Does PayPal work internationally? How Do I Avoid PayPal Fees

Does PayPal work internationally? In an era of unprecedented globalization, the world economy is more interconnected than ever. Advancements in technology have made it easier for businesses, big and small, to connect with international clients, customers, and partners.

One of the most critical developments has been the creation and adoption of money transfer services like PayPal. In contrast to traditional bank transfers, PayPal offers a relatively cheap, fast, and easy solution for businesses to make international payments to partners outside of the United States.

But the question on everyone’s mind is – is there a catch? Are there hidden fees or fine print you should be aware of? Let’s walk through all of your questions about Paypal fees.

Does PayPal work internationally?

The PayPal transaction fee is waived if you send money from your online PayPal account, a linked bank account, or from the PayPal Cash app. But you’ll be hit with a 2.9% fee and a 30-cent fixed transaction fee if you make a payment with your PayPal credit, debit, or credit card. International money transfers also come with different rules, according to PayPal’s terms.

PayPal work internationally

Can PayPal be Used for International Transactions?

The short answer is… yes! Paypal is available in over 200 different countries, giving companies the option to make cross-border payments and transfers via the app or website at However, the process differs slightly depending on whether or not both the sender and recipient have a PayPal account.

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If both users have a PayPal account, the transaction can be processed through PayPal. If the recipient does not have a PayPal account, the payment can be sent directly to their personal account (depending on the country they are in) via Xoom, another payment service owned by PayPal.

Both options offer relatively fast payment, and Xoom conveniently links with your PayPal to make tracking payments easier.

What Are PayPal’s International Fees?

PayPal offers two different payment methods for international money transfers, and each has its own fee structure. When sending money directly to another PayPal account, PayPal charges 5% of the transaction with a minimum fee of $0.99 and a maximum fee of $4.99.

This assumes the transfer is funded by a PayPal balance. If the transfer is funded by a credit card, debit card, or PayPal credit, a funding fee of 2.9% plus a fixed fee (based on the currency used) is also applied.

PayPal’s International Currency Conversion Fee

Additionally, if the sender needs to convert to a different currency before sending, the currency conversion fee is 4.5% or a different percentage amount if disclosed to you during the transaction.

PayPal’s currency conversion fee to US or Canadian dollars is 3.5% but is 4% for other currencies. PayPal also charges a 4.5% fee for conversion service, so it’s important to factor this cost in as well to any currency conversion you do.

See the table below to understand better how these fees are applied.

On the other hand, in order to transfer directly to a recipient’s bank account, you’ll need to send the payment via Xoom. Because Xoom is owned by PayPal, the two work seamlessly together, and the transfer can be funded from a PayPal account or linked bank account.

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Unlike the fixed percentage fee for transferring to another PayPal user, Xoom adds a markup to the current market rate.

For example, if the currency exchange rate from EUR to USD is 0.913, Xoom might offer to process the transfer at a slightly lower rate of 0.902. This means the recipient will receive less than the market exchange rate, and the sender will have to factor that into their payment.

PayPal Exchange Rate Explained

PayPal uses a specific process to set its exchange rate.

Twice a day, PayPal receives a wholesale rate quote from their bank. PayPal then adds a percentage to the wholesale rate quote. This helps them determine the retail foreign exchange rate to apply to currency conversion transactions.

When you transfer money from your PayPal account to your personal bank account, PayPal automatically converts your funds into your bank’s local currency. PayPal boasts competitive exchange rates comparable to banks and currency exchanges.

PayPal work internationally

PayPal International Fee Calculator

Try Tipalti’s PayPal Fee Calculator to quickly and accurately calculate your fees for any domestic or international transaction. Simply enter the transaction amount, the country of the transaction, and whether you want to view the total amount of fees or the total amount you’ll receive after fees.

The PayPal fee calculator is a handy tool for businesses looking to cut down on manual processing and human error and to spend more time strategizing on the bigger picture items.

How Do I Avoid PayPal Fees?

PayPal is free only for personal payments made to friends and family within the United States. For international transfers and business transactions, there are transfer fees as described above, as well as merchant fees for goods and services.

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Depending on the size and frequency of international transfers, the cost starts to add up. While there isn’t a way to avoid PayPal’s transaction fees altogether, there are ways to mitigate costs.

Here’s how you can best avoid paying full costs with PayPal’s international transaction fees:

Fund transactions using your PayPal account.

This is the easiest way to reduce the different fees charged by PayPal. Funding transfers with a Paypal account avoids the additional fees tacked on when using credit cards and debit cards.

For one-off situations, this might not make a major impact, but over time, those fees add up.

Make larger payments.

When transferring money directly to another PayPal account, the fee is capped at $4.99. This means that sending $100 costs the same as sending $1,000 dollars and so on.

Making fewer payments in larger amounts keeps the relative cost low. Xoom, on the other hand, is not capped in this way.

Factor PayPal costs into pricing.

When working with international partners, the cost of payment should be factored into the pricing of the service, especially when transactions are large and/or frequent.

It’s important to work the details out beforehand. The frequency of payments, transaction amounts, and exchange rates should all be factored into the cost of the service. That way, there are no surprises down the road.

PayPal work internationally

Above is information about Does PayPal work internationally? How Do I Avoid PayPal Fees that we have compiled. Hopefully, through the above content, you have a more detailed understanding of PayPal work internationally. Thank you for reading our post.

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