PayPal Fees for Businesses: Everything You Should to Know

Curious about PayPal business account pricing in 2024? If you are a business owner and you are thinking about using PayPal for your needs, the first thing to look at is fees. They will determine whether this payment service will be the right option for you.

In this article, you will learn about all current business account PayPal fees for different operations. Also, take a look at how the fees are calculated and learn some tips on how you can reduce them.

Understanding PayPal Business Account Types

The choice of a PayPal account resembles the purchase of a car—there are a variety of different vehicles for various purposes. In such a way, your choice should compare neither to driving an SUV on downtown streets nor should it be a subcompact car off the road.

When managing your business finances, PayPal offers a range of account types for whatever your business may need. Whether you're a small entrepreneur or a large company with complex payment requirements, there is the right business account just for you.

Plus, activating an account is free. PayPal offers various tools to suit your business’s specific needs.

PayPal Business Standard

PayPal Business Standard is the basic account type for small businesses. It offers the necessary features, such as accepting payments, creating invoices, and accessing customer support. This account is suitable for startups or those with simple payment needs.

PayPal Business Plus

This one provides additional features to enhance your business operations. Besides the functionalities of the Standard account, Business Plus offers lower transaction fees, advanced fraud protection, and the option to accept payments over the phone. This choice is perfect for businesses looking for flexibility and additional security measures.

PayPal Pro

The Pro option is a choice for those who require more customization in their payment solution. With a Pro account, you can integrate PayPal directly into your website, which will create a truly seamless experience at checkout. It also allows accepting credit card payments without redirecting customers to the payment service website. Thus, if you need a significant online presence and a tailored payment solution, this type of account is your perfect choice.

PayPal Enterprise

As for large-scale businesses, there is an option called PayPal Enterprise. It provides advanced features and services that cover dedicated account management, customizable payment solutions, multi-user access, and extensive reporting capabilities. PayPal Enterprise is designed to handle high transaction volumes and complex payment processes. Both of those two are the daily tasks of enterprise-level organizations, and therefore, this choice suits such organizations perfectly.

Key Benefits of PayPal Business Accounts

Does PayPal charge a fee for a business account? Yes. But it also provides many benefits that can help your business thrive. Let’s find out what they are.

Secure Online Payments

A business account is a secure way to conduct online payments. It uses robust encryption and fraud protection measures. They ensure that your online transactions are safe and your customer's financial information is protected.

Seller Protection

PayPal provides seller protection for eligible transactions. This payment system safeguards users who buy goods and services. This helps mitigate financial risks for companies’ customers, allows businesses to build trust with their target audience, and provides excellent customer service.

Customized Invoicing and Checkout Experience

With a business account, you can create customized and professional invoices. Additionally, PayPal's API allows you to rework the checkout process on your website. As a result, you can have a branded and user-friendly interface to enhance customer satisfaction.

Access to Business Tools and Insights

PayPal business accounts offer a range of tools and features to support your business operations. These include inventory management, sales reporting, analytics, and integration with popular e-commerce platforms. 

Overview of PayPal Business Fees

Here is an overview of the key PayPal business account transaction fees that you may encounter.

Transaction Fees

PayPal business transaction fees are charged when you receive payments. The fee structure consists of a percentage of the transaction amount. For domestic transactions (standard credit and debit card payments), PayPal charges 2.99% + fixed fee depending on the country ($0.49 for the US) and 3.49% + fixed fee for all other commercial transactions.

Cross-Border Fees

For businesses involved in international transactions, PayPal applies cross-border fees. PayPal charges 1.5% + fixed fee depending on the currency and country each time when a payment is received or sent.

Currency Conversion Fees

When a payment involves currency conversion, PayPal applies currency conversion fees of 4%. The conversion rates used may differ from prevailing market rates, and sometimes it's better to find a local exchanger before sending money abroad. At Rates, you can find the financial institution near you with the best conditions.

Withdrawal Fees

If you decide to withdraw funds from your PayPal account to your bank account, the service may charge withdrawal fees. These fees vary depending on the country, chosen withdrawal method, and bank policies.

How PayPal Calculates Fees

So, what are the fees for a PayPal business account? PayPal calculates fees based on the type of transaction, the currency, and the location of the sender and recipient. For most transactions, it charges a percentage commission plus a fixed fee.

Percentage commission

A percentage commission is a fee charged for a percentage of the transaction. This type of PayPal fee for a business account is often used for large transactions, such as credit card payments. For example, if the percentage commission is 2.99%, then PayPal would charge $2.99 for a transaction of $100.

Fixed commission

A fixed commission is a flat fee charged for each transaction, regardless of the amount. This is a minimal transaction fee. This type of commission is used for transactions that are small in value, such as donations or online payments. For US residents, the fixed fee is usually $0.49, meaning that PayPal would charge $0.49 for a transaction of any amount.

Combined commission

Here is an example of PayPal business account fees for receiving money with a commission calculation:

Let’s say you receive a payment of $100 through PayPal. The percentage commission is 2.99%, and the fixed fee is $0.49. The total fee for the transaction would be $3.48, calculated as follows:

• Percentage commission: $100 * 2.99% = $2.99;
• Fixed fee: $0.49;
• Total fee: $2.99 + $0.49 = $3.48.

Tips to Reduce PayPal Business Fees

Apply for lower fees: There are a lot of PayPal business account fee discounts for businesses that meet certain criteria. For example, you may receive a discount if you have a high volume of transactions.

Ask your customers to pay in your currency: This will prevent you from losing money on currency conversion fees.

Withdraw funds strategically: Different withdrawal methods have different fees. For example, instant transfers are more expensive than standard ones. So, if you can, withdraw funds from your PayPal account using a slower transfer method.

Conclusion

Now that you have an idea of PayPal business price and know about what you will get by paying, you can make a more informed decision. The service has separate fees for different financial operations, so it’s something to be aware of when you conduct your business. Also, by using your account smartly, you can save more money.