How much does PayPal Business charge for international payments?

PayPal Business has become a go-to solution for companies that need to send or receive payments online. But when it comes to moving money across borders, the platform’s convenience often comes with added costs. Understanding PayPal international transfer charges is important for any business that wants to manage fees and protect margins.

In this guide, we’ll break down what PayPal charges for international payments, look at the different types of fees, explore real examples, and compare these with other solutions, including Airwallex.

Types of PayPal accounts and how they impact fees

Before diving into the fees, it's worth understanding the three main types of PayPal accounts and how they differ:

1. Personal PayPal accounts are designed for individuals who want to shop online, send or receive money from friends and family, or buy and sell casually (e.g., on marketplaces). These accounts are limited in terms of business functionality and often come with different protections and fee structures.

2. PayPal Cash and Cash Plus accounts allow individuals to store money within PayPal, similar to a digital wallet. These accounts offer access to features like direct deposit, bill payment, and debit cards. However, they’re still designed for personal use and not suitable for high-volume commercial transactions.

3. PayPal Business accounts are tailored to merchants, freelancers, and companies. They offer invoicing tools, payment gateways, custom checkouts, and multi-user access. Importantly, they are also subject to the full scope of PayPal’s commercial transaction fees, including higher charges for international payments. This is the default account type PayPal will recommend for a business—and the one most exposed to PayPal's fee structure.

4. Choosing the right account type affects which fees apply, how tax applies, what reporting is received, and how customers interact with the business. For anything beyond casual use, a Business account is often necessary, but it comes with steeper costs—especially for cross-border payments.

Understanding PayPal international transfer charges

When international payments are made or received through PayPal Business, there are typically several types of fees that apply. These include:

1. Transaction fees: These are the standard fees applied when money is received through PayPal, especially from international sources. For business accounts, PayPal typically charges a percentage of the payment amount plus a fixed fee, depending on the currency.

2. Currency conversion fees: When a payment is made in a foreign currency, PayPal applies a conversion rate that includes a margin (usually 3–4%). This spread is where a significant portion of the cost lies when receiving or sending money internationally.

3. Withdrawal or funding fees: Depending on the method used to add funds to a PayPal account or withdraw money to a connected bank account, different fees may apply. Transactions funded by credit cards, for instance, typically incur higher charges than those funded by an existing PayPal balance or a linked bank account.

4. Cross-border fees: These fees are applied when a payment involves different countries. PayPal classifies these transactions separately and applies an additional fee on top of the transaction and conversion costs.

5. Additional service charges: This can include chargeback fees, refund processing fees (where the fixed portion of the original fee is not returned), or even internal currency balance transfers within an account. These small charges can add up over time.

6. While these might seem minor individually, they can quickly add up, especially for businesses processing large volumes of global transactions. Each fee tier is designed to monetise a specific part of the payment lifecycle. The more currencies and countries a business deals with, the more fees it will likely encounter.

Let’s explore each fee type in more detail.

PayPal fees for receiving money internationally

This is a common area of concern for many businesses. When an overseas client or customer initiates a payment, PayPal deducts:

• A standard commercial transaction fee: 4.4% of the total amount

• A fixed fee based on the currency received (e.g. AUD $0.30 per transaction)

This fee structure typically applies to freelance professionals invoicing international clients as well as online businesses with cross-border sales.

For instance, a payment of $2,000 AUD from a UK client would result in:

4.4% fee = $88

Fixed fee = $0.30

Total PayPal fee = $88.30 AUD

In this example, $88.30 is deducted before the funds are available. When applied to multiple transactions each month, these deductions can compound quickly—gradually eroding profit margins and affecting cash flow.

Currency conversion and PayPal international charges

If the incoming payment is in a foreign currency, PayPal applies a markup to its exchange rate. This is known as the currency conversion spread, and for business accounts, it typically ranges from 3% to 4%.

PayPal doesn’t use mid-market or interbank exchange rates. Instead, it builds its margin into the rate, meaning businesses are getting less value for every converted dollar.

Example:

Client sends $10,000 USD

PayPal applies a 3.5% currency conversion rate

$350 AUD is lost on the exchange alone

Add that to the transaction fee and there is a potential loss of 7–8% per payment. And because exchange rates fluctuate daily, it’s hard to predict exactly how much will be lost on any given transaction.

How international payments are received in PayPal Business

By default, international payments received in a PayPal Business account remain in their original currency. These funds won’t be converted to the account’s domestic currency until the conversion is triggered manually or account settings are updated.

To manually convert a foreign currency payment, log in to the account, go to the Activity tab, locate the incoming transaction, and follow the prompts to accept and convert the funds. Alternatively, settings can be adjusted to allow automatic currency conversion at the time of receipt.

PayPal applies its standard currency conversion rate, which includes a margin when these conversions take place. This often leads to additional costs, particularly for businesses that regularly deal with multiple currencies.

PayPal International transfer fees for sending money abroad

Businesses that pay international suppliers or contractors through PayPal face additional charges:

• The International transfer fee from PayPal: Ranges from 0.5% to 2% based on location and payment method

• Cross-border fee: Often 1% to 2% of the total transfer

In addition to this, PayPal applies higher charges when credit or debit cards are used to fund transactions. Although the percentages may appear minimal, they can have a considerable impact on high-volume international payouts or ongoing supplier payments.

Hidden PayPal transaction charges to watch out for

Some fees tend to fly under the radar and might only come to light after a closer look at transaction statements. These include:

• Chargeback fees: $20–30 AUD per dispute

• Refund processing: PayPal keeps the fixed portion of the original fee

• Currency balance transfers: Transferring funds between currencies in your PayPal account still incurs a conversion fee

• Account funding: Some top-up methods, like using credit cards, can also incur fees

Even if your volume is modest, these charges can chip away at your revenue month after month.

Comparing PayPal international charges by country

PayPal’s international transaction fees vary by country and currency. Here’s a quick look at how these fees can differ:

These can fluctuate depending on whether the payment is funded from a balance, linked bank account, or card. Always check PayPal’s fee table for the latest.

How Airwallex compares to PayPal’s transaction charges

Unlike PayPal, Airwallex offers:

• No fees for receiving international payments

• Competitive FX and Transfers, helping businesses save up to 80% on FX fees

• Access to Global Accounts to hold money in 60+ countries, with local account details

• Batch Payments and multi-user approval workflows

This makes Airwallex ideal for businesses sending or receiving frequent international transfers.

PayPal vs Airwallex in action

A side-by-side comparison can help show just how much difference international payment fees make. Below is an example of what monthly cross-border transactions might cost through PayPal compared to Airwallex.

Scenario: A business receives $50,000 USD per month from overseas clients.

PayPal

4.4% transaction fee = $2,200

3.5% currency conversion = $1,750

Total monthly cost = $3,950 AUD

Airwallex

No receiving fee

FX margin at 0.3% = $150 AUD

Total monthly cost = $150 AUD

Annual saving = Over $45,000 AUD by switching

Top alternatives to PayPal for international business payments

PayPal isn’t the only option. Let’s look at some other platforms businesses use for cross-border payments:

Airwallex: Purpose-built for global business with transparent fees, low FX margins, and strong B2B tools.

Wise: Low-cost international transfers for small businesses and individuals.

OFX: Suited to larger transactions, offering competitive FX rates.

Stripe: Focused on eCommerce and integrated checkout experiences.

What sets Airwallex apart is its focus on end-to-end payment processing, from invoicing and collections to international transfers—all in one platform.

Save on international payments with Airwallex

Interested in finding a more affordable way to send and receive international business payments? Check out Airwallex. 

Airwallex allows you to send money directly using our international transfers or Global Accounts. However, if you prefer to continue using PayPal, you can also connect your PayPal Business account to your Airwallex Global Account to save on international transfer fees.

Either way, Airwallex offers FX fees as low as 0.5% to 1% above interbank rates and no fixed fee when withdrawing funds using a local payout.

PayPal international charges: Frequently asked questions

Does PayPal charge international transfer fees?

Yes, PayPal applies international transfer fees when payments cross borders. These include a standard international transaction fee, a currency conversion margin, and sometimes a cross-border surcharge. These fees can significantly increase the total cost of sending or receiving funds internationally.

What is the PayPal international transaction fee?

The PayPal international transaction fee is typically 4.4% of the transaction value, plus a fixed fee based on the currency. If currency conversion is required, an additional 3–4% margin is added to the exchange rate. This rate may change so please check PayPal for up-to-date information. 

What are the PayPal fees for international payments?

Receiving international payments with PayPal usually incurs a 4.4% fee plus a fixed fee depending on the currency received. In most cases, an added currency conversion fee is also applied if the funds require conversion.

Are PayPal fees higher for business accounts?

Business accounts often incur slightly higher PayPal fees, especially for international transactions. These accounts are subject to full commercial transaction rates, making them more costly than personal accounts when receiving cross-border payments.

How does PayPal compare with Airwallex for international transfers?

Airwallex generally offers lower fees for international transfers compared to PayPal. With no receiving fees, access to interbank exchange rates, and transparent FX margins, Airwallex helps businesses reduce costs on global transactions.

Is a transfer the same as a payment with PayPal?

Not always. A payment typically refers to a purchase or service exchange, while a transfer involves moving funds between accounts. Both can incur PayPal international transfer charges, especially if currencies or countries differ.

Can PayPal currency conversion fees be avoided?

Currency conversion fees are only avoided if the sender pays in the recipient’s primary account currency. Otherwise, PayPal applies its own exchange rate, which includes a margin over the mid-market rate.

Sources

https://www.paypal.com/au/business

https://www.paypal.com/au/business/paypal-business-fees

The information in this article is based on our own online research. Airwallex was not able to manually test each tool or provider. The information is provided for educational purposes only and a reader should consider the specific requirements of their business when evaluating providers. This research is reviewed annually. If you would like to request an update, feel free to contact us at [[email protected]]. This information doesn’t take into account your objectives, financial situation, or needs. If you are a customer of Airwallex Pty Ltd (AFSL No. 487221) read the Product Disclosure Statement (PDS) for the Direct Services available here.