Complete PayPal invoice guide: Set-up, costs, security

Panna Kemenes
6 minute read

PayPal invoicing can be a quick and easy way to issue invoices, and receive payments from customers. However, this service comes at a cost - especially if you work in a global marketplace.

This handy PayPal invoice guide will help you get started and cover the costs involved.


This article will cover

You can also create and send your invoices by using our downloadable free invoice templates or invoice generator.

How does PayPal invoice work?

PayPal invoices allow you to customize your invoice and include full details of the goods or services you’re selling. This service is designed for merchants invoicing their customers and clients - and comes at a fee.

PayPal invoice vs PayPal request Money

PayPal request money is intended for personal use. Splitting a restaurant bill with friends, for example. You can send a text or email request for cash, which can then be paid via PayPal. This service isn’t intended to be used for business purposes.

How to create an invoice on PayPal

To create an invoice using the PayPal business website, you’ll need to take the following steps:

  • Log in to your account
  • Click ‘tools’ which is in the toolbar on the top of the page
  • Select ‘invoicing’ - from here you can choose to create and manage all your invoices
  • To create an invoice, select ‘create invoice’ and enter the email address of the person you’re billing
  • You can then enter all the invoice details, such as the description, the amount, and currency being billed. You can even add a custom logo, use a template, and leave a note for your customer

Each invoice is assigned an invoice number automatically. You can alter this number if you prefer - but it can be a useful way to keep track of which invoices you have sent to which customers.

If you prefer a mobile experience, you can download the PayPal business app and send your PayPal invoices from there. In both cases, templates are preloaded and can be customized however you’d like. You can add your logo, a delivery message, or a thank-you note, for example.¹

How to send an invoice on PayPal

If you’re sending an invoice from the PayPal website, follow the steps above to create your invoice. You can then preview it to make sure it includes all the details you need. After this, simply hit the ‘send’ button.

The PayPal invoice will be delivered directly to your customer, using the email address you’ve already entered.

How to pay an invoice on PayPal

Once you’ve sent the invoice, your customer will receive an e-invoice notification.

When the invoice has been received, your customer can decide how they want to pay it. If they already have a PayPal account, they can select their PayPal balance or a linked bank account.

They can simply click through from the invoice email, to view and pay the invoice within PayPal.²

If they’d rather pay offline, that’s possible too.

Do you have to have a PayPal account to pay an invoice?

Even if your customer doesn’t have a PayPal account, they can pay offline using a credit or debit card. Or a payment service provider such as Wise.

To pay an invoice offline means that you pay the invoice via a means other than PayPal.

If your customer chooses to pay you outside of PayPal, you can still reconcile the invoice within your PayPal business account. This will show it as paid and make sure your accounts stay accurate.

Can you pay a PayPal invoice with a credit card?

Yes, it is possible to pay a PayPal invoice by credit card. Customers won’t need a PayPal account to pay you using credit or debit cards.³

Pay paypal invoice with credit card

How much does PayPal charge for an invoice?

PayPal doesn’t charge fees for setting up and sending invoices, or for canceling them. So, does PayPal charge a fee for invoices? There’s no monthly charge, but if your customer pays online, there’s a fee for each invoice paid:

Payment methodFee⁵
Invoicing3.49% + fixed fee
PayPal Checkout/ PayPal Guest Checkout3.49% + fixed fee
PayPal Guest Checkout – American Express Payments3.50%
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
Additional percentage-based fee for international commercial transactions (excluding American Express Payments)1.50% on top of domestic fee + fixed fee

Anything involving foreign currencies gets expensive. It’s hard to figure out how much you’re paying unless you look at independent research. These can show the real cost of PayPal business international transfers

🔍 Read more about PayPal invoice fees.

PayPal’s international transfer fees and currency conversion

Make sure you understand the costs involved before you choose the invoicing platform that’s right for your business.

If PayPal carries out a currency conversion for you, you can expect to pay fees for the service.

In most cases, the seller can decide whether they or the buyer will pick up the costs involved with the international transfer.

PayPal international transfer fees

International transfer fees depend on where the money’s moving, and how the transfer is funded. These fees are levied if you send or receive money. For example, if you need to withdraw your PayPal balance to an account held in another currency.

With a US PayPal account, international transfers using PayPal balance or a linked bank account will cost you around 1.5% of the total transaction amount. This depends on where the money is going. And that’s not counting the 4% spread that PayPal adds on top of the wholesale exchange rate.

The same international transfer using PayPal but funded by a credit or debit card would cost even more. 2.9% of the transaction amount, plus a small fixed fee depending on the country you’re transferring to.⁵

🔍 You can check out this handy article, which covers PayPal’s international fees - and how you can avoid paying more than you need to.

PayPal currency conversion fees

In addition to the fees set out above, the exchange rate used by PayPal includes a markup added to the wholesale exchange rate.

The wholesale rate - also known as the interbank rate, or the mid-market rate - is the rate that PayPal gets from a third party when they convert currencies. This will apply in any circumstance in which PayPal exchanges currency on your behalf - whether you’re sending money, or invoicing an overseas client.

PayPal takes the wholesale rate and adds a currency spread. This is an extra charge of 4%, depending on what type of transaction you’re carrying out.⁵

You can check if you’re happy with the exchange rate by comparing it to the mid-market rate using a currency converter online. This will help you get an idea of how much extra you’re being charged through the PayPal currency conversion spread.

You can also look at a case study showing what real businesses were charged for PayPal international transactions.

Receiving money internationally through your PayPal business account? Save money with Wise

Banks and money transfer providers often give you a bad exchange rate to make extra profits.

Wise is different. Its smart new technology skips hefty international transfer fees by connecting local bank accounts all around the world.

With the Wise Business account, you can get ten major account details, to receive payments like a local. For example, you can get UK account details, even as a US citizen. This means your customers can pay directly in their own currency. You can then keep, convert, and manage your currencies - all from the same account.

If you use invoicing software, such as QuickBooks, you can add your Wise account details to the invoice to get paid with ease.

The true cost of sending USD to GBP

Is PayPal invoicing safe?

PayPal offers protection to both buyers⁶ and sellers⁷, depending on the circumstances of the transaction. The PayPal dispute resolution center is the first point of call if you have a problem.

PayPal will help to resolve the issue if possible and, if not, may issue a refund. As a seller, it’s important to be aware of some fairly common scams from buyers on platforms such as eBay.

A buyer can open a dispute with PayPal, falsely claiming that an item that they purchased from you never arrived, wasn’t as described, or was damaged upon arrival. The PayPal team has to then decide if the claim is genuine, and whether the buyer or seller was at fault.

The buyer protections are often considered to be stronger. Some PayPal business users claim to have fallen victim to scams. In this case, the seller can have money deducted from their PayPal account to refund the buyer if PayPal believes their story.

There are a few things you can do as a PayPal seller to help avoid this issue. Common sense tactics such as photographing items and packaging, using registered mail, and accurate descriptions when selling online can all help limit the likelihood of there being a problem.

PayPal invoice guide: Conclusion

The PayPal invoice service is quick and convenient, but it’s certainly worth comparing the costs against other options.

Nobody wants to pay more than they have to - and the fees involved in receiving invoice payments through PayPal invoicing can add up quickly.

If you do international business, you may consider using an alternative option - such as Wise Business to receive invoice payments.

Register with Wise Business for free



  1. Create & Send an Online Invoice for Free | PayPal - US
  2. how do-i-pay-for-a-payment-request-or-invoice
  3. when i-send-a-paypal-invoice,-what-payment-methods-can-my-customers-use
  4. Request Payments | Receive Money | PayPal US
  5. Fees | Merchant and Business | PayPal US
  6. PayPal Purchase Protection for Buyers
  7. PayPal User Agreement - PayPal US

All sources checked February 1, 2022.

This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

Wise is the smart, new way to send money abroad.

Find out more

Tips, news and updates for your location