How To Reduce PayPal Conversion Fees

PayPal and its services have taken the world by storm in recent years for everything it has to offer and its ease of use. Founded in 1998, the company has not only been around for so long but has become one of the leading e-commerce companies.

The chances are good that you have seen “Pay with PayPal” on the website you do business with.

Many websites turn to PayPal for online payments if they need a different method not directly related to their credit card.

Given how easy it is to buy or sell one or more items, PayPal has adhered to online sales at one point or another.

However, all of these services are not free, and we’re sure you’ve also faced your fair share of annoying payments that are part of Paypal’s fees.

As they continued to grow and develop their services, these fees also got more complicated depending on what you did.

We will not only talk about the current PayPal fees but also talk about ways to reduce them.

An area in which people find they face the highest commissions is in conversions. PayPal requires money if you are trying to convert one currency to another.

While it may not be ideal, it is a few websites with such a massive international reach, making it the best choice for companies looking to operate globally.

Unfortunately, we’re going to say for now that there isn’t much you can do with many of these fees, as dodging them will require lying about how you use the platform.

This in itself is illegal, and we cannot approve of it in any way. We can give you some tips on how to reduce PayPal fees in entirely legal ways.

Reduce PayPal Conversion Fees

Fixed Conversion Rates

Conversion rates are constantly changing throughout the day and can change at any time.

When making a payment to PayPal that converts from one currency to another, please pay attention to the exchange rate they list.

From there, we’d recommend opening a new tab and looking for the current exchange rate on a site like Google or some other financial site.

Since PayPal has fixed conversion rates that don’t change with currencies, you often pay a higher rate than the currently traded currency.

While this is not a PayPal fee, as they say, it is another way to lose money that you shouldn’t.

Later in this article, when we talk about avoiding PayPal fees, we’ll also look at these conversion rates and reduce them.

You can have a million transactions, but it doesn’t matter if you lose a ton of earned money due to a low conversion rate. A smart man once said, “It’s not how much you earn, but how much you save.”

Foreign Transaction PayPal Fees

As mentioned earlier, PayPal is one of the leading companies globally for facilitating international transactions. However, this can come with a cost. There are two possible fees you are going to incur when using the website.

Cross-Border Transaction Fee

Suppose you are a United States-based company and you do business with someone located outside the country. In that case, there will be a transaction fee of a commission and a 1.5% commission for doing it cross-border. This is one of the many Paypal fees that can increase the value of products.

In most cases, the buyer is the one who bears these costs, so if you are buying goods from the US and live in another country, be prepared to shell out extra money to cover the expenses.

For example, if you purchase in the US with a Canadian card through PayPal, expect to pay approximately 4.2% of the cumulative fees.

Currency Conversion Fees

PayPal fees don’t end there, however. If a buyer buys from you and uses a currency other than your account, PayPal will charge you 4.0% to convert that commission and then add it to your account.

This percentage is subject to change and was recently raised from 3.0% to 4.0% just a few months ago.

Make sure you read the PayPal information when you are about to make a payment to see if the rate has changed in the future.

It will depend on the client’s bank when it comes to who pays the PayPal conversion fee.

If they’re going to exercise, you have nothing to worry about. However, there are times when the bank does not cover it, leaving you to pay the PayPal fee.

Now that we understand the conversion fees and how they apply to the seller and buyer, it’s time to see how we can either ultimately reduce those Paypal fees or find a way to reduce them. Any money saved will help your business.

How to Avoid PayPal Conversion Fees

Now that we have determined that we will buy or sell an item and deal with a different currency, we need to think about beating the system and saving a few dollars.

As we mentioned earlier, we do not condone any illegal PayPal fee evasion activity, but there are a few things you can do to save money.

Deal In Their Currency

The best and easiest way to lower your Paypal conversion fees is to trade in the same currency.

If you buy a product from a European, check in advance if you can convert your money to Euros, add it to your PayPal and then complete the transaction.

You will be charged a transaction fee as usual, but since PayPal no longer needs to convert your money, you will not have to pay an expensive 4.0% conversion fee.

When it comes to selling merchandise, you need to talk to your buyer and see what can be arranged. You may not be able to accept their currency, so in that case, you’ll want to talk to them and see if they can convert to yours.

If you are trading a popular currency such as the Euro or the US Dollar, this is recommended anyway.

If they can do this, you will have to pay PayPal fees again in the form of a transaction, but you will not be affected by a 4.0% conversion fee.

In general, you should always make sure that your buyers are paying you in your local currency, making the transition easier for everyone involved.

Create a Borderless Account Elsewhere

If you want to avoid those PayPal conversion fees and save your money, it is highly recommended that you take the time to create a borderless bank account on a third-party website and then transfer that money to PayPal after you convert it.

This is usually one of the best things to do, as it can save you a lot of money.

Please don’t assume that this will allow you to avoid conversion fees altogether; however, as a rule, they will give you a much higher speed than what PayPal offers and will also not charge you almost the same amount when converting money.

Once you convert the currency, you can move it to your bank account or your PayPal. Finding ways to avoid altering your money through PayPal is the best solution to bypass PayPal’s huge fees.

PayPal’s Conversion Fees Vs. Different Websites

The next thing we’re going to do is look at PayPal’s current transaction and conversion fees and see how they stack up against other websites.

This will help you understand how much money you will save or spend and what service you want to use.

We will not jump to PayPal because we have already discussed the 4% commission, so instead, let’s take a quick look at some of the other websites and the fees they charge.


Revolut is another good international banking service that many people use. When it came to researching conversion fees, it wasn’t easy to get a definite answer.

Revolut states that they use the same exchange rates that banks receive with a small commission. After some investigation, you can expect to see 0% -2% conversion fees. However, you should find out for yourself.


Wise can outperform PayPal’s variable transfer rate in terms of fees, ranging from 0.33% to 3.56%. Even at the highest level, it is still below what PayPal can offer. There is also a small flat fee for the transfer, but it is so tiny that it is almost negligible.

The Pros and Cons of PayPal

Let’s now go back to PayPal and take a look at the many reasons why you might want to use their currency conversion services, as well as some of the reasons why you might want to move elsewhere.

After all, there is nothing wrong with doing business, and paying PayPal fees may be the least of your concerns.


The biggest plus for PayPal’s easy commission absorption will be ease of use and speed. While you may not be too happy with Paypal’s conversion fees, in the end, the transaction is fast, and you get your money.

The minute you need to transfer currency to another account, convert and then add back, you are looking at the wasted time.

What’s more, there is a fee for transferring your money to and from websites, which can end up being the same as PayPal’s fees.

If you’re looking for fast transactions without a lot of hassle or extra work, paying a 4% Paypal fee won’t be the end of the world.


4% is 4%, and that’s money you can save if you’re willing to put in a little more money. If you’re eager to do your research and look at other websites, you might find something with lower commissions than PayPal.

Closing Opinions

As we mentioned, it is entirely up to you whether you want to absorb that 4% conversion commission or not. There is no way to lower your PayPal conversion fees, but there are ways to negate that and continue to do business entirely.

The first thing you need to do is make sure you only accept one currency. The fewer times you have to convert money, the better for you.

However, if you still need to make conversions, you must decide based on all the research available.

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