Is PayPal Free? How Much Does it Cost?

Founded in 1998, PayPal is essentially a platform of electronic checks and money orders. It makes sending and receiving payments easy and is an integral part of countless shopping websites, from something as big as eBay to various other websites that don’t even have to be retail in nature. All in all, PayPal is a unique, innovative, groundbreaking service that makes online shopping significantly easier. The question of whether PayPal is free is one of those that can be answered both ways.

So, Is It Free?

PayPal is free but only for the buyer or sender. This means that you will never have to pay any sort of fee when you send money using PayPal. For instance, if you want to buy something on eBay, PayPal makes it easy and only a couple of clicks away.

Opening a PayPal account is also completely free. It doesn’t require you to download the mobile app, nor does it require you to verify your identity. Opening a PayPal account is simple and free.

But, Wait, It Isn’t Free?

Nope, PayPal isn’t completely free. As a buyer or money sender, you don’t pay any additional fees over the amount specified. That is when you’re buying with the same currency that is in your bank account. But if you want to buy something from a seller in Europe who won’t accept USD, currency conversion is going to have to take place, one way or the other.

Here, PayPal offers two options: convert with your card issuer (bank) and convert with PayPal. Usually, it is better to let your bank handle it, but this all depends on your bank’s conversion rate, which you may have to check with the bank. So, essentially, PayPal isn’t completely free for buyers in all instances, but it definitely isn’t free for the sellers or those who receive money.

Selling Fees

PayPal is definitely not free for sellers. The standard PayPal fee in the U.S. is 2.9% plus $0.30 per transaction.

Let’s say that you’re an individual selling a guitar for $500. The money that you receive in your PayPal will be around $15 less. The buyer, once again, does not pay any fees to PayPal.

Inter-Country/Region Payments

Yes, PayPal does charge additional fees for both sending and receiving payments to/from an entity outside of your country/region. These are all stated in PayPal’s User Agreement, usually 0.5 to 2% depending on the country.

Sending Personal Payments from a Card

When using a credit or debit card to send personal payments to someone else, there are fees that need to be taken into account. The fees for sending money to friends and family, i.e. personal payment fees, are subject to change, as stated on PayPal’s website, and you can always track these potential changes here. Additionally, PayPal will always disclose the exact amount of fees in advance before you confirm the transaction.

Sending Funds from PayPal to Bank Account

For U.S. PayPal account holders, withdrawing money to your linked bank accounts is always free and deposited the following business day. Furthermore, with the Instant Transfer option, however, you get to transfer funds much quicker (these transfers are typically completed in a matter of minutes).

Note that this is done through your debit card. Therefore, you must have a Visa or MasterCard debit card on file with PayPal in order to use Instant Transfers.

Account Types

There are three PayPal account types: Personal, Premier, and Business. The discrepancies between the three include payment, too.

Personal Account

First of all, Personal Accounts don’t get charged transaction fees when sending or receiving money via eChecks, Instant Transfers, and PayPal balance. However, the main downside to the Personal Account option is the high transaction fees for receiving money from credit/debit cards. Additionally, individual accounts receive limited support from PayPal merchant services.

Premier Account

The main benefit of having a Premier Account is the ability to receive unlimited credit card payments. Moreover, Premier Accounts receive the full support of PayPal merchant services and are eligible for lower fees when transferring money from credit/debit cards. E-commerce sellers with a high transaction volume are obligated to accept payments funded by credit cards. The transaction fees when receiving payment, though, are lower than Personal Accounts.

Business Account

These accounts are for business owners. Like the Premier Account option, Business Account holders can receive unlimited credit card payments with lower fees and have the full support of PayPal merchant services. In addition, this account supports multi-user access, which is fantastic for business owners.

After All Is Said and Done, Is it Free?

The definitive answer would be ‘no.’ In some instances, PayPal will not take any money from you, but all users, buyers and sellers, will likely have to pay some fees at some point. Regardless of this, PayPal is a vital service for online shopping and online money transactions.

Do you have any PayPal payment tips and tricks? Let us know in the comments section below!