PayPal's credit card fees depend on what you're doing and who you are
PayPal does not charge you a fee straightforward for linking a credit card to your account. However, PayPal charges the person or business receiving money when a credit card is used to pay them. If you're sending money to a friend using your credit card, PayPal may charge you a fee depending on the transaction type. If you're a business owner accepting credit card payments from customers, you'll pay a processing fee on every transaction.
The fee structure differs sharply between personal transfers and business payments. Understanding which category your transaction falls into — and which payment method you choose — can save you money on every payment you make.
Key Takeaways
- Sending money to friends and family through PayPal costs nothing if you use your bank account, but costs 2.2% plus $0.30 if you use a credit card.
- Businesses accepting credit card payments through PayPal pay 2.99% plus $0.30 per transaction for standard payments, or 3.49% plus $0.30 for payments received through a PayPal.Me link.
- International transfers carry higher fees — typically 4.99% plus a fixed amount that varies by country.
- PayPal Credit (their buy-now-pay-later product) is separate from credit card fees and has its own terms set by Synchrony Bank.
- Fees are deducted from the amount received, not added on top, so the recipient gets less when a credit card is used.
Personal transfers: when you send money to friends
If you're sending money to another person through PayPal's "Send Money" feature, the fee depends on your payment method. Using your bank account or PayPal balance costs nothing. Using a credit card or debit card costs 2.2% of the amount sent, plus a flat $0.30 fee.
This fee applies whether you're splitting a dinner bill, reimbursing a roommate, or sending money across the country. The recipient receives the full amount you specify — the fee comes out of your pocket, not theirs. If you send $100 using a credit card, you pay $2.50 total ($2.20 plus $0.30), and your friend receives $100.
The math changes if you're sending money internationally. PayPal charges 4.99% plus a fixed amount that depends on the destination country, ranging from $0.99 to $4.99. These fees explore regardless of payment method for cross-border transfers.
Business payments: what sellers pay when customers use credit cards
If you run a business and accept payments through PayPal, you pay a fee on every credit card transaction. The standard rate is 2.99% plus $0.30 per transaction. This means if a customer pays you $100 with a credit card, you receive $96.71 after fees.
The fee is deducted automatically before the money lands in your account. You don't invoice the customer for it — you absorb it as a cost of accepting that payment method. Different payment routes through PayPal carry different rates. Payments received through a PayPal.Me link cost 3.49% plus $0.30. Payments received through PayPal's invoicing tool cost 2.99% plus $0.30.
If you accept payments in a currency other than US dollars, PayPal adds a currency conversion fee on top of the processing fee. The conversion rate varies daily and PayPal's markup is built into the rate they show you.
PayPal Credit and buy-now-pay-later fees
PayPal Credit is a separate product from credit card fees. It's a line of credit issued by Synchrony Bank that lets customers buy now and pay later through PayPal. As a business owner, you don't pay extra when a customer uses PayPal Credit — you pay the same 2.99% plus $0.30 processing fee as any other transaction.
The customer may face interest charges if they don't pay off their balance within the promotional period (often 6 months for larger purchases), but that's between them and Synchrony Bank. Your fee structure doesn't change based on which payment method the customer chooses.
How to minimize credit card fees on PayPal
If you're sending personal money, use your bank account instead of a credit card. The difference is significant: sending $500 costs $11.30 with a credit card but $0 with a bank account. Link your checking or savings account to PayPal once, and you can use it for all future transfers.
If you're a business owner, the fees are built into accepting credit cards online — you can't avoid them without refusing credit card payments entirely. However, you can reduce the total by encouraging customers to pay through methods that cost less. Some payment processors offer lower rates for ACH transfers or direct bank payments, though PayPal's rates are competitive with other major processors like Stripe and Square.
For large or frequent transactions, compare PayPal's rates against other payment processors. Stripe charges 2.9% plus $0.30 for credit cards, and Square charges 2.6% plus $0.30. The difference compounds quickly if you process thousands of dollars monthly.
What PayPal doesn't charge you for
PayPal does not charge a monthly fee to keep an account open, whether personal or business. You don't pay to receive money into your PayPal balance. You don't pay to transfer money from PayPal to your bank account (though the transfer itself takes 1 to 3 business days). You don't pay to link a credit card or bank account to your account.
The only fees you encounter are transaction fees — charged when money actually moves. If you link a credit card and never use it to send money, you pay nothing. If you receive money through PayPal using a payment method other than credit card, you typically pay nothing (though business invoices still carry the standard processing fee).
Frequently Asked Questions
Does PayPal charge me a fee just for having a credit card linked?
No. Linking a credit card costs nothing. You only pay a fee when you actually use that credit card to send money or when a customer pays you with one. Having the card on file doesn't trigger any charges.
Why does my friend receive less money than I sent?
If you sent money using a credit card, PayPal deducted the fee from the amount your friend received. If you sent $100 and used a credit card, PayPal charged you $2.50 in fees and your friend got $97.50. Using your bank account instead would have cost you nothing and your friend would have received the full $100.
Can I pass the PayPal fee to my customers?
Technically yes, but most payment processors' terms prohibit surcharging customers for credit card use. Some states also have laws against it. Check PayPal's current terms and your state's regulations before adding a fee to customer invoices. Many businesses instead build the fee into their prices across the board.
Are PayPal's fees higher than other payment processors?
PayPal's 2.99% plus $0.30 for business payments is in line with Stripe and Square. Some smaller processors charge slightly less, but the difference is usually under 0.5%. The real savings come from choosing the right payment method — using a bank account instead of a credit card for personal transfers saves far more than switching processors.
What happens if I dispute a credit card charge made through PayPal?
If you dispute a charge with your credit card company, PayPal will be notified and may freeze your account while the dispute is investigated. If the dispute is ruled in your favor, PayPal refunds the merchant. Disputes can take 60 to 180 days to resolve. Avoid disputes by confirming transaction details before you send money.