, you will pay no fees if you fund your transfer via any of the following methods:

Your PayPal wallet balance
Your bank account linked with PayPal
Your Amex Send account

If you choose to pay with a debit or credit card instead, you will need to pay the below fees:

2.90% charge on the transfer amount
Fixed fee that varies from country to country – for example, the fixed fee in US is USD 0.30, while in UK is GBP 0.20

For domestic PayPal transfers, you will pay 0 fee if you use your PayPal wallet balance or linked bank account.

PayPal Fees for International Transfers

If you recipient is overseas, your PayPal transfer will be considered international since currency conversion in involved.

For international transfers sent via PayPal, you will have to pay a fee of 5% of the transfer amount subject to a minimum fee of USD 0.99 and a maximum fee of USD 4.99.

PayPal international money transfers cost 5% with min/max thresholds of USD 0.99 and USD 4.99, respectively.

The other important point to be aware of when it comes to PayPal currency conversion fees is that the fee is not dependent on the payment method you choose. So, regardless of whether you fund the transfer with your PayPal wallet balance, linked bank account, debit card, credit card or Amex Send account, the fee is the same.

Are there any Hidden Fees for PayPal International Payments?

In addition to the 5% fee that you will need to pay for your PayPal international money transfers, you will also have to pay 3-4% FX Markup for your transaction.

What this means is that PayPal currency conversion will cost you 3-4% as a markup cost on the foreign exchange rate that you will get on your international transaction. This is a pretty high markup on the exchange rate that will cut into the payout your recipient will get.

Since the exchange rate markup is something you may not notice upfront as a fee, it is called a hidden fee. From your perspective as a sender, the bad exchange rate acts similar to a fee and reduces how far your money can do.

You will also have to pay a hidden fee in the form of a high FX Markup for PayPal international money transfers.

How Much do PayPal International Transfers Really Cost? A Case Study

As discussed above, there are 2 types of fees that you will have to pay with PayPal – the 5% fee for your transfer amount and the hidden fee due to a lower exchange rate.

To put this in perspective, let's embark on a case study to show you how much you will really end up paying in fees on your PayPal international transfers.

To do this, we will compare PayPal with Revolut, a premier financial ecosystem that also specializes in international money transfers.

Let's look at the cost of sending USD 1000 to Australia from United States. The below table captures the cost of sending the above transfer with PayPal and Revolut.

Provider	Transfer Amount	Mid-Market Exchange Rate^	Provider Exchange Rate*	Transfer Fee*	Payout	FX Markup
PayPal	USD 1,000	1 USD = 1.4325 AUD	1 USD = 1.3824** AUD	USD 5	1,375.49 AUD	3.97%
Revolut	USD 1,000	1 USD = 1.4325 AUD	1 USD = 1.4324 AUD	USD 0^^	1,432.40 AUD	0.006%

*Exchange rates and fees as on January 14, 2023 for transfer to a bank account
**PayPal exchange rate calculated with a mid-point markup of 3.5%
^Mid-Market Exchange Rate from XE.com
^^With Revolut 0 fee promotion for 10 free money transfers for RemitFinder users
See how we calculate FX Markup

As you can see from the above simple calculations, the above US to Australia money transfer will cost you about 4% with PayPal, and nearly 0% with Revolut.

PayPal is an expensive way to send money overseas as compared to a money transfer specialist like Revolut.

Even though PayPal is convenient and easy to use if you have an existing PayPal account, you will lose money if you send international money transfers with them. We, therefore, recommend looking at other options.

Revolut is an excellent choice when sending money overseas. You get very high exchange rates with them. And the best part is that RemitFinder users get 10 free money transfers from the US when they sign up with Revolut.

How Can I Avoid PayPal International Fees?

Given the fact that PayPal charges fees for international transfers, you may be wondering if there are ways to avoid PayPal fees. PayPal's hidden fee in the form of lower exchange rates makes it even more important to lower your money lost in fees.

In the rest of this article, we share some best practices and tips to either lower or even avoid PayPal's international money transfer fees. Let's see what these are below.

Avoid paying in foreign currency if possible

The best way to avoid paying PayPal's international payment fees is to avoid currency conversion altogether. If your source and destination currency are the same, your PayPal transfer will be similar to a domestic transfer which attracts much lower or no fees depending on your payment method.

Check with your recipient if they can accept money in your local currency. This is especially relevant for business payments as many businesses have multi-currency accounts, and are able to sometimes accept foreign currency payments.

If your recipient can accept the same currency as yours, you can avoid PayPal international transfer fees as no currency conversion will be needed.

Avoid paying with a credit card

If you have to make international payments with PayPal, do not use your credit card to pay. This is because your credit card company may apply additional cash advance fees if you use it to make international payments. This would be yet another fee which will further eat into your money.

Avoid using PayPal altogether

Of course, the best way to avoid all of PayPal international fee is to avoid using PayPal in the first place.

As evidenced by our case study earlier, a USD 1000 international money transfer with PayPal costs about 4%. Compared to that, Revolut, a globally available and secure money transfer company, helps you send money overseas with 0% cost.

In addition to Revolut, there are numerous other money transfer companies available. You can search for them online by googling for international money transfer or international remittance.

Whilst you may be able to research money transfer companies one by one, the process may take significant time and effort.

Another efficient way is to rely on RemitFinder's online money transfer comparison engine. RemitFinder compares hundreds of international money transfer providers in an easy to understand comparison table. This will help you evaluate the pro and cons of various companies and pick the best one for your needs.

Send larger amounts in a single transaction

Recall that PayPal's fee for international money transfers is 5% of the transfer amount with a minimum and maximum limit of USD 0.99 and USD 4.99, respectively. This means that any amount higher than USD 100 will get charged a flat USD 5 fee.

This presents an opportunity to optimize your fees by grouping your money transfers if possible.

For example, if you send USD 100 weekly to a relative or friend overseas, you will pay USD 5 each time. This would result in a USD 20 fee per month for 4 weekly transfers. If you are able to send a single monthly transfer of USD 400, you will pay a USD 5 fee, thereby saving USD 15 per month.

Combine smaller PayPal transfers into a larger single transfer to minimize PayPal international transfer fees.

So, whenever you have an opportunity to group multiple PayPal international transfers together, do so as you will save more on fees.

Price your goods and services to include PayPal fees

If you cannot use any of the other ways to avoid or minimize PayPal international fees, one option you can use is to account for PayPal fees when pricing your goods or services.

Whilst this does not avoid or minimize PayPal fees, it serves to protect your bottom line as a business whereby you could pass some of the impact of fees to the consumer. Of course, the balancing act in this would be to still stay competitive with your pricing strategy lest you run the risk of losing business.

Deduct PayPal fees as expenses on your tax return

Finally, you can deduct PayPal international payment fees as expenses on your business tax return at the end of the financial year.

Any fees or business related expenses can qualify as potential deductions that may lower your taxable income. Make sure to consult with your tax advisor or consultant to ensure that you can claim PayPal fees as tax deductions.

Hopefully these strategies can prove useful to lower or even avoid paying PayPal international fees the next time you send to send money overseas.

Conclusion

PayPal is a convenient and popular way to send money to others as well as make purchases online and in stores. In addition to making domestic payments, you can also send money and payments internationally with PayPal.

However, international money transfers and payments sent via PayPal incur PayPal's 5% transfer fee as well as hidden fees that are a result of low exchange rates. Ideally, you would want to lower or altogether avoid the impact of PayPal's high international fees on your money transfers.

Consider using many of the tips and best practices we shared in this article to minimize or even avoid PayPal international fees. Of course, the best option is to completely avoid PayPal for international money transfers. Doing this will save you up to 4% of cost that you end up paying to PayPal for sending money overseas.

Do You Need To Find the Best Remit Exchange Rate for Sending Money Internationally?

RemitFinder is an online service that helps you track remit exchange rates. By checking and comparing the latest remit exchange rates, you can get the best exchange rate for your money transfers. RemitFinder, thus, helps you to get the best return for your hard-earned money.

Find the cheapest rate to transfer your hard-earned money - visit our site or download the app on Google Play or Apple App Store now.