How to receive payment on PayPal in Malaysia: Fees explained

With PayPal you can receive payments from family, friends or customers from around the world. Let’s take a look at everything involved with receiving payments with PayPal in Malaysia.

When you receive payment on PayPal, especially if you accept payments in different currencies from someone abroad, you need to watch out for PayPal’s currency conversion fees as well as transfer fees.

Here is an example: your friend in the United States wants to send you $1,000 to your RM account¹

Provider	Transfer fee	Exchange rate	Amount you receive
PayPal	$4.99	Exchange rate with a markup	RM 4,157.70
Wise	$12.51	Mid-market rate	RM 4,309.90

(April 28 2020 )

If your friend uses a money transfer provider like Wise, with its mid-market rate, you may receive more in your RM account than with PayPal, even when PayPal transfer fee looks cheaper than Wise. Plus, the money can be sent directly to your local bank account instead of a PayPal wallet.

And if you have a Wise multi-currency account, you can also receive USD, EUR, GBP and other currencies, just as if you had a local bank account in those countries. So you and your friend can save on transfer fees.

When sending or receiving money from abroad, be sure to always check the exchange rates against the mid-market rate on Google or online currency converter, so that you don’t lose a penny in exchange rates with a mark-up.

Get the real exchange rate, create a free Wise account🚀

Is there a fee to receive money through PayPal?

The answer is yes and no. And the reason is that it comes down to what type of payments you are receiving. Since PayPal offers both personal payments, such as to friends and family, and business or commercial payments, there are different fee structures for each. Also, it depends on whether you receive it from abroad or domestically. Especially if you receive payments in other currencies, you need to watch out for PayPal’s currency exchange rates with a mark-up (more on this later).

1. Receiving personal payments (family and friends)

Say your friend in Malaysia is sending you money into your PayPal account in the same currency as you hold your PayPal balance, for instance Malaysian Ringgit). In this case, you can receive the money for free².

Things get more complicated if you receive money from your friend abroad, however. First, your friend that is sending the money has to pay an international transfer fee. And if your friend is sending in USD, or any other foreign currency, but your paypal balance is in RM, there will be a currency conversion fee.

⚠️PayPal currency conversion fee

Whenever a currency conversion takes place in PayPal’s transactions, there will be a currency conversion fee.

If your friend sends $1,000 to your RM PayPal account, they can either convert to RM first and then send RM to you or they send in USD and you will convert it to RM in your account.

In either case, the currency conversion fee will be deducted from the amount your friend sends. And if you have multiple foreign payments, the fees can add up very quickly.

Let’s take an example of your friend sending $1,000 to your PayPal account in RM.

Amount from your friend in the US	Currency conversion fee for USD to MYR (sender)³	The amount you will receive in your PayPal account
$1,000	3.75% ($37.5)	4,201RM (=$962.5)

Or your friend can send in USD without converting into RM, but then you need to convert it on your own when you withdraw it to your local bank account or transfer it into your PayPal balance in RM.

Amount from your friend in the US	Currency conversion fee for USD to MYR (recipient)⁴	The amount you will withdraw in your PayPal balance or your local bank account in RM
$1,000	2.5% ($25)	4,255RM (=$975)

It’s a bit cheaper if the recipient converts currencies. However, in any case, you need to watch out for PayPal's currency conversion fees especially because they are included within PayPal’s exchange rates and sometimes hard to notice.

As an alternative to PayPal, you may want to consider easier services such as Wise. If your friend uses Wise, the money will be converted with the real exchange rate without any mark-up. And receiving money is easy; it will be sent straight into your local Malaysian bank account. As a recipient, you can relax as you don’t need to pay anything for the transfer.

2. Receiving commercial payments (from customers)

Now, if you are receiving a payment for professional work or items or services sold, there is a laddered fee structure. Here is a table to breakdown the fees for receiving commercial or business payments⁵:

Monthly sales	Receiving payment from Malaysia customers	Receiving payment from International customers
0-RM 12,000	3.9% + RM 2.00	4.4% + $0.30
RM 12,000.01- 40,000	3.4% + RM 2.00	3.9% + $0.30
RM 40,000.01-70,000	3.2% + RM 2.00	3.7% + $0.30
RM 70,0000.01-400,000	2.9% + RM 2.00	3.4% + $0.30
RM 400,000 +	2.7% + RM 2.00	3.2% + $0.30

The .30 USD fee you see would be in the relevant currency equivalent and that conversion may also be subjected to PayPal’s currency conversion fee⁵.

And there are currency conversion fees when you receive commercial payments as well.

Let’s take an example of when your customer in the United States sends a payment in USD and you want to withdraw it into your local bank account in RM.

Amount from a customer in the US	Receiving fees⁵	The amount you will receive in your PayPal account	Currency conversion fee⁴	What you will actually get in your local bank account
$1,000	4.4% + $0.30 ($44.30)	$955.70	2.5% ($23.89)	RM4,067 ($931.81)

So whether you are receiving payments from family or for work, you will be paying not one but multiple fees for just getting the money to your Malaysian account. But PayPal isn’t the only option for receiving money from around the world. You could save money with services such as Wise which always uses the real exchange rate, unlike PayPal.

A cheap and transparent alternative: Wise

Wise only charges one low upfront transaction fee when sending money around the world, including to Malaysia. And the exchange rate a sender gets is the same rate that can be found on Google search or online currency converter. In other words, Wise exchange rates don’t have any mark-up.

So whether family is sending you money into your RM bank account or you are sending them money abroad, with Wise you will always get a low fee and a completely transparent exchange rate. That could save both of you, you as a sender and your family as a recipient, money.

Moreover, with a Wise multi-currency account, you can receive USD, EUR, GBP, AUD, NZD, and Polish Zloty for free, just as if you had a local bank account in those countries. You can also hold and switch between 50+ currencies in one account, with the same real exchange rate and low, transparent fees.

Try the Wise calculator and see how much you could save compared to banks and PayPal.

How to receive payment on PayPal

If your sender is sending you money through PayPal, they can send it to your email address or mobile phone number. If you have a PayPal account, it’ll show up in the wallet. But if not you will be asked to register and open a PayPal account. If you don’t do so, the money will be refunded to the sender⁶.

Now you can either keep the money in your PayPal account and use it further to send money to others who have PayPal or shop online. But if you want it to be deposited in your local bank account, this is how you do it⁷:

1. Head to the Summary page where it shows your PayPal balance
2. Click on “Transfer to your bank”
3. Then choose where you are transferring money from and where you would like to send it to.
4. Input the amount you’d like to transfer
5. Click on “Continue”
6. Review the transfer details and then click on “Transfer”

Overall, PayPal offers one way to send money to family, friends, or businesses globally.

If you’re looking for an alternative to PayPal, Wise can be your option. It is up to 4x cheaper to send money from Malaysia with Wise, instead of the banks. And you have access to 70+ countries, all at the real exchange rate.

Join the 7 million customers who use Wise for their money transfer around the world🌏

Sources used for this article:

1. https://wise.com/my/compare/?sourceCurrency=USD&targetCurrency=MYR&sendAmount=1000 (at 13:25 (GMT+2) April 28, 2020)
2. PayPal Community | Receiving money with a PayPal personal account in Malaysia
3. PayPal USA User Agreement | How we convert currency
4. PayPal Malaysia User Agreement | Fees and Fees table b. Additional Fees: Currency conversion fee
5. PayPal Seller Fees
6. PayPal | how do-i-receive-money-through-paypal
7. PayPal | How do I transfer money to my bank account?