Many individuals are still apprehensive about PayPal and the costs that may be paid while using it, despite the fact that it has long been used as a simple method to pay for products and services online.
PayPal is a secure online payment service that allows you to pay for products using your PayPal account. Simply input your bank account, credit and/or debit card information, and then choose which account to use as your chosen payment option. You can then also choose one of them as your default payment method, which will be used until you change your mind or need to use another account.
You may also send and receive money using PayPal. Any payment you get is transferred into your PayPal account, which you may use to make purchases or give to family or friends, with the balance restored using your specified cards or bank account.
Many online shoppers continue to steer clear of the service, though, as they believe there are hidden fees associated with using it. Plus, thanks to the likes of Apple Pay and Google Pay, online payments are just as easy to use now anyway. But are they right to be sceptical of PayPal?
Does PayPal Have Any Fees?
While buying things online or sending money to friends and family is absolutely free, there are certain fees that you or the receiver may be charged in specific circumstances.
If you’re just using the service to pay for goods and services online, there are absolutely no fees to worry about. Any fees in this type of transaction are paid by the seller.
Likewise, if you’re just sending money to family or friends, you will not be charged a fee. This makes for an easy way of gifting money to people on their birthday or reimbursing a friend that bought the round of drinks.
There are however a number of fees associated with using some of PayPal’s additional services.
Receiving Money For Goods Or Services
When receiving money from selling goods online or if you accept PayPal as a payment method for your services, there will be a fee related to doing so. This fee will be 2.9% and a fixed fee of 0.30 USD for domestic online transactions or an additional 1.5% fee on top of this for international payments.
Withdrawing Money To Another Account
If you need to withdraw your PayPal balance back to your bank account, it’s free as long as it is your linked bank account. However, if you want to instantly withdraw to another bank account, the fee will be 1% of the total amount transferred. This fee applies to both debit and credit cards.
Converting Your Funds To Another Currency
Forecasting currency exchange costs is tricky. The currency rate used in the transaction is one thing, but the conversion fee is another. Depending on the currencies involved, it might vary from 3 to 4%.
Credit Card Processing
There are a few different fees associated with credit card payment processing. These costs may fluctuate (and do so often), but they will never deviate much. PayPal’s fees are always transparent, so as long as you pay attention when transacting, you’ll know precisely how much you’ll be charged.
Credit card processing fees are as follows:
- PayPal Here (point-of-sale/card reader) charges 2.7 percent.
- A 1.5% fee is added to international PayPal Here transactions.
- For online credit or debit card purchases, there is a 2.9% fee plus a 0.30 USD fixed fee.
- International online credit card transactions are subject to an extra 1.5% surcharge.
- Payments made with American Express include a 3.5 percent fee. Whether you’re paying using an overseas American Express card or a domestic American Express card, the cost remains the same.
Alternative Payment Services
If you’re still not convinced by PayPal, there are some similar alternatives available that, like PayPal, can make your online payment processes a lot simpler than having to input your card details every time you want to pay for something.
Let’s take a look at the current top favourites:
1. Google Pay
Google Pay may be used for in-app purchases as well as transactions at physical stores. Third-party vendors may also include the feature in their online stores. Payment is made with a single click using an app. Credit card information is held and handled securely, with no payment information being transferred to the retailer.
Google Pay has excellent security requirements and may be used independently of Google if that thought bothers you, although it isn’t as widely accepted as PayPal (yet).
2. Apple Pay
If you’re an iPhone user, your alternative to PayPal could be Apple Pay.
The payment service first and primarily functions as an NFC-based wallet for the iPhone, enabling Apple Pay to make contactless purchases at checkout. In-app purchases from a number of well-known businesses are also available.
Apple Pay provides excellent security and is useful for both online and in-store transactions, but it is only accessible to Apple fans and is not yet generally available outside of the United States.
Payoneer, a money transfer and payment startup founded in 2005 by Israeli entrepreneur Yuval Tal, is particularly well suited to small and medium-sized businesses as well as freelancers. Payoneer is accessible in over 200 countries as a licenced Mastercard Member Service Provider (MSP).
Users may choose to send money to a bank account or to a reloadable prepaid debit card, which can then be used to make purchases. This is also an appealing choice for cross-border wire transfers because of the low currency translation expenses.
Masterpass was originally exclusively offered to Mastercard users as a PayPal alternative, but it is now open to all credit card holders. Masterpass accepts almost any credit or debit card in addition to Mastercard.
Masterpass, like PayPal, is referred to be a digital wallet solution. You must first register a personal account and fill out the payment and personal information. You can simply and quickly discover them in your Masterpass account if you wish to pay online. This eliminates the need to input your address and payment details for each online store separately.