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PayPal fees explained – what you need to know about the new price hike



PayPal has decided to quietly increase its prices – and at the same time add a weird clause relating to its sellers. Here's what you need to know if you use PayPal, whether you're in the UK or the US.

First spotted here, the payment processor has imposed a number of fee increases on its US customers that will hurt just about anyone who uses the service for anything other than buying. What's more, retailers themselves are being hit by an additional change, which PayPal has dubbed “non-discouragement clause.”

Read on for a look at what's already happened in the US, or scroll down if you're more interested in what to expect with regards to PayPal fees in the UK.

Related: MWC 2017

PayPal fees in the US

First off, lets go through the fee increases. US users looking to convert currency through PayPal will now pay 3.0% instead of 2.5%. The standard transaction fee for sellers selling goods or services online to buyers outside the US also jumps from 3.9% to 4.4%, and non-US store transaction fees are rising from 3.7% to 4.4%.

That’s just the tip of the iceberg, with other changes outlined by PayPal as below:

  • We are removing the tier based fees we charge to nonprofits who receive payments from senders outside the U.S. and are charging a flat rate of 3.7% plus the existing fixed fee based on the currency for all such transactions.
  • We are changing the micropayment fees for in store transactions received from buyers outside the U.S. from 6.0% to 6.5% plus the existing fixed fee based on the currency.
  • We are clarifying that we will assess the $20.00 chargeback processing fee for sellers who win a chargeback but are not eligible for Seller Protection.
  • We are adding the ability to create a negative balance in your PayPal account when we reverse a payment to cover eBay buyer protection claims that the seller loses.


The rises come in addition to the aforementioned “non-discouragement clause”, which PayPal explained in the update:

"In representations to your customers or in public communications, you agree not to mischaracterise PayPal as a payment method. At all of your points of sale (in whatever form), you agree not to try to dissuade or inhibit your customers from using PayPal; and, if you enable your customers to pay you with PayPal, you agree to treat PayPal’s payment mark at least at par with other payment methods offered,” PayPal stated.

In layman’s terms, it means retailers must not attempt to persuade customers to use other payment methods instead of PayPal, but does not give any details on any penalty that will be levied for doing so.

All of the changes will be live from March 29, 2017, with PayPal seeking to stress that they apply only to its US users.

“These changes relate to the updated User Agreement in the US only,” a PayPal spokesperson told us.

However, there's some incoming changes for UK PayPal users, too...

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PayPal fees in the UK

While the changes outlined above only currently apply to US users, PayPal has confirmed that there are incoming user agreement amendments in the UK as well.

A PayPal spokesperson revealed to us:

"We update the user agreement typically twice a year as necessary to enable us to offer new products and services, and to reflect changes that affect PayPal and the payments and e-commerce markets.

"An updated User Agreement for PayPal customers in the UK will take effect on 27 April 2017.

"As usual, we provided 2 months’ notice to our customers in the UK to allow them to review and understand the updated terms of their relationship with PayPal."

Whether or not these updated terms include a clause reminding you not to "...dissuade or inhibit your customers from using PayPal" remains to be seen.

Rest assured it's something we'll be keeping a close eye on.

Related: Google I/O 2017

Watch: Android Pay in the UK – how does it work?

What do you think of PayPal’s price hikes? Let us know in the comments.

Matt Storm

February 16, 2017, 8:17 am

Paypal are the worse online bank i have ever experienced, how are they still trading? This is a global complaint and issue with over 50% of their customers yet nothing ever changes?? they are tied in with ebay, this is their success story nothing more - its all a massive con. They hold your money for days or weeks when you try to transfer with poor excuses such as 'automated security check' they staff have no control either and calling them just makes everything take longer. We all now know this is the only way they generate interest, by forcing it yet us customers have to suffer? Useless for business online trading, unreliable they take weeks to address any issues they have created and or course the most expensive banking service currently available. Stay well clear.....


April 4, 2017, 9:13 am

I don't agree. I've been using it for more than 10 years and I've never had any problems. They're not tied with eBay anymore and most of the major shopping sites use PayPal as well. If they hold your money for days or weeks - there must be a reason for that. I requested a withdrawal to my card and the money was sent the next day.
Yes, their fees are a bit high but it saves you time, it's secure and convenient.

Matt Storm

April 4, 2017, 9:40 am

I am guessing you work for them Bobby? your reply sounds like a paypal advert ;) just search on google, 'paypal complaints' and see what everyone is talking about. If you have not been affected then i am guessing you barley use the service. I have had many discussions with them, there is no reason still to this day and they still tell me its an automated service that randomly halts transfers for security reasons. Totally unreliable for business then...


April 4, 2017, 11:26 am

I wish I worked for them.. :) I use it mainly to pay for services and shop online so I guess maybe that's why I haven't had problems so far.. But you have to agree that there are a lot of scammers and people trying to hack PayPal accounts and that's why they have to take serious measures which I guess affect innocent people like you.

Thomas Blankenhorn

April 26, 2017, 11:08 pm

This world is in a crisis. Middle class getting decimated by bank interest taken away, wider wealth divide via unlawful upward manipulation of the stock market whereupon the wealthy then buy up more homes to force oppressive rents and mortgage prices go up when buying which is a real hardship for most everyone, rightful short sellers of the now 4X overpriced stock market are unjustly forced to lose, and fees abound everywhere. Ebay charges too much and paypal does as well. Both are merely software companies, providing interfaces which should not cost much to maintain. Certainly more product support would be needed for ebay but the rates still do not make sense. The public using these interfaces are making some executives quite wealthy so they can exploit humanity in all the ways they choose. Ebay could be charging 3% and payapl 1% and there'd be greater happiness. So what if the executives make just $500K (still way too much relative to those who actually work hard and get paid 1/25 as much) over their tens of millions per year they get now.

Arthur Davis

May 12, 2017, 11:27 am

It's a double ripoff - not only extortionate charges but they charge more than the stated amount. I am being charged 20p + 5.4% - much higher than they say.

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