You can use PayPal to send money internationally or to pay overseas suppliers, but typically it's not the cheapest option. In this guide, we take a closer look at PayPal, its fees and compare them to other money transfer options for businesses.
PayPal is the most recognised digital-payment brand in the world. It offers a quick, hassle-free way to send and receive money online using an email address and your credit or debit card. It has 325 million active account holders, trading across more than 200 markets in 25 currencies.
While PayPal is a quick and easy way to transfer money and has great features, further inspection of its fine print shows that fees can be very high, especially for those sending large amounts of money overseas regularly.
You can use PayPal as an individual or as a business. Each allows you to send money domestically and internationally, but there are differences in fees and services.
PayPal's exchange rates are calculated by third-party financial institutions and updated multiple times a day to reflect the fluctuating market. Depending on the transaction, PayPal may add a margin of up to 4% to the mid-market rate. For one-off payments, you might find business transfer services with more favourable exchange rates.
When it comes to fees, PayPal's fine print is rather complicated. While creating a PayPal business account is free (and there are no withdrawal or cancellation fees or locked-in contracts), if you're a merchant or a business receiving money from buyers outside of Australia, you'll be required to add a fee for international commercial transactions. This is on top of the standard rates for receiving domestic transactions, which range from 0.90% to 2.60%.
The additional fee comes in 2 parts:
| Transaction type | Fee |
|---|---|
| All commercial transactions | 1.50% |
| QR code transactions - 10.01 AUD and above | 1.90% + fixed fee |
| QR code transactions - 10.00 AUD and below | 1.40% + fixed fee |
If you're accepting payments in other currencies, the percentage will be the same as stated in the table above, but the fixed fee will vary according to the currency you're receiving.
| Currency | Fee |
|---|---|
| Australian dollar (AUD) | 0.30 AUD |
| Brazilian real (BRL) | 0.60 BRL |
| Canadian dollar (CAD) | 0.30 CAD |
| Czech koruna (CZK) | 10.00 CZK |
| Danish krone (DKK) | 2.60 DKK |
| Euro (EUR) | 0.35 EUR |
| Hong Kong dollar (HKD) | 2.35 HKD |
| Hungarian forint (HUF) | 90.00 HUF |
| Israeli new shekel (ILS) | 1.20 ILS |
| Japanese yen (JPY) | 40.00 JPY |
| Malaysian ringgit (MYR) | 2.00 MYR |
| Mexican peso (MXN) | 4.00 MXN |
| Currency | Fee |
|---|---|
| New Taiwan dollar (TWD) | 10.00 TWD |
| New Zealand dollar (NZD) | 0.45 NZD |
| Norwegian krone (NOK) | 2.80 NOK |
| Philippine peso (PHP) | 15.00 PHP |
| Polish zloty (PLN) | 1.35 PLN |
| Russian ruble (RUB) | 10.00 RUB |
| Singapore dollar (SGD) | 0.50 SGD |
| Swedish krona (SEK) | 3.25 SEK |
| Swiss franc (CHE) | 0.55 CHF |
| Thai baht (THB) | 11.00 THB |
| UK pound sterling (GBP) | 0.20 GBP |
| US dollar (USD) | 0.30 USD |
PayPal has varying fees for its QR Code transactions, depending on the value:
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