PayPal Business accounts have no monthly fee, but you pay per transaction
A PayPal Business account itself is free to open and maintain. You do not pay a monthly subscription or account fee. However, PayPal charges you a percentage of every transaction that moves through the account — the amount depends on what kind of payment you are receiving and how the money enters your account.
If you never receive a payment, you never pay a fee. The moment someone sends you money through PayPal, or you use PayPal to send money to someone else, fees apply. Understanding which transactions cost what is the real question.
Key Takeaways
- Opening and maintaining a PayPal Business account costs nothing; you only pay when money actually moves.
- Receiving a payment from a customer via PayPal Checkout or invoice costs 2.99% plus $0.30 per transaction in the United States.
- Sending money to another person or business costs 1% of the amount (capped at $20 per transaction) if you use your PayPal balance or bank account.
- Receiving money from another PayPal user as a personal transfer (not a business payment) is free, but this method is not designed for business income.
- International payments, credit card processing, and invoicing through PayPal all carry different fee structures.
Transaction fees for receiving customer payments
When a customer pays you through PayPal Checkout (the button on your website), PayPal's standard rate in the United States is 2.99% of the transaction amount plus $0.30. This is the most common fee structure for small businesses. On a $100 payment, you would receive $96.71.
If a customer pays you by credit or debit card through PayPal, the fee is the same: 2.99% plus $0.30. If they pay from their PayPal balance or linked bank account, the fee is still 2.99% plus $0.30. PayPal does not discount based on the payment method the customer chooses.
If you send an invoice through PayPal and the customer pays it, the same 2.99% plus $0.30 applies. There is no separate invoicing fee — the transaction fee covers it.
Fees for sending money to other people or businesses
Sending money from your PayPal Business account to another person or business costs 1% of the amount you send, capped at $20 per transaction. This applies when you use your PayPal balance or a linked bank account. On a $50 transfer, you pay $0.50. On a $2,000 transfer, you pay $20 (the cap).
If you send money using a credit card in your PayPal account, the fee is higher: 2.2% plus $0.20. Most business owners use their balance or bank account to avoid this.
Sending money to another PayPal user as a "personal transfer" (not a business payment) is free, but this method is not designed for business transactions and may violate PayPal's terms if you use it repeatedly for business purposes.
International payments and currency conversion
If you receive a payment from outside the United States, PayPal charges the standard transaction fee (2.99% plus $0.30) plus an additional currency conversion fee. The conversion fee varies but typically ranges from 1.5% to 2.5% of the transaction amount, depending on the currency and current exchange rates.
When you send money internationally, the fee structure changes. Sending to a bank account outside the United States costs 1.99% plus a flat fee that varies by country (usually $0.99 to $4.99). Sending to another PayPal account internationally costs 2.5% plus a variable flat fee.
If you regularly receive payments from international customers, these fees add up quickly. Some business owners use alternative services like Wise or Stripe for cross-border payments to reduce costs.
PayPal Here and in-person payments
If you accept payments in person using a PayPal card reader or mobile device, the fee is 2.7% plus $0.10 per transaction in the United States. This is lower than the online rate because PayPal's fraud risk is lower with in-person, card-present transactions.
You do not need to pay for the card reader itself — PayPal provides it free. You only pay the per-transaction fee when a customer actually swipes, taps, or inserts their card.
Hidden costs and what to watch for
PayPal does not charge a monthly fee, but there are other costs that can appear on your account. If you receive a payment and then issue a refund, PayPal refunds the transaction fee to the customer, not to you. You absorb that cost.
Chargebacks and disputes carry a fee. If a customer disputes a transaction and loses the dispute, PayPal charges you $20. If you lose the dispute, you refund the customer plus pay the $20 fee.
Holding or limiting your account (which PayPal does if they suspect fraud or policy violations) does not cost money directly, but it can freeze your access to funds for 180 days. This is not a fee, but it is a real cost to your business.
Some third-party apps that integrate with PayPal charge their own fees on top of PayPal's. For example, if you use a shopping cart plugin or accounting software that connects to PayPal, that software may have its own subscription or per-transaction cost.
Comparing PayPal to other payment processors
Stripe charges 2.9% plus $0.30 for online card payments in the United States — the same as PayPal's standard rate. Square charges 2.6% plus $0.10 for online payments, which is slightly lower. For in-person payments, Square charges 2.6% plus $0.10, compared to PayPal Here's 2.7% plus $0.10.
The difference between these processors is usually small on individual transactions but adds up over time if you process high volume. PayPal's advantage is that it also functions as a digital wallet and peer-to-peer service, so you may already have an account. The disadvantage is that it is not the cheapest option for every type of transaction.
If you receive a lot of international payments, Wise or Remitly may be cheaper than PayPal because their currency conversion fees are lower. If you sell physical goods and need shipping integration, Shopify Payments or Stripe may be more convenient.
Frequently Asked Questions
Can I use a personal PayPal account instead of a Business account to avoid fees?
No. Personal accounts are not designed for business use, and PayPal charges the same transaction fees regardless. If PayPal detects that you are using a personal account for business, they may limit or close it. A Business account is free and gives you access to invoicing, reporting, and customer service tools designed for sellers.
Do I pay fees if someone sends me money as a personal transfer?
No, personal transfers between PayPal users are free. However, PayPal's terms prohibit using personal transfers for business transactions. If you repeatedly receive business payments this way, PayPal may flag your account or require you to convert to a Business account and pay standard transaction fees going forward.
What happens if a customer pays me with a PayPal credit line?
You still pay 2.99% plus $0.30. PayPal does not reduce fees based on how the customer funds their payment. The fee applies the same way whether they use a bank account, card, or PayPal credit.
Can I negotiate lower fees with PayPal?
PayPal does not negotiate rates for individual small businesses. High-volume sellers (typically processing over $500,000 per year) may be offered custom rates, but this requires contacting PayPal's sales team directly. For most small businesses, the published rates are fixed.
Are there any PayPal Business account features I have to pay extra for?
No. Invoicing, reporting, multi-user access, and customer service are all included with a free Business account. You only pay when money moves. Some third-party integrations (like accounting software or shopping cart plugins) may charge their own fees, but PayPal itself does not charge for account features.