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Guide to using PayPal for international money transfers

Learn what fees are involved when using PayPal to send money internationally or pay overseas suppliers.

Yes, you can use PayPal to send money internationally or to pay overseas suppliers, but it's not necessarily the best option. In this guide we take a close look at PayPal and its fees and compare these to alternative money transfer options for businesses and for people selling products and services online. Plus, you can compare money transfer services and dedicated accounts for online sellers.

What is PayPal?

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 processes over nine million payments every day, trading across more than 200 markets in 100 currencies. Australians love using PayPal too, with over five million active Aussie accounts opening up since 2005.

Advantages of using PayPal to send money internationally or pay overseas suppliers

  • Security. PayPal securely encrypts your financial information.
  • Flexibility. You have the ability to link all your cards and bank accounts and then choose which one to use at checkout.
  • User friendly. You can check out with one click on your computer, mobile or app. It’s great for people on-the-go.
  • Buyer protection. You can get a refund, including return shipping costs, if something goes wrong.
  • Software Integration. PayPal syncs in well with accounting software such as the popular XERO, so you can send invoices with absolute ease.
  • Free within Australia. You can send money and make purchases within Australia absolutely free.

While PayPal looks to be a quick and easy way to transfer money and has great features, further inspection of their fine print shows that fees can be very high, especially for those who need to send large amounts of money overseas regularly. First, let’s take a closer look at the types of PayPal accounts available and what exactly those fees are.

PayPal personal vs PayPal business accounts

PayPal charges different fees depending on the nature of the transaction. These fees aren’t very transparent on the PayPal website, and yet they can often be between 3% and 7% of the amount you transfer (more on fees below).

Firstly, take a look at the different types of PayPal accounts you can get to justify whether a PayPal business account is for you.

PayPal account types:

1. PayPal personal account:

  • There are no fees when buying goods within Australia.
  • This account is best for individuals who shop and pay online.
  • It’s best for those sending money to or receiving money from friends and family.

2. PayPal business account:

  • PayPal charges set rates based on your sales volume.
  • If you have multiple businesses, you can have a PayPal business account for each business providing each business is registered and has its own email, bank account and credit card.
  • This account is best for merchants who operate under a company or group name.
  • Your customers won’t need a PayPal account to purchase from you since they can pay as a guest.
  • PayPal offers additional features, such as allowing up to 200 employees limited access to your account and a customer service email alias so customer issues can be routed for faster follow-ups.

3. PayPal premier account:

  • This account is best for casual sellers or non-businesses who wish to receive payment online and who also make online purchases.
  • You cannot display a business name or business logo graphic with a premiere account. Customers would only see your email address on the PayPal checkout screens.

PayPal allows users to have two accounts under the same email, bank account and credit card, giving you the convenience of keeping your personal PayPal account while also opening up either a business PayPal account or a premier PayPal account.

PayPal business fees

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), PayPal does charge set rates based on a business’s sales volume.

When sending money overseas, the sender does not incur any cost, but the recipient is slugged with a fee of up to 4.6% plus another fixed fee. This is in addition to any exchange rates and associated fees that PayPal applies. The fixed fee for a commercial transaction is AUD$0.30 while the exchange rate is the market rate plus 4% for most currencies.

In addition, these fees can rise even higher as a result of the selected payment method (eg, if payment was with a debit card or credit card rather than a bank account or PayPal balance) and the payment destination (ie, country recipient).

1. Cross-border transaction fee

PayPal charges a fee for transactions outside of Australia and PayPal determines the amount of this fee based on the country recipient. The fee is up to 3.3% for money sent from your PayPal balance or linked bank account and up to 5.2% for a transaction using a debit or credit card. There is also a fixed fee of AUD$0.30.

2. Foreign exchange fee (currency conversion)

If you are receiving or sending money overseas in currencies other than Australian dollars, then PayPal will charge you a currency conversion fee based on their retail exchange rate. At checkout, you have the option to compare PayPal’s currency exchange rate to your card provider’s currency conversion rate. If you’re with American Express, they will convert it for you.

  • To US or Canadian dollars. PayPal’s rate is 3.5% above the exchange rate.
  • To all other currencies. PayPal’s rate is 4% above the exchange rate.
  • Within your PayPal account (not as part of a purchase) to any currency. PayPal’s rate is 2.5% above the exchange rate.

For business merchants accepting and sending money to international receivers, your monthly sales volumes determine the above fees.

  • Up to $2,500 monthly sales (no application required): 3.6% plus a fixed fee
  • $2,500.01-$5,000 monthly sales: 3.2% plus a fixed fee
  • $5,000.01-$15,000 monthly sales: 3.0% plus a fixed fee
  • $15,000.01-$150,000 monthly sales: 2.5% plus a fixed fee
  • Over $150,000 monthly sales (excluding Website Payments Pro – Hosted Solution): 2.1% plus a fixed fee

PayPal business fee examples

Let's look at a fictional example

Typically, we would expect PayPal to charge the following for a commercial currency transfer between Australia and Germany.

Fee summary:

  • A 3.3% cross-border transaction fee for a direct debit from a PayPal account or a bank account linked to PayPal
  • AUD$0.30 fixed fee
  • A currency conversion rate 4% above the exchange rate, assuming you do not frequently conduct large transactions and are using a credit card

Example 1:

Transfer value$100
Cross-border transaction fee+ $5.20
Fixed fee+ $0.30
Currency conversion feeCurrency exchange rate + 4%
Total cost$105.50 + currency exchange costs
Out of pocket$5.50 + currency exchange costs

Example 2:

Transfer value$10,000
Cross-border transaction fee+ $520
Fixed fee+ $0.30
Currency conversion feeCurrency exchange rate + 4%
Total cost$10,520.30 + currency exchange costs
Out of pocket$520.30 + currency exchange costs

How to send money overseas using PayPal

Want to learn how to send money online with PayPal? Luckily, it’s simpler and easier to understand than their fees! You can send money to almost anyone, 24/7, from either the PayPal website or downloading the PayPal App for more on-the-go convenience.

To get started, all you need is a bank account or debit/credit card that is linked (and verified) to your PayPal account. You also need to know the recipient’s email address (or their mobile number) to start sending money. If the recipient doesn’t have a PayPal account, PayPal will send them a link to sign up so they can access the money.

Here are the detailed steps on how it works:

Step 1. Open a PayPal account. It is free to open up any type of PayPal account.

Step 2. Verify your email address.

Step 3. Add your bank account or debit/credit card.

Step 4. To verify your PayPal account, PayPal will transfer a small amount into your bank account.

Step 5. Verify the account.

Step 6. Once verified, upload funds.

Step 7. Click on “Send Payment” once funds are available and enter the recipient’s email address or mobile phone number.

Step 8. The recipient will receive the money into their PayPal account or will receive a link to sign up to PayPal in order to withdraw funds to their bank account.

With their mobile-friendliness and security, you can send money from the comfort of your own home or wherever there is an Internet connection. This certainly beats waiting in line at the bank to send money or being put on hold over the phone for an hour.

However, keep in mind that PayPal’s fees are not very transparent. They do add up if you regularly send large amounts of money overseas and require it to be converted into multiple currencies.

Rest assured, there are other online money transfer services out there (besides PayPal) that offer similar processes with better exchange rates and lower fees.

Summary: Is PayPal great for business?

PayPal is a great choice for transferring small amounts money between family and friends in Australia, or even shopping online. You can keep fees to a minimum if you fund your account via direct debit from your bank account and if both the sender and recipient have a PayPal account.

Now let’s look at it from a business perspective.

For individuals and small to medium enterprises that just want to make a quick payment overseas to a recipient’s PayPal account (and don’t mind paying the fees) then PayPal could be a reasonable option:

  • PayPal integrates well with accounting software XERO, which enables you to send customisable online invoices.
  • If you are an eBay business, you can attract more buyers with PayPal as your preferred payment option.
  • Flexible business loans with PayPal Working Capital can give you funding in minutes.

You can read more about how PayPal is a growing SME lending competitor.

If you have a business that needs to regularly transfer large amounts of money overseas or expects a turnover of millions (and in multiple currencies), you will be better off using a dedicated international money transfer provider.

Unlike PayPal’s varied fee spikes, a dedicated provider will offer better competitive deals on exchange rates and usually charge lower fees.

PayPal alternatives to send money overseas

There are plenty of foreign exchange businesses available online that let you send money overseas in minutes and have lower rates than PayPal.

OFX is currently offering finder.com.au exclusive exchange rates and a $0 transfer fee on all transfers.

Free international money transfer calculator

Need to send money overseas? Make an informed decision before committing. Do your research and compare to ensure you’re getting a fair deal.

Compare your international money transfer options side by side with our free calculator below.

Rates last updated June 21st, 2018
Name Product Min. Transfer Amount Transfer Speed Services Description Online Transfer Fee Rate Amount Received
TorFX International Money Transfers
AUD 200
1 day
Online, Phone, Agent
TorFX guarantee to match any competitor's exchange rate for a transaction. Conditions apply.
Send money overseas in 45 currencies. Once registered, you'll be assigned an Account Manager who can provide support and guidance.

OFX (Ozforex) International Money Transfers
AUD 250
1 day
Online, Phone, Agent
Transfer any amount from $250 upwards. $0 transfer fee on transfers over AU$10,000, $15 flat fee applies otherwise. 24-hour customer service available with a local support team.
WorldFirst International Money Transfers
AUD 2,000
1 day
Online, Phone
Access live rates, currency converter and market updates via the WorldFirst Money Transfer mobile app. No transfer fees for personal or business customers.
FC Exchange International Money Transfers
AUD 3,000
1 day
Online, Phone, Bank Account to Bank Account
FC Exchange will match any competitor's exchange rates. Conditions apply.

No transfer fee when transferring more than £10,000 or equivalent. Send money in over 130 currencies. No maximum transfer amount.
XE International Money Transfers
1 day
Online, Phone, Bank Account to Bank Account
With global payments provider XE, enjoy fast and secure transfers and a range of foreign currency tools and calculators, while benefiting from $0 transfer fees.
ANZ International Money Transfer
1 - 2 days
Online, Phone, Bank Account to Bank Account
Transfer to over 99 countries via online banking, phone banking or through an ANZ Bank branch. Rate last updated on 29/05/2018 at 4:20 pm. Find out how we calculate this exchange rate.
HiFX International Money Transfers
AUD 50
2 days
Online, Phone, Agent
Transfer amounts as low as $50. No maximum transfer amount. No transfer fees if you transfer more than AU$10,000.
Currency Online International Money Transfers
2 days
Online, Phone
Enjoy regular scheduled transfers, one off transfers and a range of currencies. Also enjoy your first transfer for free.
BFX Australia International Money Transfers
AUD 250
2 days
Online, Phone, Agent, Bank Account to Bank Account, International Money Order
Pay $0 fee when you transfer more than $5000, regardless of whether you transfer online, over the phone or in branch.
FlashFX International Money Transfers
AUD 200
1 day
Online, Bank Account to Bank Account
Low minimum transfer amount of just AU$200, with no set-up fees or transfer fees.
The ‘Rate’ and ‘Amount Received’ displayed are indicative rates that have been supplied by each brand or gathered by Finder.

Exchange rates are volatile and change often. As a result, the exchange rate listed on Finder may vary to the actual exchange rate quoted for the brand. Please confirm the actual exchange rate and mention “Finder” before you commit to a brand.

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Save money on your personal or business international money transfer today. Fill in the form and you’ll be contacted by a foreign exchange expert to have an obligation-free discussion about your options. Our foreign exchange experts offer a best rate guarantee, are ASIC authorised and never charge transfer fees.

They can help you with all your needs including:

  • Buying property abroad
  • Emigrating
  • Regular overseas payments
  • Risk management
  • Forecasting

See exchange rate updates in real-time

Refreshing in: 60s | Thu, 21 Jun 08:13pm GMT
1 USD = 1.0000 1.3582 Inverse: 0.7363 1.3330 Inverse: 0.7502 0.8683 Inverse: 1.1517 6.5000 Inverse: 0.1538 0.7630 Inverse: 1.3106 68.1575 Inverse: 0.0147 20.4770 Inverse: 0.0488 53.4955 Inverse: 0.0187
1 AUD = 0.7363 Inverse: 1.3582 1.0000 0.9815 Inverse: 1.0189 0.6393 Inverse: 1.5642 4.7858 Inverse: 0.2090 0.5618 Inverse: 1.7800 50.1830 Inverse: 0.0199 15.0768 Inverse: 0.0663 39.3876 Inverse: 0.0254
1 EUR = 1.1517 Inverse: 0.8683 1.5642 Inverse: 0.6393 1.5352 Inverse: 0.6514 1.0000 7.4859 Inverse: 0.1336 0.8788 Inverse: 1.1380 78.4957 Inverse: 0.0127 23.5830 Inverse: 0.0424 61.6097 Inverse: 0.0162
1 GBP = 1.3106 Inverse: 0.7630 1.7800 Inverse: 0.5618 1.7470 Inverse: 0.5724 1.1380 Inverse: 0.8788 8.5186 Inverse: 0.1174 1.0000 89.3252 Inverse: 0.0112 26.8365 Inverse: 0.0373 70.1096 Inverse: 0.0143

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Tahnee Arlt

Tahnee is a playful West Australian girl who chases adventure and then blogs about it. Skilled in digital marketing - she enjoys spreading fun and informative content through blogging and social media. Her natural talents include getting overly excited 24/7, impersonating Cher in Karaoke and multi-tasking too many hobbies at once.

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