How To Avoid Paypal Fees
Avoiding PayPal fees entirely can be tricky because PayPal charges fees for many transaction types, but you can definitely minimize or avoid fees legally by using some smart strategies. Here’s how:
How to Avoid or Minimize PayPal Fees
1. Send Money as “Friends & Family”
- If you’re sending money to people you know personally, use the “Friends & Family” option.
- No fees if you use your PayPal balance or linked bank account (no credit/debit card).
- Warning: Don’t use this for business or goods/services—it violates PayPal’s rules.
2. Use Bank Transfers Instead of Cards
- Funding payments with a linked bank account or PayPal balance avoids fees.
- Credit/debit card payments usually incur fees (2.9% + fixed fee).
3. Ask Buyers to Pay Fees
- If you’re a seller, build fees into your pricing or add a surcharge (where allowed).
- Some merchants add a “PayPal fee” line so buyers cover the cost.
4. Invoice Outside of PayPal
- Use other invoicing/payment platforms with lower fees if you process lots of transactions.
5. Withdraw Funds to Your Bank Account
- Withdrawing money to your bank account is usually free if you do a standard transfer (which takes a few days).
- Avoid instant transfers which have fees.
6. Use PayPal’s Micropayments Option (If Applicable)
- For small payments (<$10), micropayment fees can be lower than standard fees.
7. Consider Alternatives for Selling
- For large or frequent transactions, use other payment processors with lower fees or negotiated rates.
What Fees Are Hard to Avoid
- Receiving money for goods and services: usually 2.9% + $0.30 per transaction (in the U.S.).
- Currency conversion fees if you send/receive in different currencies.
- Chargeback or refund fees if disputes arise.