PayPal Currency Conversion Fees – how to save money!

PayPal Currency Conversion Fees - how to save money!
  • Currency exchange
  • eCommerce

PayPal is a convenient payment platform that allows private individuals and businesses to instantly send and receive money all over the world in different currencies. However, these advantages come at a very steep price. Businesses have to pay PayPal transaction fees of up to 5% of the original amount as well as a PayPal currency conversion fee. Therefore, we are looking at viable alternatives to send and receive different currencies.

PayPal business transaction fees

According to PayPal, a “commercial transaction” includes buying or selling goods or services or to make any other commercial type of transaction. The costs for domestic commercial transactions range from 1.90% up to 3.49%, plus a fixed fee based on the currency received, for example 0.39 EUR for Euro or 0.49 USD for a US-Dollar PayPal Checkout (January 23, 2023).

Payment TypeRate
Alternative Payment Method (APM)APM Transaction Rates Apply
Invoicing3.49% + fixed fee
PayPal Checkout3.49% + fixed fee
PayPal Guest Checkout3.49% + fixed fee
QR code Transactions – 10.01 USD and above1.90% + fixed fee
QR code Transactions – 10.00 USD and below2.40% + fixed fee
QR code Transactions through third party integrator2.29% + 0.09 USD
Pay with Venmo3.49% + fixed fee
Send/Receive Money for Goods and Services2.99%
Standard Credit and Debit Card Payments2.99% + fixed fee
All Other Commercial Transactions3.49% + fixed fee

If you conduct international transactions, you need to pay the domestic fees above plus a fixed rate of 1.50%. As a result, international PayPal business transaction fees can add up to 4,99% (3,49% + 1,50%). In this calculation, the PayPal currency conversion fee is not included, yet.

PayPal currency conversion fee

On top of the PayPal business transaction fees, you may also be charged a PayPal currency conversion fee. The PayPal currency conversion spread amounts to 3-4%.

To sum up: When you conduct international transactions with PayPal, you are charged threefold:

  • Domestic PayPal business transaction fees: Up to 3,49% + fixed fee (based on currency received)
  • International transaction fees: Domestic PayPal business transaction fees + 1.50%
  • PayPal currency conversion fee: Currency conversion spread of 3-4%

These charges are very expensive, especially if you regularly send or receive different currencies. Luckily, there are easy ways to avoid at least some of the fees charged by PayPal.

How to avoid PayPal business transaction fees

If you don’t need instant transactions, the most common way for international transactions is to use the SWIFT network with your bank account.

However, depending on the location of the sending and receiving bank, your money might go through multiple intermediary institutions until it reaches its final destination, adding up further transaction costs. SWIFT fees range on average from 3-5% of the transferred amount and are charged either both parties (sender and beneficiary) or just one party, depending on the type of SWIFT transaction (BEN, OUR or SHA). Further, SWIFT transactions are not instant, but may take several days, bank holidays not included.

In contrast, local payment schemes, such as the European SEPA or the American ACH are by far the cheapest alternatives to PayPal or SWIFT payments. The problem: In most cases, you need local bank accounts to access these payment schemes. In the next sections, we are going to explain how you can profit from these local payment schemes, even if you don’t have a local bank account.

How to avoid PayPal currency conversion fee

Besides reducing expensive PayPal business transaction fees, it is also possible to avoid the PayPal currency conversion fee by either using multi-currency IBANs or making use of virtual local accounts.

If you conduct international money transfers in multiple currencies, multi-currency IBANs are a great way to save currency conversion fees. Digital financial platforms enable you to create a multi-currency IBAN on your own name, which allows you to send and receive payments in different currencies via the SWIFT network – all in one place with one single IBAN. To compare: Traditional banks usually only allow you to open a foreign currency account for only one currency, so you need to manage several accounts if you have more than one currency.

Virtual local accounts, on the other hand, allow you to hold foreign currencies and enable you to profit from local payment schemes. For instance, a local US account would enable you to use the ACH network instead of SWIFT to receive and send payments, which reduces both business transaction and currency conversion fees.

Save business transaction and currency conversion fees with amnis

amnis is a digital payment platform that enables you to easily set up multi-currency IBANs and local accounts to profit from local payment schemes.

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With amnis you can set up a multi-currency account to pay and receive money in over 20 currencies via the SWIFT network. The options include commonly-used currencies such as EUR, USD, GBP, CNY, and JPY.

On top of that, virtual local accounts at amnis allow you to send and receive money like a local. Local accounts are available for the Euro-zone, United States, Great Britain, Canada and Switzerland. This allows you to reduce business transaction fees and completely cut out PayPal currency conversion fee. Instead, you may only pay a small amount per transaction, which is a fraction of the costs incurred at PayPal.

New: amnis recently added local CH-IBANs in the client’s name to all accounts. These CH-IBANs can also be integrated with PayPal and allows users to receive Swiss Francs seamlessly into their amnis account – at the lowest possible cost!

At last, amnis offers transparent flat rates (between 0.2% and 0.4%), which are completely independent of your FX volume. You know exactly what you pay without the need to scroll through long pricing lists.

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Sabrina Maly
As a marketing manager at amnis I provide SMEs with fx market, international business and news updates on our blog & FAQ page.
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