How much does PayPal charge for international transactions, see the following reviews

In an era of unprecedented globalization, the world economy is more connected than ever. Advances in technology have made it easier for businesses, large and small, to connect with international clients, customers and partners.

One of the most important developments is the creation and adoption of money transfer services such as PayPal. Unlike traditional bank transfers, PayPal offers a relatively inexpensive, fast, and easy solution for businesses to make international payments to partners outside the United States.

Can PayPal be used for international transactions?

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

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

Both options offer relatively fast payments and Xoom easily connects with your PayPal to make tracking payments easier.

What Fees Does PayPal Charge?

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 flat fee (based on the currency used) also applies.

In addition, if the sender needs to convert to another currency before sending, the currency conversion fee is 3-3.75%. See the table below to better understand how these fees are applied.

On the other hand, to transfer directly to the recipient's bank account, you will need to send the payment via Xoom. Since Xoom is owned by PayPal the two work seamlessly together and transfers can be funded from a PayPal account or a linked bank account.

Unlike a fixed percentage fee for transferring to other PayPal users, Xoom adds a mark up to the current market price.

For example, if the currency exchange rate from EUR to USD is 0.913, Xoom may offer to process transfers with a rate slightly lower than 0.902. This means the recipient will receive less than the market exchange rate and the sender will have to factor that in their payments. For country-specific rates, there is an exchange rate calculator on the Xoom website.

How Do I Avoid PayPal Fees?

PayPal is free only for personal payments made to friends and family in 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.

Depending on the size and frequency of international transfers, fees start to add up. While there is no way to avoid PayPal transaction fees altogether, there are ways to reduce costs:

Fund transactions using your PayPal account.

This is the easiest way to reduce the various fees charged by PayPal. Transferring funds with a Paypal account avoids additional fees charged when using credit cards and debit cards.

For a one-time situation, this may not have a big impact, but over time the costs add up.

Make bigger payments.

When transferring money directly to another PayPal account, the fee is capped at $ 4.99. That is, a $ 100 shipping fee is the same as sending $ 1,000 dollars and so on.

Making fewer payments in a larger amount keeps costs relatively low. Xoom, on the other hand, is not limited in this way.

Take PayPal fees into account.

When working with international partners, payment fees must be factored into the pricing of services, especially if transactions are large and / or frequent.

It's important to work out the details first. Payment frequency, transaction amount, and exchange rate must all be factored into the service fee. That way, no surprises will come.

Deduct costs at tax time.

PayPal and other payment processing fees are considered expenses necessary to conduct business and are deductible from your taxable income at the end of the year. While this does not necessarily reduce the cost of using PayPal, some of the losses can be offset in the form of tax savings.