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.
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 has 325 million active account holders, trading across more than 200 markets in 25 currencies.
Advantages of using PayPal to send money internationally or pay overseas suppliers
Security. PayPal securely encrypts your financial information and protects customers against email phishing and identity theft.
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 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.
Different account types
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 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.
PayPal business account
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.
How are PayPal's exchange rates?
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.
How much will my business pay to send money with PayPal?
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:
A percentage-based fee for international commercial transactions.
A fixed fee element for commercial transactions (based on the currency received).
Additional percentage-based fee for international commercial transactions
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
Fixed fee for commercial transactions based on currency received
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:
Currency
Fee
Australian dollar (AUD)
0.10 AUD
Brazilian real (BRL)
0.20 BRL
Canadian dollar (CAD)
0.10 CAD
Czech koruna (CZK)
3.00 CZK
Danish krone (DKK)
0.70 DKK
Euro (EUR)
0.10 EUR
Hong Kong dollar (HKD)
0.80 HKD
Hungarian forint (HUF)
30.00 HUF
Israeli New shekel (ILS)
0.40 ILS
Japanese yen (JPY)
12.00 JPY
Malaysian ringgit (MYR)
0.70 MYR
Mexican peso (MXN)
2.00 MXN
Currency
Fee
New Taiwan dollar (TWD)
3.00 TWD
New Zealand dollar (NZD)
0.15 NZD
Norwegian krone (NOK)
1.00 NOK
Philippine peso (PHP)
5.00 PHP
Polish zloty (PLN)
0.50 PLN
Russian ruble (RUB)
3.00 RUB
Singapore dollar (SGD)
0.20 SGD
Swedish krona (SEK)
1.00 SEK
Swiss franc (CHE)
0.10 CHF
Thai baht (THB)
4.00 THB
UK pound sterling (GBP)
0.10 GBP
US dollar (USD)
0.10 USD
Currency
Fee
Australian dollar (AUD)
0.05 AUD
Brazilian real (BRL)
0.10 BRL
Canadian dollar (CAD)
0.05 CAD
Czech koruna (CZK)
1.50 CZK
Danish krone (DKK)
0.35 DKK
Euro (EUR)
0.05 EUR
Hong Kong dollar (HKD)
0.39 HKD
Hungarian forint (HUF)
15.00 HUF
Israeli New shekel (ILS)
0.20 ILS
Japanese yen (JPY)
6.00 JPY
Malaysian ringgit (MYR)
0.20 MYR
Mexican peso (MXN)
0.55 MXN
Currency
Fee
New Taiwan dollar (TWD)
2.00 TWD
New Zealand dollar (NZD)
0.08 NZD
Norwegian krone (NOK)
0.47 NOK
Philippine peso (PHP)
2.50 PHP
Polish zloty (PLN)
0.23 PLN
Russian ruble (RUB)
1.50 RUB
Singapore dollar (SGD)
0.08 SGD
Swedish krona (SEK)
0.50 SEK
Swiss franc (CHE)
0.05 CHF
Thai baht (THB)
1.80 THB
UK pound sterling (GBP)
0.05 GBP
US dollar (USD)
0.05 USD
PayPal business fee – examples
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 fee
Currency 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 fee
Currency exchange rate + 4%
Total cost
$10,520.30 + currency exchange costs
Out of pocket
$520.30 + currency exchange costs
Compare international money transfer providers
Specialist international money transfer services often offer more competitive exchange rates and lower fees when sending or receiving money from overseas, even for businesses. Our table below lets you compare services you can use to send money abroad. Compare fees, exchange rates and discounts from different money transfer services. When you have made your choice, click Go to site.
You can send money to almost anyone, 24/7, from either the PayPal website or by 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.
Creating a PayPal account
Creating a PayPal account can be done for free and with little verification needed. To begin, follow these steps.
Visit PayPal's homepage and click Sign Up.
Next you will be prompted to choose between a Personal Account and a Business Account.
This will be the one used when you need to log in.
This includes the business contact's legal first and last name, the legal business name, phone number and business email address.
Once you have provided all the information you need, simply click on Agree and Create Account.
Sending money through PayPal
Money can be sent both domestically and internationally with PayPal. Different fees may apply depending on who you are transferring to, the purpose of the transfer and what country your recipient lives in. In general, you will need to follow these steps:
Log in to your account and click Send & Request.
Enter your recipient's phone number or email address.
Select the purpose of the transfer – you can choose from Sending to a friend and Paying for an item or a service.
Enter the amount you want to send.
Review and confirm your transfer information and click Send Money Now.
Is PayPal great for business?
PayPal is a great choice for transferring small amounts of 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.
In terms of PayPal 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 for the following reasons:
It 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.
However, 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.
PayPal's fees are not very transparent and can add up if you are regularly sending large amounts or you require it to be converted into multiple currencies. A specialist provider will often offer better competitive deals on exchange rates and usually charge lower fees.
Frequently asked questions
A PayPal business account has all the same features as a personal PayPal account, but it also allows you to send and receive invoices as well as set up subscription services. Additional features such as allowing up to 200 employees limited access to your account also set it apart from individual PayPal accounts.
Yes, it is free to open a PayPal business account.
You can easily change your PayPal account to a business account. Simply head to settings and click Upgrade to a Business account.
Kate Steere is a deputy editor at Finder, specialising in fintech, cryptocurrency and banking. She has previously written for The Motley Fool UK and Fitch Solutions, where she covered a wide range of personal finance topics and kept a close eye on market trends. Kate has a Bachelor of Arts in Modern History from the University of East Anglia. When not working, she can usually be found curled up with a good book or heading out for a run.
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