PayPal is the most popular digital payment provider in the world. And when it comes to domestic transfers, made between users in the same country, it’s just about as convenient as they come. There are, however, some serious concerns when it comes to an international transfer with PayPal. To learn about these issues and more, read on for our guide to PayPal international payments. We answer the important questions including; Can you actually use PayPal for international transfers? (Hint: not completely) What are PayPal fees for foreign transactions? And, how to use PayPal to receive money from abroad?
Alternative to PayPal for International Payments
Before reading our guide to PayPal international payments, we encourage you to consider the below alternatives to PayPal for international payments. There are a number of international payment options other than PayPal which are not only cheaper but provide a greater variety of payment tools. These can help users achieve better rates, receive money from abroad and better manage currency risk.
Cheaper than PayPal for International Money Transfers:
International Money Transfer Calculator: Compare Fees*
* indicative rates only
PayPal was founded in December 1998 as Confinity, a company that developed security software for handheld devices. In March 2000, Confinity merged with X.com, an online banking company founded by Elon Musk. Musk was the company’s chairman and CEO until October 2000, when he was replaced by Peter Thiel. In 2002, PayPal was acquired by eBay. There are a number of reasons why PayPal has been successful since its inception. First, the company has a strong focus on security and has been able to effectively protect its users’ information. Second, PayPal has been able to provide a convenient and easy-to-use service that has made it a popular choice for online payments. Finally, PayPal has been able to expand its reach by partnering with major companies such as eBay and Amazon… but pricing and currency exchange rates was never that.
Can I Make an International Payment Through PayPal?
In essence, yes. But you can only make a PayPal international payment directly through PayPal when you’re sending money to another PayPal user, in another country. And when you send money to a different territory through PayPal, you can be assured the PayPal international fees are extortionate (more on PayPal fees for foreign transactions when we delve into the PayPal user agreement later).
To send money internationally through PayPal to another bank account, you actually do that through PayPal’s subsidiary Xoom. Founded in 2001, PayPal acquired the traditionally remittance-focused Xoom in 2015. Oddly confidential about Xoom’s standalone performance, PayPal keeps its cards close to its chest as to how successful the remittance company is today. What we do know, is that in fairness, Xoom offers better exchange rates than PayPal. These still hover around the 2% mark, which is not bad for a remittance company, but quite high for bank-to-bank transfers. Wise is certainly cheaper for bank transfers, as are the best international money transfer services.
|PayPal international payment to another PayPal user in another country||PayPal|
|PayPal money transfer abroad to a bank account||Xoom|
|PayPal money transfer abroad for cash collection||Xoom|
Individuals who prefer recognised brands, may like the fact Xoom is owned by PayPal. Users can also use their existing PayPal login details which is pretty convenient. Though, in our opinion, the exchange rates are still too high so we recommend using, or at least comparing Xoom, with other remittance companies. We cover the firm extensively in our detailed Xoom Review.
PayPal Currency Exchange Fees
Here is a breakdown of the fees, whether you send money international to a PayPal account or a bank account via Xoom as explained above.
|Transaction Fee||Additional Charges|
|Transferring to another PayPal Account||5% of the amount transferred||2.9% for debit card + conversion fees starting from 3%|
|Transferring directly to a bank account via Xoom||~2% on average (more information on Xoom money transfer fees)||Added fees for debit card|
If you are transferring money internationally to another PayPal account you are going to pay an insanely high fees!
How to Make a PayPal Money Transfer International
Once registered, using PayPal for international transfers to other PayPal members is rather simple. In fact, the slick technology and convenience are two major advantages to using the firm, it’s just the eye watering fees which put us off,
Follow these steps to make a PayPal money transfer international:
- Login to PayPal on app or through paypal.com
- Click the ‘Send’ button on the homepage
- Select a saved user or type in the username/email/mobile of the user you wish to make a PayPal international payment
- Choose the currency you want the beneficiary to receive
- Check the currency conversion rate and PayPal international transaction fees, if happy, proceed by clicking next
- Select how you want to fund your PayPal international payment
- Have one last check the details are all correct, then click ‘Send Money Now’
- Your transfer should be processed near instantly
Can you Receive International Payments on PayPal?
Similar to the above, as long as the individual sending you money has a PayPal account, yes you can use PayPal to receive money from abroad.
PayPal provides users with a digital wallet where they can hold up to 22 different currencies online. Note these are strictly for PayPal international payments, designed for sending and receiving money from other PayPal users. They do not come with a designated account number that can be used for external payments outside of PayPal.
To access true multi-currency accounts that come with their own unique set of account details, and can be used to both make and receive external payments, see our multi-currency account guide. As an example, a GBP account with one of these providers comes with a UK sort code and account number and USD account has a US routing number and account number.
Can I Receive International Payments Through PayPal Personal Account?
Yes, providing the individual sending you the money also has a PayPal account. Receiving funds domestically is free and very convenient. Receiving money internationally and you can expect hefy PayPal international fees.
Note, do not use the ‘request funds’ option if you are receiving money for personal reasons. As soon as the ‘request funds’ option is selected, PayPal treats the transfer as a commercial transaction. Receiving a commercial transaction incurs a 2.9% + fixed fee as standard, plus an additional 1.99% for payments received from other ‘PayPal Markets/Regions’.
PayPal’s International Payment Fees
There are various PayPal international fees to be aware of whether you’re sending or receiving money through PayPal.
Understanding PayPal Markets/Regions is the first step to understanding what the PayPal fees for receiving money and sending money are. PayPal has different user agreements for different territories and it’s these territories where it defines a local PayPal payment vs a PayPal international payment.
As an example, the UK is grouped with Guernsey, Jersey, Gibraltar and the Isle of Man. The EEA forms another PayPal region, and there various other PayPal regions around the world. Payments made within a PayPal region are treated as domestic and payments made from one PayPal region to another, are treated as international, i.e. PayPal US to PayPal UK.
Generally, sending money domestically, in the same currency, incurs no fee.
PayPal’s International Fees: Breakdown
As with any international transfer, there are two aspects to consider. Firstly, there are the PayPal international payments fees to consider and then, secondly, there is the exchange rate spread applied to the currency conversion.
PayPal international payment fees for private users range from a minimum fee of GBP0.99 to a maximum payment fee of GBP2.99. They are calculated as 5% of the transaction amount, so realistically if you’re sending more than GBP60 you can expect to pay the maximum amount. In some ways these fees can be considered quite reasonable but when you understand the funds are simply moving between PayPal’s own ledger (i.e. no external banks or payment processors are involved) one has to wonder if any fee needs to be charged at all.
When making a PayPal international payment from one currency to another, users can use the currency calculator to check the current conversion cost. On the PayPal platform, simply:
- Go to Wallet.
- Below the ‘Balance’ summary , click the currency calculator.
PayPal’s current exchange rate is shown below the currency selections. Expect an exchange rate spread of 3%+, far higher than other online money transfer websites.
PayPal Fees for Receiving Money International
If a private user receives a personal transfer, where no currency conversion is involved, there is no PayPal fee for receiving money.Looking at the UK user agreement for commercial accounts, there are various fees to be aware of. The following ‘domestic fees’ apply depending on how the payment is sent to you (and in addition to these, there are Paypal fees for receiving money internationally).
Source: https://www.paypal.com/uk/webapps/mpp/merchant-fees#domestic, true for on Feb 22, 2022:
What it costs to receive domestic currency transfers with PayPal
|Alternative Payment Method (APM)||APM Transaction Rates Apply|
|Card funded payment from a user of our Terms for Payments without a PayPal account||1.2% + fixed fee|
|QR Code Transactions – GBP10.01 and above||1.5% + fixed fee|
|QR code Transactions – GBP10.00 and below||2% + fixed fee|
|All Other Commercial Transactions||2.9% + fixed fee|
In addition depending on where sender is from, he will pay 1.29% to 1.99% in fees. These fees apply even for receiving money in the same currency.
The majority of payments, such as receiving money from another PayPal user online, are treated as ‘other commercial transactions’. So a fee of 2.9% + a fixed fee (depending on the currency involved) applies. In addition to a 1.29% fee when receiving money from the EEA and 1.99% from other PayPal markets. Crucially, users then normally have to convert the funds received to their domestic currency at the PayPal exchange rate (3% above the interbank rate). In total, this takes overall PayPal fees for receiving money internationally to just under 8%. Truly staggering. Use a multi-currency account from our recommended providers and there are none. What’s more, many of these multi-currency accounts can be opened local to the international markets you operate, minimising the chance of intermediary and beneficiary banks taking a charge as they process the payment.
The biggest criticism about PayPal is that it can be difficult to get help from customer service when you need it. There have also been reports of people having their accounts frozen or being unable to withdraw money, which can be frustrating. PayPal “boasts” 23,000 reviews on TrustPilot with an average rating of 1.3 stars out of 5.
Final Word: Making an International Payment Through PayPal
Providing you’re sending money to another user, it’s easy to use PayPal for international transfers. PayPal’s slick technology allows users to send a PayPal money transfer internationally in a matter of clicks, simply by typing the email address or mobile number linked to the beneficiary’s PayPal account. The clear drawback is the PayPal international payment fees involved with a PayPal international money transfer. Whether you want to use PayPal to receive money from abroad or send money with PayPal internationally, there are fees to catch you out on both ends of the process. Nowadays, there are a plethora of credible alternatives to PayPal for international payments that offer the same slick tech, combined with lower costs. We encourage readers to compare PayPal with our top rated money transfer companies.