Why is PayPal so expensive

PayPal is expensive because it stacks several charges on a single payment, combining transaction fees, cross-border fees and a currency conversion markup.

Each charge can look modest on its own, but together they take a noticeable share of an international payment.

• Transaction fees: Merchants and freelancers receiving commercial or international payments pay roughly 2.9% to 4.4% of the amount, plus a fixed fee per transaction.
• Currency conversion markup: PayPal does not convert at the live mid-market exchange rate. It adds a markup of about 3% to 4% when turning foreign currency into local money.
• Cross-border charges: Payments that move between countries attract additional percentage fees, which build on top of the conversion cost.
• Protection and infrastructure: Part of the pricing pays for PayPal's platform, fraud protection systems and dispute resolution for buyers and sellers.

For freelancers in India receiving USD, the transaction fee and conversion markup together can push the total cost to between 5% and 8% of each invoice. A PayPal overview aimed at Indian exporters lists a commercial transaction fee of 4.4% plus a fixed fee.

Users on Hacker News have pointed out that PayPal's percentage fees are often higher than those charged by Stripe or Wise. When weighing any payment platform, check the transaction fee, the exchange rate used compared with the mid-market rate, and any fixed charge per payment.