PayPal Hidden Fees and How to Ignore them

PayPal is the second-most popular and most extensive online payment processor, with over 17 million merchants worldwide. This payment method is fast, convenient, and easy to use for your day-to-day online financial transactions. PayPal has been widely used for good reason, but it has a significant downside: the expensive hidden fees for money transfers or online purchases.

Of course, nobody likes paying PayPal hidden fees to receive the funds you have worked hard for. Right? But is there a way to circumvent this? Yes! We have uncovered 5 simple ways to keep a close tab on. Read on for a closer look at PayPal’s hidden fees and how to avoid them.

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PayPal account registration is free, and the signing-up process does not cost you a penny. For this reason, some people feel that PayPal is great for international money transfers. No, it’s not—in fact, it’s actually very expensive.

For example, while you don’t get charged an upfront fee, PayPal simply converts the cost of transferring money in a foreign currency into its exchange rate margin. While you may find it complicated to work out what exactly their currency conversion rate margin is, the PayPal rate is taken from the standard exchange rate (known as the Interbank Exchange Rate), which is not guaranteed.

Depending on your country of residence, PayPal’s exchange rate ranges between 2.5% and 4%. It is much more expensive than Knightsbridge FX.

In addition to these PayPal fees, there are also other hidden fees that you can incur as you conduct your online business. They include:

• Withdraw fee: While withdrawing money directly to your bank account is free, there is a fee to cancel outside of the US. Some banks may even charge you for withdrawing from PayPal.
• Reversed payment fee: You will only receive a percentage of your paid fee when you refund a client, as PayPal retains a fixed cost.

How do you lower or Ignore PayPal's Hidden Fees?

They say knowledge is power. Now that we know PayPal's hidden fees, we can actively avoid them.

Apply for merchant fees.

If you consistently receive $3000 or more in sales on a monthly basis, you can apply for merchant transaction fees. If you qualify, your transaction rate is reduced to 1.9%.

Trade in Local Currency

While it is customary to incur some fees when exchanging currencies, you can avoid PayPal's hidden fees by accepting payments in the PayPal currency that you trade-in.

Ask to Be Paid as a Friend or Family

You can ask your customers to pay you via the friends or family option in PayPal. With this method, your client won’t be charged a fee for sending you money and yowon't’t also be charged a fee for receiving your fundwon'tou deserve to save as much of your hard-earned money as possible rather than giving it over to PayPal in the form of hidden fees!