How Much Does PayPal Charge For Credit Card Processing

Florence Carpenter

Every year, online sales continue to grow. For instance, PayPal processed around 25% more payments year-on-year in 2020. Many merchants may wonder how much the company charges for credit card processing, and whether their rates are competitive compared to other payment processors. 

PayPal charges flat-rate fees that vary depending on the type of transaction. For online transactions, it costs 2.9% + $0.30 per transaction, while in-person transactions range in price. They are a good option for those that want to stay away from long-term contracts and expensive termination fees. 

PayPal Merchant Fees 

PayPal’s merchant fees are generally transparent and easy to understand. The fees listed here are for transactions made in the United States in US dollars but can also increase or decrease depending on the currency type and location. 

Those who use PayPal’s mobile point of sale app or partner with one of their POS partners should expect to pay these amounts for transactions that take place in person: 

  • 2.7% per swiped, dipped, or tapped transaction
  • 3.1% in addition to $0.30 per keyed-in transaction

In contrast, all online transactions and digital forms of payment include the following charges: 

  • 2.9% + $0.30 per online transaction 

These fees are deducted before the funds are deposited in your merchant account, making it simple for most merchants. In addition, those with an average transaction size of under $10 may also qualify for the Micropayments Plan, which charges  5% + $0.05 per transaction. There may also be volume-based discounts, depending on your situation.

Ultimately, PayPal’s clear pricing structure makes them a good candidate for many businesses looking to accept credit card payments. They don’t charge additional fees like PCI compliance fees and termination fees, and also offer discounts for nonprofits that qualify.

If you’re trying to save money on fees, learn more about how you can deduct credit card processing fees from taxes here. 

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