How does PayPal decide about the exchange rate

Paypal fees under the microscope

PayPal is often recommended for transfers of all kinds. But they are Paypal fees really so cheap and which ones costs arise at International transfer?

I took a closer look at the complex PayPal fee schedule and analyzed how it really is with PayPal fees.

How does PayPal work?

The Ebay subsidiary PayPal takes over the transaction of small and medium-sized amounts from the buyer to the seller when shopping online, without passing on sensitive account details to the online shop. The name PayPal also stands for the online payment system itself.

In order to be able to pay or receive money online or mobile, customers deposit their bank details or credit card numbers once when registering. For the individual payment processes, it is only necessary to enter the email address and an individual password in a few steps.

An account with PayPal is a virtual account and enables both the receipt and the sending of funds. The PayPal account can be thought of as a kind of store for electronic funds. If you have acquired electronic "money" - for example by paying in by credit card - this can be sent to any e-mail address. If you as a buyer transfer money to a seller via PayPal, this will be credited to the seller within seconds - a big advantage compared to the classic transfer.

A recipient who is not yet a customer can only access his money after opening an account. The transaction is displayed in the account overview, but there is no listing of the fees charged in the specific case. PayPal bills this for the quick and convenient transfer. The fees are falling without sales tax at.

A very special service is available to German PayPal members - the PayPal app can be used to send messages to friends and acquaintances free of charge.

Overview of costs and PayPal fees

PayPal customers do not pay a monthly fee, costs however, arise, among other things, when receiving payments.

In order to find your way around the somewhat complex fee jungle, it is advisable to first classify the payments in

  • personal / private or business payments on the one hand
  • and domestic or cross-border transfers (International transfers)

on the other hand.

Personal or private payments

If a personal domestic payment is made, there is a variable fee of 1.9% plus a fixed fee if the payment is fully or partially financed by credit card. If, on the other hand, personal domestic payments are made entirely using a bank account or credit, this is free of charge, provided that no currency conversion is required.

Business Payments

When sending business payments, PayPal only requests a Currency conversion a fee. If a domestic business payment is received, a variable fee of 1.9% and a fixed fee beating.

Upon separate request, PayPal grants individual merchant preferential conditions if all the required requirements are met. The variable fee can be reduced to 1.7 - 1.5%.

The fees for receiving cross-border personal and business payments are discussed explicitly below.

Other PayPal fees:

Exchange rate fee
Chargeback Charges
Business Payment Reversal Fee
Charge for sending batch payments
Document fee
Fees for failed charges
Fees for failed debits / return debits
Fees for micro payments (micro pricing and fixed fee)

PayPal fees for donations

If, for example, donations are collected using the PayPal donation buttons, a fee of 1.2% of the donation amount plus 35 cents will be charged when the money is received.

PayPal fees for international transfers

With PayPal, even payments abroad can easily be made online without having to fill out a bank transfer. In general, the PayPal fees for a foreign transfer can vary widely and affect the recipient of the payment. As already mentioned, the amount of the costs also in this area depends on who makes a payment and for what reason. However, it also depends on the country of the sender and recipient and the amount of the amount.

In the appendix to the PayPal Terms of Use can be found in the section about cross-border personal payment a table divided into columns. (see sources at the end of the article) Depending on the country of the payee and the country group of the sender, the fees for payments financed entirely by bank accounts or with credit and the costs for transactions financed entirely or partially by credit card can be determined.

Example: PayPal fees for international transfers

For example, if a German recipient receives a personal payment from a Northern European country and the payment is financed entirely by credit card, a variable fee of 3.7% of the payment amount on, there is also one Fixed fee. The latter is due in the respective national currency and can also be found in the appendix mentioned above. PayPal includes Denmark, Finland, Iceland, Norway and Sweden in Northern Europe.

For cross-border business payments, fees are the same as for receiving domestic payments, with one Cross border fee come in addition. This is determined by the country group of the payer. If you stick to the above example, the cross-border fee is 1.8% for Northern Europe.

If you pay in another currency, PayPal converts everything into euros by default, for which one Exchange rate fee accrues. This is included 2.5 % above the current buying exchange rate. Unfortunately, the pure exchange rate cannot be determined.

Exchange rate at PayPal

The PayPal exchange rate makes it clear how unsuitable the provider is for international transfers. All fees are offset by PayPal using the exchange rate. There is no separate listing of the individual fees. Large losses can arise, especially with large amounts in foreign currency.

Example of the bad PayPal exchange rate

A few days ago I spontaneously got a plane ticket in Thai Baht (THB) booked with Etihad Airways. Payment had to be made in THB. Before I compare the exchange rate with the exchange rate on my credit card, a screenshot of the current exchange rate is shown in advance.

For the test, I continued the booking with PayPal to see what amount I would have to pay in the end.

Due to the bad exchange rate, I decided to pay with my credit card. My gut feeling was correct, because I had a significantly better rate for the credit card statement and, in total, I had a transfer28,86 € saved. PayPal can also be very expensive!

PayPal fee calculator

Offered on the web PayPal fee calculator should help to calculate the applicable PayPal fees. A result is obtained by entering the amount of money to be sent, the type of payment and the currency. In terms of fees, it is also important whether the account is billed via a bank account or PayPal credit on the one hand, or via a credit card on the other.

However, there is no official fee calculator. The data can be out of date and incorrect. A fee calculator to determine the costs is therefore only recommended to a limited extent, e.g. B. to check your own calculation!


In some situations, paying with PayPal is free and cheap. In other situations, PayPal is comparative simply too expensive! For example, with many international payments in a foreign currency.

PayPal advertises transparency, but in reality there is very little to be said for it. The company's fee structure is more than complex, and PayPal itself does not provide the ability to automatically calculate the fees for a money transfer in advance. It is also not very transparent to simply offset all fees with the exchange rate and not list the costs separately.

With the test winner, you can transfer money abroad at the real exchange rate and very cheaply. The first transfer is free!

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