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What Are PayPal’s International Fees and How to Avoid Them

PayPaL International Fees

PayPal’s International Fees are a pain for every online business owner (particularly if you operate internationally).

These fees are charged on all cross-border transactions, where the currency of the paying party is different from the currency of the receiving party.

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This is extremely easy to do if you use PayPal as your payment gateway for selling/buying goods online (which you should).

Unfortunately, this means that every transaction you process through PayPal will attract fees.

In this guide we’ll simplify everything you need to know about PayPal’s International Fees.

Is It Possible to Conduct International Transactions Using PayPal?

Yes! PayPal has over 200 different countries where users can utilize the app or website to make cross-border payments and transfers.

However, the process is different depending on whether both senders and recipients of the money have a PayPal account. If both persons using it have a PayPal account, the transaction can be handled through PayPal.

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What Are PayPal’s International Fees, and When Should I Expect Them?

There are two different payment options for international money transfers:

1) PayPal.

2) MoneyGram.

The costs for each service are different.

When you send money directly to another PayPal account, PayPal charges a 5% fee on each transaction, with a minimum charge of $0.99 and a maximum charge of $4.99.

If the recipient’s PayPal account balance is insufficient to cover the cost of the transfer, a fee will be deducted.

There is a 2.9 percent fee plus a fixed charge (based on the currency used) if you use a credit card, debit card, or PayPal credit to pay.

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The PayPal International Currency Conversion Fee

To send money to a PayPal account in another currency, the sender must also pay a 3.5% conversion fee to US dollars.

Conversion fees are typically 4.5% plus the actual transaction cost, so keep this in mind when looking at different payment options.

You can’t send a payment straight to the recipient’s bank account with PayPal. You must use Xoom to do so.

The two systems are linked and may be funded with a PayPal account or linked bank account, allowing payments to be made using the Xoom service.

Unlike a set fee for transferring to another PayPal user, Xoom adds a mark-up to the current market price.

If the EUR to USD currency exchange rate is 0.913, Xoom may offer to perform the transaction at a rate of 0.902 rather than the market rate of 0.99.

The table below shows how these costs are levied.

FeesAdditional Charges
Transferring to another PayPal Account5% of the transaction amount$0.99 minimum$4.99 maximum2.9% funding fee + a fixed fee based on the currency used when using a credit card, debit card, or PayPal credit to fund transaction.
Conversion fee if converting currency before sending. As of September of 2021, the current currency conversion spread is 3-3.75%.
Transferring directly to a bank account via XoomMark-up on exchange rate that varies by currency.Added fees when using a debit card or credit card. Fees vary based on currency and transaction amount

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How Can I Avoid Paying PayPal International Fees?

Only personal transactions made to friends and family in the United States are free with PayPal.

There are extra fees involved with international transfers and commercial transactions, as well as merchant rates for goods and services.

The cost of international money transfers varies depending on the amount and frequency of such transactions. While you can’t avoid PayPal’s transaction fees altogether, there are ways to minimize them.

Here are 4 ways to avoid paying PayPal’s international transaction fees:

1) Use Your PayPal account to complete funded transactions

The easiest approach to minimize the various costs charged by PayPal is to make a payment using your PayPal account.

You’ll be charged extra fees if you use a credit or debit card to make a payment, but not if you use your PayPal account.

This may not seem like a lot when only looked at in one scenario, but over time those costs add up.

2) Larger payments

When one PayPal account sends money to another, the fee is limited to $4.99.

This indicates that it costs the same to transfer $100 as it does to send $1,000, and so on.

Making fewer payments in bigger amounts keeps the cost per payment low.

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3) The fees charged by PayPal are added to the price

When it comes to foreign transaction fees, the cost of payment should be factored into the service’s price, especially if transactions are large or frequent.

It’s critical to figure out all the details ahead of time.

The cost of the service should include details on how often payments are made, what is being transferred, and the conversion rate utilized. This avoids any unpleasant surprises later on.

4) Fees deducted at tax time

PayPal’s costs, including credit and debit card fees, are a necessary expense of doing business and may be deducted from your taxable income at the end of the year.

This doesn’t necessarily reduce the cost of using PayPal, but it does allow you to recover some of your money through tax breaks.

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Accepting PayPal payments from other countries as commercial transactions

For a commercial transaction conducted online, PayPal charges a 2.9% base fee. In addition to this, PayPal collects an additional 1.5 percent for international commercial transactions and a fixed cost of $0.30 per transaction in the United States dollars on top of the 2.9 percent base fee.

Not to mention that there is also a currency conversion fee.

There’s a 4% currency conversion fee when you pay in a different currency rather than US dollars.

The entire process is rather expensive. So, knowing how much you should pay after all may be beneficial.

You may also be wondering whether there’s a way to lessen PayPal international transfer expenses, which can sometimes be hefty.

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FAQ

How can I avoid paying international fees when using PayPal?

1) Use Your PayPal account to complete funded transactions.

2) Larger payments.

3) The fees charged by PayPal are added to the price.

4) Fees deducted at tax time.

Why am I being charged an international fee by PayPal?

When a user permits PayPal to convert a foreign price into US dollars during an international transaction, PayPal incurs foreign transaction expenses.

Users are charged 3-4% of each foreign transaction just for changing the currency of their payment.

Is it better to use PayPal than international bank transfer?

Despite the fact that each bank account has a different way of comparing PayPal and a bank transfer, PayPal usually outperforms banks due to lower transfer fees, higher rates, and faster services.

How long does it take for PayPal to send money across borders?

A transfer may take two to three days to complete. PayPal claims that money sent from a bank account to an existing PayPal account may be processed more quickly than money transferred from a bank account.

How do I prevent PayPal from converting money?

1) First, you must log in to your PayPal Account and change the setting:

2) View Automatic Payments.

3) Manage Automatic Payments.

4) Set Available Funding Sources.

5) View Conversion Options.

6) Adjust Conversion Options.

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