PayPal fees UK: Can you avoid PayPal fees?

PayPal is used by many in the UK, but if you’re sending or receiving money from abroad in currencies other than pounds sterling, then you’ll likely face higher fees.

This guide will look at the PayPal fees you’ll need to consider, to help you decipher exactly how much you’ll have to pay for an international transaction. As well, as introducing an alternative - Wise that may be able to help you avoid PayPal fees. You can also calculate PayPal fees for merchants with this simple PayPal fee calculator.

Avoid PayPal fees

Making international money transfers with PayPal can be a confusing process, especially when you try to decipher the international fees involved. And if your payment involves more than 1 currency or country, PayPal clearly states that you’ll face charges.

The fees for PayPal UK, can be broken down like this:

• PayPal cross border fees.
• PayPal currency conversion fee.
• Paypal commercial payment fee.

If you want to avoid some of the fees that PayPal charges for sending money internationally, then you may want to consider alternatives to PayPal.

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Sending money to or from the UK? Avoid PayPal fees UK with Wise

Avoid PayPal fees with an alternative way to send and receive money from all over the world - Wise.

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How much are PayPal fees UK?

PayPal fees can be confusing, and the fees that you will be charged vary depending on if you are sending or receiving money from family and friends, or buying and selling goods through commercial payments.

At our count, there can be up to 3 different fees for a single international transfer. And while the costs are all shown on Paypal’s website, it can be a bit overwhelming figuring out what your final fee will be.

The costs differ depending on your account, so it’s always best to check PayPal’s fees in detail on their site. However, independent research has found that PayPal may not always be the cheapest option for sending business payments, with a PayPal Business Price Comparison Research.

This article focuses on UK-based PayPal accounts. For more information on the fees applied on US-based PayPal accounts - check out ‘How to avoid US PayPal fees on international payments’.

PayPal cross border fees

Sending money to friends and family

If your PayPal account is registered in the UK, and you send a cross border payment, then you’ll pay 5% of the transaction amount. The minimum fee is £0.99, and the maximum fee is £2.99.¹

For these fees, the fee is paid by the sender of the payment. The payment fee itself depends on both the sender and recipient’s country, and they vary quite a lot.

Receiving commercial payments from outside your registered country

If you are receiving commercial payments from buyers outside your account’s registered country, then the fees will differ. Depending on the sender’s country, the cross border fee will be between 0.5% to 2%.Then, you’ll also need to pay a fixed fee, which will again depend on the currency received.²

So, to summarise:

Send personal payment = 5% transaction fee
Receive commercial payment = 0.5% to 2% cross border fee + Fixed Fee (based on currency received)

PayPal currency conversion

When sending payments in a currency other than GBP, you’ll need to pay a currency conversion fee. PayPal states that this is a fee above the Base Exchange Rate

This fee is what is known as a mark-up on the exchange rate. The fee is dependent on the currency, but ranges from 3% to 4%.

You’ll also face a currency conversion fee when receiving a payment in another currency, or converting money held in your PayPal balances. PayPal takes an extra 2.5% markup above the base exchange rate.² This can hurt.

PayPal Commercial Payment fee

If you are sending or receiving a payment, to buy or sell goods or services - you will also need to pay a fee for each business transaction.

You’ll also need to pay a flat fee of £2.00 for each payment if it’s considered a PayPal business payment.This is paid by the seller, aka the recipient of the payment. A PayPal Business payment is a payment that has made it through a third party or service.¹

PayPal international payments: Can Wise save you money?

PayPal has done an incredible job of connecting people and money from all around the world. But the fact of the matter is still that if you’re someone who regularly sends payments across borders from the UK, their fees can really sting.

This is where Wise can help.

Wise pays out the majority of your transfers locally, in the local currency, cutting out the usual cross-border and international banking fees

Smart new technology connects Wise local bank accounts all across the world. So if you send a transfer to Australia, your money arrives in Australian dollars to your recipient, via a local bank transfer, from our Australian account. Send money to the US, it’ll come from a Wise bank account in the States in US dollars.

You get the picture.

This means your recipient shouldn’t pay any international fees to get their money. Like in these real life business examples comparing Wise and PayPal business transfers.

Wise believes you deserve the same exchange rate that major players on global trading platforms get

A vast majority of big banks and money transfer platforms take a little extra from your international transfer by giving you a different exchange rate than the one you find online.

Some are upfront about it. Some list it out in the fine print. Some list it in a PDF with addendums and sections and legal jargon that’s hard to sort through. Some even conveniently leave it out of the conversation altogether. But, rest assured, it’s most likely there. You’ll just have to look for it.

If you compare the exchange rate you find online to the exchange rate you’re offered by a provider — even taking fees into account — you’ll likely find there’s still a chunk of your cash missing every time.

But just because you don’t have access to hundreds of thousands of dollars you can trade on the global financial market, this doesn’t mean your money should be worth any less than if you were a high street bank or another major player.

Wise believes both you and your money are just as worthy as a big businesses. Which is why we offer the mid-market rate to all our customers.

The mid-market rate is called by all kinds of names — spot rate, interbank rate, wholesale rate. Whatever it’s called, though, it’s a rate that banks and financial players use to trade amongst themselves. And it’s the same rate we offer to our customers. It’s the same exchange rate you’d find when you do a Google search or by using an online currency converter.

We think that’s fairness at its best.

Finally, Wise doesn’t hide your transfer fees behind private sign-ins or tiny print on hard-to-find pages

Life is already complex, so why do costs need to be the same? With Wise, our small, fair transfer fee is spelled out up front. Right from the start. No sign-ups. No sign-ins. No haggling. No obfuscated information behind frustrating paywalls or telephone calls.

Which means there are never any surprises, and no confusion about what you’ll be charged. Unlike many other transfer services and banks, you can check our prices without even having an account with us. We have a dedicated pricing page so you’ll know exactly what to expect.

We’re advocates for transparency, so much so that we’ve started petitions and conversations with governments all over the world in an effort to hold financial institutions accountable on what they charge consumers. We feel it’s time that banks and money transfer services become more transparent about their own exchange rate markups and charges. Don’t you?

If you’re still not sure if PayPal or Wise is the one for you, split your next transfer in two. Send half with Wise and half with PayPal. See what you end up with in the end.

We’re pretty sure you’ll find out yourself how much more you can save with Wise.

Sources used:

1.PayPal: User Agreement: A1.2.2.1, A3.12
2.PayPal: Cross border and Conversion Fees

Sources checked on: 29-January 2020.