How Much Are PayPal Seller Fees? A Quick Guide for Merchants
PayPal is one of the biggest payment processing solutions out there on the market. It’s definitely at the top when it comes to consumer brand awareness. As of Q4 2021, PayPal had 426 million users worldwide including both consumers and sellers. It enjoys a lot of brand reach and is quite an attractive option for new or small businesses.
The challenge is that PayPal does a lot. They offer a number of services and there is much confusion about its fees. Also, what works for personal accounts does not work for businesses. So we’ve compiled the ultimate list of PayPal seller fees to help cut through the confusion as well as some tips on how to save on these costs.
Let’s get started.
A quick rundown of PayPal seller fees
PayPal has been around since 1999. It started as a money transfer platform for friends and family and got its IPO in 2002. That same year it was acquired by eBay, and together they made PayPal the payment platform of the early internet.
Even before e-commerce businesses had the tools to accept credit cards, they accepted PayPal. It was the most widely used online payment platform for purchasing goods and services.
While many features remain the same, PayPal has also had to evolve to meet the market’s new needs. As those changes have taken place, its fees have become more complex.
What types of fees does PayPal charge merchants?
As would be the case with any payment processor, merchants (sellers) have to pay fees to accept transactions via PayPal. Some of those fees are for transactions, and others are for merchant services. But PayPal has a lot of payment options, payment types, and merchant services—including international payments and currency conversion solutions. These can all come at different costs.
The following quoted prices are from the PayPal Fee Changes August 2021 update.
PayPal digital payments
PayPal digital payments include invoicing, PayPal Checkout, PayPal Guest Checkout, paying with Venmo, or other commercial online transactions through PayPal payments. These are digital payments, not payments made through a virtual or physical terminal with a debit card or credit card.
For these, PayPal charges 3.49% + a $0.49 fee.
Standard debit and credit card payments
PayPal’s Standard solution is the most traditional version of payment processing. Consumers would use their traditional credit or debit card (Visa, Mastercard, etc.) via PayPal’s virtual or physical terminal, and merchants are charged Standard rates.
Standard rates are 2.99% + $0.49 per sale. This is for both debit and credit card payments.
Note that these fees are not the same if using PayPal’s Advanced credit or debit card processing. QR code payments, international transactions, and charity organizations also attract different rates. All of these can be found below.
Send and receive money for goods and services
Sending and receiving money for goods and services is essentially the original PayPal service. In the latest fee change, the rate to send money has decreased to 2.89% + $0.49.
Alternative payment methods fees
PayPal has a list of alternative payment methods (APMs) that it allows customers to use. These include payment methods like Apple Pay and a variety of real-time bank transfers that are approved in different locations. The full list can be found here.
These payments are charged at 2.59% + $0.49.
International commercial transactions
Commercial transactions from countries outside of the business location will attract an extra 1.50% on top of the domestic rates. For example, a Standard debit or credit card payment from an international card would be 4.49% (2.99% is the standard domestic rate + 1.50% for the international rate) + $0.49 per sale.
Transactions that aren’t processed through a customer’s PayPal account or a Guest Checkout will attract a credit or debit card transaction chargeback fee of $20 for purchases made in the US with US dollars.
Chargeback Protection Services are applicable for PayPal’s Online Card Payment Services.
A dispute fee may be charged when customers file a dispute claim or chargeback for any transaction processed through PayPal (the customer’s PayPal Account or Guest Checkout).
The standard dispute fee is $15, and high-volume dispute fees are $30.
Merchants with very low sales volumes may be able to receive Micropayments pricing for low-value transactions.
This rate is 4.99% + $0.09 for both Dynamic and Static Micropayments.
Merchants eligible for donations pricing will be able to get unique transaction rates specifically for receiving donations.
Donate buttons, generosity network, and PayPal Checkout for Donations all charge 2.89% + $0.49.
Charity transaction rates apply only to pre-approved businesses. If approved, 1.99% + $0.49 rates apply to all donations and commercial transaction payments received in a merchant’s PayPal account.
Note: Rates are different for PayPal Here. More on this below.
PayPal Here fees
PayPal Here is an on-the-go service for in-person payments. It’s subject to an application and approval process and attracts the following rates:
- Card present transactions: 2.70%
- Keyed-in transactions: 3.50% + $0.15
- PayPal transactions (in-store): 2.70%
- QR code transactions: 2.70%
Charity rates for receiving transactions using PayPal Here are the same as the rates above.
PayPal Online Card Payment Services fees
PayPal’s Online Card Payment Services receives domestic transactions through card payments.
The rates are as follows:
- Advanced credit and debit card payments: 2.59% + $0.49
- Credit and debit card payments (American Express/Amex): 3.50%
- Payments Advanced: 2.89% (decreasing) + $0.49
- Payments Pro: 2.89% + $0.49
- Payments Pro (American Express): 3.50%
- Virtual Terminal: 3.09% + $0.49
- Virtual Terminal (American Express): 3.50%
International transactions attract the usual 1.50% transaction fee.
Payflow Pro (payment gateway) fees
Payflow Pro is a customizable checkout page with a service called Payflow Link to make it easy for customers to click and pay while staying on your site (no moving off to the PayPal site to perform the transaction).
Payflow Pro and Payflow Link transactions are both $0.10.
QR code transaction fees
Aside from PayPal Here, QR code transactions attract the following rates:
- Purchases of $10.01 and above: 1.90% + $0.10
- Purchases of $10.00 and below 2.40% + $0.05
Currency conversion fees
PayPal currency conversion fees are one of the most common ways that merchant fees accumulate. These fees range between 3.00% and 4.00%. What that fee is may depend on the currency. The amount is disclosed at the time of the transaction.
PayPal Payouts fees
PayPal Payouts is a service to send bulk payments with fees charged for each payment.
That fee is 2% of the total transaction amount within the US, with a cap of $1. When using the Payouts API, it is just a fixed fee of $0.25. International PayPal Payouts are then 2% of the total transaction amount, with a cap of $20.
E-checks are sometimes offered as payment by customers. They’re essentially payments from their bank account that are processed from their PayPal account.
Those rates are the same as the PayPal digital payments and Standard debit and credit card payments listed in the top two sections on this list.
E-checks are not an ideal way to receive payments, though. They can attract a significant fee, with a maximum cap of $300.
These fees are extremely important to merchants that want to move their hard-earned dollars from their PayPal account into their bank account. Thankfully, standard transactions are free, but instant transactions will incur fees.
Transferring from the PayPal balance to a local bank account with an eligible linked bank account has no fee associated (as long as there are no currency conversions). However, this can take a few days. Instant transfers can be made for a fee of 1.50% with a minimum fee of $0.25 and a maximum fee of $15.
There are withdrawal limits of $25,000 per transaction for all transactions to local bank accounts.
Transferring to a card is slightly different. All transfers are instant, but they must be linked to an eligible debit card. Fees are 1.50% of the amount transferred with a minimum fee of $0.25 and a maximum fee of $15.
Limits on card transactions are $50,000 per transaction, $100,000 per day, $250,000 per week, and $500,000 per month.
Other PayPal fees for sellers
While the list above is comprehensive, there are still some surprise fees that can come up. Different currencies usually throw up the most surprises. If payments are received in a different currency, the fees will change depending on the fee for that currency. Exchange rates will also vary the amounts.
Refer to PayPal’s latest Fee Changes document to check for these rates.
How to save on PayPal fees
With PayPal’s business account, processing fees are unavoidable. But it is possible to reduce PayPal merchant fees by calculating the options and selecting packages that give the greatest value. Unfortunately, PayPal doesn’t help much with these calculations.
Here are a few tips:
When a new merchant signs up to PayPal, they automatically go on to the Standard plan. This is the one mentioned first in our list of fees. This one is the basic rate for everyone. It has no monthly fee. But it’s not the best value.
The Advanced plan is likely to be of better value for merchants with a reasonable sales volume. It does come with a $5 monthly fee, but the rates reduce to 2.59% + $0.49, and you get access to PayPal’s Chargeback Protection.
On the topic of Chargeback Protection, this can incur additional fees, but it also exempts merchants from the $20 chargeback fee when buyers dispute charges. It’s worth weighing up the pros and cons.
PayPal fee calculator
No one has time to crunch all those numbers, particularly when any small change can alter the calculation.
Thankfully, the internet is well aware of this challenge, and there are a variety of PayPal fee calculators online that can help. Our favorite is the US PayPal Fee Calculator, which is up to date as of February 2022. This site even suggests what to ask for from your customers so that you receive your ideal amount.
Is PayPal the right choice for merchants?
PayPal is one of the leading payment processing providers for a reason. Merchants can set up in minutes to start accepting payments. Consumers are already well versed with the system. There’s a lot to love.
On the other side, there’s a lot to weigh up to get real value from the system. Generally speaking, the larger the business, the less value PayPal can provide. The services are there, but the fees are astronomical for businesses with high sales volumes.
Even those still considered small businesses, established sellers are almost always better off with established enterprise-level payment processors. Payment Depot would be one such provider. While you’re crunching the numbers on PayPal fees, extend your calculations to compare them with Payment Depot. Or get in touch with us to learn about our transparent membership-based pricing so you can save more on processing fees.