Why Is Paypal So Expensive? (10 Reasons Why)

Paypal is a payment service, which makes it easier to buy, sell or receive money. PayPal is one of the most used services on the Internet.

If you use or plan to use PayPal, you may be wondering why the fees are so high. I looked into PayPal’s fees, and here is what I found.

Why Is PayPal So Expensive In 2022?

With the passing of time, PayPal has seen changes to its policies and processes. Now, there are several types of fees that can be charged to users, and some of them are higher than the standard fees that are charged by the company. The company used to have a flat fee of $10 per transaction, or $25 per transaction for every recipient. Since then, the company has modified its policies to include higher fees for some transactions. Now, there are three types of fees that PayPal charges.

If you want to know more about how much PayPal fees cost and how much money your money is worth before you send it, then read on!

1. Merchant Fees 

There are different fees that apply to merchants and sellers on PayPal’s platform.

The most common fee that applies is when you receive a payment from the purchase of the good or service you are selling. This is commonly considered a Commercial Transaction. Other examples of fees that apply are when you are an affiliate of a company and they decide to sponsor the purchase or use your services.

There are different fees for different countries, and those numbers may have changed.

When receiving international payments, the standard fees apply. Additional fees apply for international commercial transactions.
When issuing international payments, there is no fee for domestic payments, but for international payments an additional fee applies.

For example, if you have a business that accepts Euros and you decide to change your business account from ACH to CHAPS, you can save 0.025% on your business transaction. To see the fixed fees, see “Commercial Transaction Rates” in this section.

2. International Fees and Currency Conversions

If you are sending money to someone else in another country or region, there are additional fees. There is also an additional fee in case of currency conversion.

If it’s a personal payment, you pay the transaction fee. If it’s a good or service, usually the exchange rate is used to figure out the fee.

The rate for currency conversions is either
1% or 0.5%.

1% for all those who are born in the U.S. (regardless of where they apply for the visa).

All transactions that involve currency conversion have a 3% (EUR) fee.

3. Withdraw and Transfer Fees

You can make a withdrawal from your bank account without paying a currency conversion fee.

We have provided a few examples to give you a clearer understanding of this.

Unfortunately, if you have to use a wire transfer or a check, or currency conversion, there are hidden fees.

The minimum fee is 0.25 EUR per transaction. You can pay up to 500 EUR per year, and the maximum is 4,999 EUR per year.

The amount you make will never be less than 0.25 cents, and never more than $15.

I’ve made a research on the subject and I must say that if you have an account with a big bank, you’ll not pay any fees to withdraw money from it.

The following example shows that the second sentence can be omitted.

4. Fees From Merchants Outside of PayPal

PayPal has a few fees that they charge, but they are no different than any other service provider.

If a merchant doesn’t accept PayPal, a customer could go to their bank or credit card company to pay using their preferred method.

5. Cryptocurrency Fees

There’s an additional cost when buying, and there are fees when selling.

US $1,000 in legal fees to represent the defendant, and
US $2,000 in fees to represent the plaintiff. The plaintiff
already has represented himself at trial.

6. Donation and Charity Fees

If you receive a domestic donation or charity transaction, it has a specific fee rate.

Further, charitable donations are subject to the application process and pre-approval through Paypal.

Also if you don’t receive payment through PayPal’s set payment types for paying for services, then it’s not considered a payment and will have a different fee rate.

For now, if you have other payment methods for donations, you can use them. If you’re unable to use them, you can try contacting them to get your money transferred.

For donations the fixed-rate is based on the currency in which the donation is received.

If you are receiving donations in a specific currency, and you want them to be processed in a different currency, you need to calculate the correct amount in the currency you want the donations processed.

If you are receiving an international donation, the standard fee for receiving domestic donations applies, plus the “Additional percentage-based fee for international donations” that is charged to international donors, listed above.

The fee rate for receiving international charity transactions is 0.99% plies 0.5% variable rate.

In addition to the fee rate for receiving international charity transactions, the fee rate for making international charity payments is 1.99% plus an additional variable fee of 0.50% of the transaction value, plus an additional fixed rate of 1.50% of the transaction value.

Also, the same donation fixed fees is based on the currency received, not the currency sent.

The table below shows the rate a fixed fee applies, when the money is to be received. For example, if you are donating $10, you will receive a $3 fee, as it is in U.S. dollars, and is the lowest rate. If you donate $10,000, you will pay a $3,000 fee, as it is in U.S. dollars, and is the highest rate.

7. Credit or Debit Card Fees 

If you process a card you can expect to get hit with a fee. The average credit card processing fee is 1.3% to 3.5% of the transactions.

PayPal’s rate for processing credit or debit cards is 2.9%, a standard PayPal fee of $0.30 per transaction.

If you are looking for a company that has some great benefits and also one that has the highest payout, PayPal might be the one.

8. Alternative Payment Method Fees

PayPal also allows businesses to link an alternative account payment method but there are associated fees and PayPal does not give you the ability to offer a commission on the transaction.

PayPal’s fees rate for APM’s is 2.59% plus fixed-rate. In addition, if receiving an international APM transaction, the standard fee of 2.59% plus fixed-rate applies, plus 1.50%.

The transaction fee depends on the currency exchange rate.

To see the other terms and fees for Fixed fee Payment Method, click here.

If you are having trouble with your APM payment, or if you have any questions, please call us at the number below. We are always here to help.

9. Dispute and Chargeback Fees

As long as you are processing transactions through your PayPal account, PayPal will charge you for every transaction that occurs on your behalf
within that account. For example, if you charge a credit card using a
PayPal checkout solution, PayPal charges you for that transaction
even though it wasn’t processed on your behalf.

It seems like even when you are the buyer yourself, you still have to pay the fees that PayPal charges.

You will either send this transaction to another address or keep it as is. In either case, you will have to pay a fee in the currency of the original transaction.

Click the link to see the fees in each currency, click “Dispute Fees” or “Chargeback Fees” and you will see the fees for each payment method in the currency of each supported country.

10. PayPal Raised Some of Its Fees 

Unfortunately, on August 2, 2021, PayPal raised its pricing for all of its services. The fee goes from 2.9% plus $0.30, to 3.4% plus $0.49 for each transaction.

If you want to know more about PayPal, we have also made other related posts. Also, if you want to know more about PayPal, please read our related posts below.


The company offers discounts for paying with credit card, but the credit card transactions still take the same amount of time as a PayPal transaction. In addition, credit cards often have a service fee for using them.

You can only pay for the card with the code you created when you bought the card, so the price is different based on the amount of time you spent on it.
The amount you pay is different in a daily basis depending on how much time you spend on it.

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About the author

I have always been a shopaholic. A lot of times my questions went unanswered when it came to retail questions, so I started Talk Radio News. - Caitlyn Johnson

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