How does PayPal charge fees

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PayPal charges fees based on the type of transaction, how the payment is funded, and whether it crosses borders or involves currency conversion, while opening an account is free.

Creating an account and downloading the app cost nothing. PayPal India supports international payments only, so several domestic fee rules listed on PayPal's global pages do not apply to Indian accounts.

For personal use, the main charges work like this:

Buying: Purchases with no currency change carry no fee.
Friends and family payments: Domestic payments from a balance or local bank are free, while card-funded ones cost 2.9% plus a fixed fee in the US, or the local card rate elsewhere.
International personal transfers: These cost around 5.00% of the amount, within minimum and maximum limits, plus any funding or conversion fees.
Currency conversion: PayPal adds a markup of 3.0% to 4.0% above the base exchange rate.
Bank withdrawals: Standard withdrawals in the local currency without conversion are free.

Sellers and businesses face a separate schedule, set out on the PayPal pricing pages for each country:

Domestic commercial payments: The usual US rate is 2.99% to 3.49% plus a fixed fee.
International commercial payments in India: PayPal charges 4.40% plus a fixed fee that depends on the currency, such as 0.30 USD.
Total export cost: Once conversion markups of 3% to 4% are added, exporters often pay 5% to 8% in all.
Volume discounts: Eligible US merchants processing $3,000 or more a month can get rates of 2.2% to 2.5% plus a fixed fee.
Disputes and chargebacks: A fee applies per dispute, set by currency, for example ₹580.

Three factors drive most of these charges:

Funding source: Paying by debit or credit card adds percentage and fixed fees because card networks charge PayPal, while balance or bank funding costs less or nothing.
Cross-border movement: Sending money between countries adds a percentage surcharge of roughly 1.5% to 5%.
Currency conversion: Changing currencies adds a spread of 3% to 4% on top of the base exchange rate.

Rates vary by country and change over time, so confirm the current figures on PayPal's consumer and business fee pages for your region before sending or receiving money.