What Are the Changes for Using a PayPal Account?


Quick Answer

As of February 2015, there is no fee for sending payments using PayPal if the money comes from the account balance or a checking account and the transaction takes place in the United States. Credit or debit card users pay a flat fee plus 2.9 percent of the total transactions.

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Full Answer

When sending a personal payment, the sender has the choice paying the fee or passing it to the recipient. However, when someone receives payment for goods or services through PayPal, he pays the same fee as credit card users. Payments sent to other countries also encounter fees that depend on where the user sends the money. When customers deposit money from a PayPal account directly into a bank account, the company does not charge a fee. If the customer requests a check in the mail for money from his account, PayPal charges $1.50.

In the original PayPal business model, there were no fees. The company's plan was to collect interest on money that customers left in their accounts to cover the costs of operation and provide a profit. However, customers tended to remove money from their account as soon as someone deposited it. Credit card companies charged PayPal approximately 2 percent of each transaction, leaving PayPal with an unsustainable business model. Adding the fees for debit and credit card transactions became necessary to turn around the company.

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