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Understanding PayPal Credit Card Fees
PayPal offers transparent pricing and a familiar setup for businesses that want to start accepting credit cards quickly.
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Table of Contents
For small businesses that want to start accepting credit cards without a lengthy setup process, PayPal offers a familiar and flexible option. This guide breaks down how PayPal credit card processing works, what fees to expect and where the platform makes the most sense for growing businesses.
Does PayPal offer credit card processing?
Yes — and for many small businesses, PayPal can be one of the fastest ways to start accepting card payments without a lengthy setup process or traditional merchant account application.
A PayPal Business account lets you accept credit card payments (and other payment forms) online, in person at the point of sale (POS) and through invoices or payment links. It also supports digital wallets, including Google Wallet and Apple Pay, giving customers more ways to pay.
How much does PayPal charge for credit card processing?
Like most credit card processors, PayPal charges a flat percentage rate on transactions, along with per-transaction fees for certain payment types. The company also offers optional services that can increase your costs, although its core payment-processing tools come with no monthly subscription fee.
Here’s an overview of PayPal’s processing rates and per-transaction fees:
Credit card processing: Standard debit and credit card payments processed online start at 2.99 percent plus $0.49 per transaction. Transactions completed through PayPal Checkout, Guest Checkout or Pay with Venmo cost 3.49 percent plus $0.49 per transaction. Rates vary depending on the payment method and how the transaction is completed.
Point-of-sale payments: Transactions processed through a PayPal point-of-sale card reader cost 2.29 percent plus $0.09 per transaction. This same rate applies to QR code payments processed through PayPal.
Card-not-present transactions: When a card is manually keyed in at the point of sale, the rate is 3.49 percent plus $0.09 per transaction.
Website and digital invoice payments: Debit and credit card payments accepted through your website or via digital invoice cost 2.99 percent plus $0.49 per transaction, while PayPal Checkout, Pay with Venmo and Pay Later transactions carry higher rates.
Virtual terminal payments: A virtual terminal lets you manually enter card payments through a web browser when the customer isn’t present. PayPal’s virtual terminal costs $30 per month, plus 3.39 percent and $0.49 per transaction. When you accept credit cards over the phone, by fax or through the mail, these fees apply.
Did You Know?
If you're debating between Square and PayPal for your payment processing needs, read our detailed Square vs. PayPal comparison to help determine the best solution.
PayPal’s additional fees and services
Beyond standard transaction fees, PayPal charges a handful of additional fees worth factoring into your cost analysis.
Chargeback fees: If a customer disputes a transaction and the chargeback moves forward, PayPal charges a chargeback fee of $20 per incident for U.S. merchants.
Cross-border fees: Cross-border fees apply when you accept payments from customers outside the United States. PayPal adds 1.5 percent to the transaction amount for international commercial transactions, plus an additional fee if currency conversion is required.
PayPal Payments Pro: $30 per month. This optional service supports more customized website checkout experiences and includes access to PayPal’s virtual terminal, which is useful for businesses that accept credit cards over the phone, by fax or through the mail.
Overall, PayPal’s pricing is relatively straightforward, but optional tools, international sales and payment disputes can increase your total processing costs over time.
FYI
PayPal works well for many startups and small businesses, but as your sales volume grows or your processing needs become more complex, one of the best merchant account services may offer more flexibility and a dedicated account.
What are the terms and conditions of PayPal credit card processing?
PayPal doesn’t lock merchants into a long-term processing contract. Instead, businesses agree to PayPal’s user agreement during signup, and service generally runs on a month-to-month basis with no early termination fee.
That flexibility can be a real advantage for newer businesses that are still getting established. If your sales volume grows to the point where a full-service processor offers better rates or more customization, you can usually move on from your PayPal Business account without dealing with contract buyouts or early cancellation penalties.
Tip
If your business starts processing higher sales volume or needs custom pricing, one of the best credit card processors may offer lower rates, dedicated account support and more room to grow.
What are typical credit card processing fees?
The following are common payment-processing costs, making it easier to compare industry-standard rates and fees with PayPal’s pricing.
Monthly fees: Many credit card processors charge a monthly fee (sometimes called a statement fee) that ranges from $5 to $15. It may be higher if it includes Payment Card Industry (PCI) compliance or gateway fees.
Monthly minimum: A monthly minimum typically ranges from $20 to $50. In most cases, this refers to the minimum amount you pay in processing fees, not a required dollar amount of monthly sales.
PCI compliance fee: When processors charge separately for PCI compliance, the fee typically ranges from $75 to $150 annually, though some providers spread that cost out as a monthly charge or bundle it into other account fees.
Payment gateway fee:Payment gateway fees vary by provider. Most are charged monthly, though some gateways also include a small per-transaction fee.
Various network fees: Other network fees, including Mastercard’s Merchant Location Fee and the Visa Fixed Acquirer Network Fee, may be passed on to you as monthly or annual charges.
Some fees are charged by occurrence, including the following:
Batch fees: Batch fees are nominal daily fees you pay when you close out the day’s sales. They typically cost 10 to 30 cents (often about the same as your per-transaction fee).
Address Verification Service (AVS) fees: AVS fees are usually a few cents per transaction when you use this tool to verify the cardholder’s address and ZIP code to help reduce credit card fraud.
Voice authorization: Voice authorization is another anti-fraud tool with a small per-use fee. It’s rarely required, but you’re charged each time it’s used.
Chargeback fees: Chargeback fees are typically $20 to $100 per incident, with some high-risk processors charging even more depending on the account terms.
PCI noncompliance fees: If you fail to complete your annual PCI compliance requirements, some processors charge an ongoing noncompliance fee — often $20 to $50 per month or more — until your account is brought back into compliance.
Nonsufficient funds (NSF) fees: An NSF fee is charged if you don’t have enough money in your business bank account to cover the fees you owe the processor.
Some credit card processors also charge early account cancellation fees, membership fees and fees for vague “additional services” buried in the fine print of a contract. Always read the full terms before signing, as these charges can quietly drive up your total payment-processing costs over time.
PayPal credit card processing FAQs
PayPal doesn't charge a monthly fee for its standard credit card processing services, which is one reason it's popular with startups and smaller businesses.
However, some optional services come with recurring costs. For example, PayPal Payments Pro costs $30 per month and includes access to PayPal's virtual terminal, while other add-ons — such as recurring billing tools — may carry separate monthly fees.
PayPal's pricing is fairly straightforward, but there are a few extra costs merchants should know about. Along with standard transaction fees, you may also see chargeback fees tied to disputed payments, cross-border and currency conversion fees when selling internationally, or monthly charges for add-on services such as PayPal Payments Pro and recurring billing tools.
Possibly. PayPal offers custom and interchange-plus pricing for some businesses, especially those with higher processing volume or payment needs that are a little more complex. Eligibility isn't publicly tied to a specific sales threshold, so if your business seems like a fit, you'll usually need to contact PayPal directly to see what's available for your account.
You can limit the fees you incur with PayPal by:
Using standard bank transfers: Instant transfers make funds available right away, but PayPal charges an additional fee for that convenience. If you can wait an extra day or two, standard transfers to an eligible bank account are typically free.
Choosing lower-cost payment methods when possible: PayPal's rates can look a little different depending on how your customers pay. In-person card payments run through a PayPal card reader, for example, usually cost less than manually keyed-in transactions or some types of online payments.
Talking to PayPal as your volume grows: Businesses with higher processing volume or more complex payment needs may qualify for custom or interchange-plus pricing. Contacting PayPal directly may help you access lower rates as your business scales.
Amanda Hoffman and Jennifer Dublino contributed to this article.
Adam Uzialko, the accomplished senior editor at Business News Daily, brings a wealth of experience that extends beyond traditional writing and editing roles. With a robust background as co-founder and managing editor of a digital marketing venture, his insights are steeped in the practicalities of small business management.
At business.com, Adam contributes to our digital marketing coverage, providing guidance on everything from measuring campaign ROI to conducting a marketing analysis to using retargeting to boost conversions.
Since 2015, Adam has also meticulously evaluated a myriad of small business solutions, including document management services and email and text message marketing software. His approach is hands-on; he not only tests the products firsthand but also engages in user interviews and direct dialogues with the companies behind them. Adam's expertise spans content strategy, editorial direction and adept team management, ensuring that his work resonates with entrepreneurs navigating the dynamic landscape of online commerce.
