What are the fees for receiving money on PayPal? Is there a fee for receiving money on PayPal?
Online payment is a necessity in this modern world. We are living in the information age and the world is now a global village. You might prefer working as a freelancer, so you need to be paid by your client.
There are unlimited ways of getting paid in this modern world, there are many payment processors and PayPal is one of the most popular. So if you have decided to receive money from your client through PayPal you might be wondering if there are fees for receiving money on PayPal.
I will be answering all of your questions related to the PayPal fee to receive money or to send money. In short, I will explain the fee structure of Paypal so that you know what will you be paying extra in order to send or receive money both domestically or internationally.
Let’s dive in…
Do You Have to Pay Fee on PayPal?
PayPal is one of the most used online payment platforms. It was founded in 1998. Many freelancers receive money through PayPal. It is a quick way to receive money for your services.
Some of the transactions on PayPal are free and for some PayPal charges fees. You might have to pay fees for receiving money on PayPal in some cases and for others, PayPal doesn’t charge you a fee to receive money.
You can say that this is the downside of PayPal that this is a downside of PayPal that its fee depends on the context.
I know it’s not pleasing to handover your money as fees for receiving money on PayPal but unfortunately, there is no other way if you are using PayPal for your online transactions you will have to pay a fee for the services.
Let’s talk about PayPal and the fee that it charges on transactions in different situations. I will try to explain everything that you need to know about the PayPal fee.
What is PayPal?
If you want to reduce the fees for receiving money on PayPal or for sending it, you need to understand how does this platform work. If you know the good and the bad of any online platform you will be better equipped to tackle the costs.
So let’s understand How PayPal works and its Pros and Cons.
PayPal is an online payment account, you can link your bank account to PayPal and use it to transfer money domestically as well as internationally. PayPal is not a bank so you need to connect it to a bank.
You can keep money on your PayPal account as well as in your bank and transfer it to other bank accounts or PayPal accounts.
Creating a PayPal account is free, you do not have to pay fees to sign up for a PayPal account. Founded in 1998 in the U.S, PayPal has grown its popularity across the world and is now available in 200 countries.
Security of your data is one of the primary focuses of PayPal. We are now living in a world in which we are forced to pay online to e-commerce shops, if you are not comfortable using your bank information, then PayPal is the solution to your problem.
You can buy everything from an online store through PayPal without compromising your Bank or Credit card information.
There are many ways to receive money on PayPal, you can either link your PayPal account to your Bank account, or you can choose to link your debit or credit card. Once linked you will be able to receive the money within minutes.
Now, you might be thinking where does the money go when someone sends it to you, Will you receive it in your bank account or PayPal?
PayPal acts as a medium of payment between the sender and the bank. So if someone sends you the money, it will first be stored in your PayPal wallet, Not in your Bank Account. So you can use it from your PayPal account directly. You can also deposit it to your bank if you want.
For some transactions, there is no PayPal fee to receive money, but Keep in mind that PayPal has a fixed flat fee for specific types of transactions. So no matter what you will have to pay that.
What are the Fees For Receiving Money On PayPal?
Now that you know how PayPal operates, its time to discuss the fees for receiving money on PayPal.
First thing first, you will be charged a percentage of the total amount of money you will receive. The flat fee is a must, it doesn’t matter you are sending or receiving money, you will have to pay the transaction fee in most cases.
If you are a seller, the transaction fee may sometime confuse you, as there are multiple factors that affect your transaction fee.
I want you to understand the reasons for which PayPal is charging a fee to receive money. Once you understand that it will be easy to understand why sometimes you have to pay more fees and sometimes less.
these are the common reasons for which you will have to pay a fee:
Reasons for Fees For Receiving Money On PayPal
1- If you are receiving money from a person who is in a different country than yours.
2- You will have to pay fees for receiving money on PayPal if you are getting a payment for a good or service.
3- PayPal fee to receive money is applied if the payment is made through a linked bank account or credit/debit card rather than the PayPal wallet.
4- If you are transferring money from your PayPal account to your credit or debit card.
There is an exception though, There is no PayPal fee when receiving money from your friends and family if there is no currency exchange involved. So you can receive money from your family within the U.S or other countries that use USD as official currency without paying any fee.
Now Let’s dive deeper into PayPal fees structure.
Who Has to Pay Fees for receiving Money on PayPal?
Everyone, You will have to pay fees for receiving money on PayPal no matter what. However, the rates are different if you are a consumer or a merchant. Let’s talk about consumers first.
Consumer Fees For Receiving Money On PayPal
PayPal considers payment as Domestic if you are receiving money from another PayPal user within the same market. PayPal will decide whether the sender and the receiver belong to the same market or not, based on the information provided by the users.
PayPal fee to receive money domestically is different than the fees for receiving money internationally.
PayPal Fee to Receive Money Domestically
If you are receiving money from your friends and family domestically, you do not have to pay any fee to PayPal. Make sure that you initiate this payment by going through the “Friends and Family” tab of the “Send Money” flow.
PayPal Fee to Receive Money Internationally
If you are receiving money from your friends and family, and the payment is international, PayPal will not charge you any fee if there is no currency conversion is involved. If currency conversion is involved PayPal will charge a fixed fee.
Fees For Receiving Donations on PayPal
PayPal charges you a fee if you are receiving a donation. PayPal has listed types of transactions that fall under the category of donations. You can check if your transaction falls under that category to calculate the PayPal fee to receive money.
Fees for Receiving Domestic Donations
As PayPal is a very popular payment platform, it is accepted in 200 countries and supports over 20 currencies. People use it as a method to donate money. If you are setting up your PayPal account to receive donations, these will be the fees for receiving domestic donations on your PayPal account.
If the payment was initiated through Donate Button in PayPal you will have to pay 2.89% of the total fee along with the fixed fee based on the currency that you have received the donation.
The fixed Fee to receive a donation in USD is $0.49. Let’s say you have received a donation of $100.
2.89% of $100 is $2.89.
So the total PatPal fee to receive this money will be, $2.89 + $0.49 = $3.38
Fees for Receiving International Donations
People use PayPal to donate money across the globe because it is safe and is faster than regular bank transfers. If you are receiving an international donation PayPal will charge you an extra 1.50% of the total amount on top of the charges that are applied to a domestic donation.
So if you are receiving a $100 donation internationally, the PayPal fee to receive money will be:
These are the fees that you will have to pay for receiving money on PayPal if you are a consumer. If you are a seller then the fees are different. Now let’s discuss what are those.
Fees For Receiving Money On Payal for Sellers
PayPal is a great platform for merchants too. If you are providing goods and services, you can receive your payments through PayPal both internationally and domestically.
Many freelancers and online stores accept payments from PayPal and if you operate within the countries that support PayPal payments, it is definitely a great way to receive money. There are some situations in which you will have to pay fees for receiving money on PayPal. Let’s discuss them in detail.
PayPal Fees to Receive Domestic Transactions
To make things simpler, keep in mind that a fixed fee is a fee that PayPal charges based on the currency that is used to pay.
If you are Merchant PayPal will charge you 3.49% of the total amount on Invoicing, PayPal Checkout, and PayPal Guest Checkout, Venmo Payment, plus the fixed fee.
The table below shows the Fee to receive money on PayPal if you are a Seller.
PayPal Fee to Receive International Transactions
If you are receiving money from across the border, you will have to pay additional fees for receiving money on PayPal.
The fee that you have to pay for domestic payments stands, now you will have to pay the fixed fee that depends on the currency that you have received the amount in.
Fees to Receive Charity Transactions
As a merchant, if you are receiving a domestic charity you will have to pay 1.99% of the total amount on top of the fixed fee.
If you are receiving charity from the international sender, you will have to pay an extra 1.50% of the total amount on top of the domestic charges.
Alternative Payment Methods
This is a great feature of PayPal, if you are a merchant you will be dealing with people across the globe, and it is not necessary that everyone is using PayPal.
Asking your client to transfer money to your Bank account is an option if they don’t have a PayPal but it is not convenient for your client to add many bank details to make the payment.
PayPal allows the merchants to receive money from other payment methods too. So you receive money to your PayPal account even if your client doesn’t have a PayPal. However, you will have to pay fees for receiving money on PayPal in this case.
Any payment that you receive to your PayPal account will be subjected to a 2.59% + Fixed Fee for a domestic transaction.
An additional 1.50% will be added if you are receiving money from APMs internationally.
PayPal Fee Calculator
I know there is too much to remember about fees on PayPal. There are so many terms and many different situations. So it is hard to remember the fees charged.
So I am including a PayPal Fee Calculator for your ease. This calculator will help you to calculate the fee that you will be paid to PayPal for receiving money.
Make sure that you enter all of the information correctly to get accurate results. You can also calculate the fee manually but I think it requires a lot of manual work and going through documents to figure out which fee applies to which situation.
It doesn’t matter what payment method are you using, if you are aware of the fees, then you will always avoid confusion.
A complete breakdown of PayPal Fees
I am sure you now know that you have to pay a lot more fees if you are a merchant. PayPal fees for personal accounts are way less than the business accounts. So let’s now discuss the fee for online businesses.
There are so many fees that you will have to pay if you are making business transactions through PayPal. If you have a small business it is much better to use other online payment platforms for small businesses like Cash App.
Fees To Expect on PayPal
If you are running an online business, expect to pay a fee every time your client makes a purchase. Keep in mind that there is no fee for the client to make the purchase.
Let’s say you are a graphic designer and you are running a firm that provides services related to graphic designing. Every time someone pays for your services through PayPal you will have to pay fees for receiving money on PayPal.
I am going to make generalized groups of fees that you can expect to pay for receiving money on PayPal.
Fees for Receiving Money on PayPal within the U.S.
If your business is only operated within the U.S then you will have to pay 2.9%+ $0.30 every time you receive money on PayPal for a purchase that your customer makes Online.
For in-store purchases, you will have to pay % a 2.7 + $0.30 on each transaction. You will be paying less if your business has a store or outlet.
If your business also operates outside of the united states, and someone makes a purchase internationally you will be paying a fee of 4.4% + $3.0 instead of the standard fee of 2.9%.
If a customer from another country visits your store and makes a purchase through PayPal you will be paying a fee of 4.2% + 0.30 for receiving money on PayPal.
Currency Exchange Fees
As we have already mentioned that PayPal operates in more than 200 countries and accepts payments in 20 currencies. So chances are that you may face a situation in which your client pays in a different currency than yours.
In this PayPal will have to convert the amount to your currency and it charges a fee for this service.
Most of the time you will be paying a 2.5% PayPal fee to receive money on a purchase. Now, this is a fee that additional. You will have to pay the standard fee, (Domestic or International) plus the currency exchange fee.
You can use the PayPal Currency Calculator to the information for free.
Fees For Non-Profit Organizations
Unlike many other payment platforms, PayPal allows its customers to register their business as a Non-Profit Organization. It is easy and you can receive your payments easily, however, each payment that you receive will be subjected to a PayPal fee.
A fixed fee of 2.2% + $0.30 will be applied to every transaction. If you are receiving charity funds of more than $100K per month, you can apply for a lower fee. You can avoid the fee for receiving money on PayPal if the donor agrees to pay the fee for you.
Fees for Receiving Money On PayPal Here
PayPal Here is a credit card reader with an app that allows businesses to receive payments. If you are using PayPal Here to collect payments, then the following are the fees that you will be paying
- Fee for a US Card Swipe: 2.7%
- Fee for Manual Transactions: 3.5% + $0.15
- Fee for Invoices: 2.9% + $0.30
- Fee for Cross-Border Transfers: 1.5%
Refund Payment Fees
As a business owner sometimes you will face a situation where you have to refund the money to your Customer.
Refund through PayPal is not free. You will be charged for a refund. PayPal is gonna keep $0.30 of the total amount.
PayPal without a doubt is a great app to use, it is an awesome platform if you want to send or receive money online domestically or internationally. Yes, PayPal charges a fee on almost every transaction.
You will be paying fees for receiving money on PayPal in most cases. However, in return, you will be getting a flawless and secure financial platform that you can rely on.
What payment platform do you use for your daily transactions? Thanks for reading this article, I hope it was helpful and you have found the information that you were looking for, Please share your thoughts in the comments.
Your reviews and suggestions are of much value to me as well as to other readers.
Frequently Asked Questions
is there a fee to receive money through PayPal?
If you are receiving money from your friends and family and there is no currency exchange involved. Then there is no fee to receive money through PayPal.
However, if you are receiving money as a result of selling a product or service you will be subjected to a fee. This fee may depend on various factors.
Why did PayPal Charge me a Fee for receiving Money?
PayPal is an online payment platform, unlike other online P2P platforms, PayPal charges a fee if you receive money from someone who is not your “Friend or Family”. You will also be charged a fee for receiving money if it was a donation or charity.
PayPal charges the receiver of the money if the payment was made in a different currency or internationally.
How much does PayPal charge to receive $100?
Well, it depends, If you are receiving $100 from your friends or family which is also known as a personal transaction. If you are receiving a personal transaction that involves a currency conversion you will have to pay a fixed fee depending on the currency that you are receiving the money in.
If you are not receiving the $100 as a personal transaction then PayPal will charge you 2.9% + $0.30 (most of the cases). The fee may vary depending on the context.