PayPal has been used widely worldwide, which is well-known for international transactions. In this article, we will list some FAQs about PayPal, concerning issues including security, refund and risks, and give explanations and answers to your confusion.

What is PayPal?

PayPal is one of the largest payment gateways and platforms providing services around the world, which is one of the most effective payment methods to send money internationally. It was founded in 1998, headquartered in SAN Jose, California, USA. There have been more than 100 million registered accounts around the world.

Anyone can use PayPal to send or receive money online conveniently and safely with an email address so that avoid troubles in transferring money or sending checks traditionally. It supports transactions in more than 20 currencies, covering more than 190 countries and regions. PayPal is regarded as an ideal choice for cross-border transactions.

What are the functions and features of PayPal?

PayPal provides payment and financial services for both individual consumers and businesses, including managing supply chains and suppliers, converting currencies and evaluating customers’ behaviors, which helps consumers shop, pay and transfer conveniently and safely.

PayPal offers extra protection for your sensitive data when you shop online and submit payment information. It also uses a series of functions to protect your account security, like point-to-point data encryption, dual protection for accounts loggingin and email confirming for transactions.

For buyers, PayPal secures information about shopping without leaking detailed information of bank cards or accounts to others. Registering an account with PayPal is quite fast. Once you are a user of PayPal, you can send money internationally with sellers from about 56 countries and regions worldwide. It takes a short time to finish the payment online, which is quite fast.

For sellers, PayPal will protect all data with the most advanced encryption techniques. No matter where the buyer is from, money will be sent quickly into the seller’s PayPal account. PayPal also has different tools to assistant sellers manage transactions and increase efficiency.

How about charges and fees for payments transfers and services?

PayPal needsto charge fees for services and business items.Users on PayPal are mainly divided into two types, individual consumers and merchants. According to different payment and service ways, charge standards would be different as well.

Personal Payments (not available for all countries)

In the U.S, personal payments are not required to pay for any fees when using PayPal to send or receive money to their familiar accounts, like families and friends. But fees are required when sending and receiving money through credit cards or debit cards.

Purchase or Business Payments

Buying products by PayPal requires no fees or charges, but if the user wants to get money from products, then every transaction will charge fees. Fees for doing business in the U.S are 2.9% plus $0.3 per transaction, and outside of the U.S are 4.4% plus a fixed fee, concrete fees according to different countries.

Cross-Border Payments

When transferring money from a country or a region to another, charges are necessary. Here are some lists of charges in different situations and countries for your reference.

Additional percentage-based fee for international commercial transactions
Sender’s market/region Fee
Canada &US 2.00%
Europe Ⅰ 0.50%
Europe Ⅱ 2.00%
Northern Europe 0.50%
Rest of the world 2.00%
Fixed fee for commercial transactions (based on currency received)
Currency Fee Currency Fee
Euro 0.35EUR New Zealand dollar 0.45 NZD
Australian dollar 0.30AUD Singapore dollar 0.50 SGD
Canadian dollar 0.30CAD Russian ruble 10.00 RUB
US dollar 0.3USD Hong Kong dollar 2.35HKD
Fixed fee for commercial transactions (based on currency received)
Currency Fee
Euro 0.35EUR
Australian dollar 0.30AUD
Canadian dollar 0.30CAD
US dollar 0.3USD
New Zealand dollar 0.45 NZD
Singapore dollar 0.50 SGD
Russian ruble 10.00 RUB
Hong Kong dollar 2.35HKD
Fixed fee for PayPal Online Card Payment Services transactions (based on currency received)
Currency Fee Currency Fee
Euro 0.35EUR New Zealand dollar 0.45 NZD
Australian dollar 0.30AUD Singapore dollar 0.50 SGD
Canadian dollar 0.30CAD Russian ruble 10.00 RUB
US dollar 0.3USD Hong Kong dollar 2.35HKD
Fixed fee for PayPal Online Card Payment Services transactions (based on currency received)
Currency Fee
Euro 0.35EUR
Australian dollar 0.30AUD
Canadian dollar 0.30CAD
US dollar 0.3USD
New Zealand dollar 0.45 NZD
Singapore dollar 0.50 SGD
Russian ruble 10.00 RUB
Hong Kong dollar 2.35HKD
Chargeback fees
Currency Fee Currency Fee
Euro 16.00 EUP New Zealand dollar 28.00 NZD
Australian dollar 22.00 AUD Singapore dollar 28.00 SGD
Canadian dollar 20.00 CAD Russian ruble 640.00 RUB
US dollar 20.00USD Hong Kong dollar 155.00 HKD
Chargeback fees
Currency Fee
Euro 16.00 EUR
Australian dollar 22.00 AUD
Canadian dollar 20.00 CAD
US dollar 20.00USD
New Zealand dollar 28.00 NZD
Singapore dollar 28.00 SGD
Russian ruble 640.00 RUB
Hong Kong dollar 155.00 HKD

Withdraw Money from PayPal

Withdrawing money from PayPal into your bank accounts or cards or accounts requires fees. According to its official website, it is 3.00% above the Base Exchange rate. If the currencies are not the same, extra conversion fees are required as well.

You can get more detailed information about charges in many countries on its official website according to your real situation.

Common Issues about PayPal

Why some Chinese suppliers are unwilling to use PayPal?

For sellers, they may face the risk of refuse payments from PayPal. Based on credit card payments, PayPal has an appeal period of 180 days. During this period, buyers can ask for an application for drawback, for various reasons, like counterfeit goods, products not as described, no goods received poor or wrong qualities and so on; even the reason is that the payment was not finished by the buyer itself.

Under such circumstances, PayPal would freeze funds in accounts, and the PayPal accounts of sellers may be complained or touch the risk control system so that frozen funds cannot be withdrawn with 180 days.

Is PayPal free to transfer money?

In most cases, PayPal is free for payments of personal accounts to shop online or transfer to individual accounts. But for business payments, it charges fees for different items. You can find concrete information in the third part above of this article, which would tell you in detail.

How does PayPal protect sellers’ interests?

PayPal provides full compensation of eligible transactions for sellers, and the products need to be in accordance with selling regulations. If sellers receive unauthorized payments, or complaints about undelivered goods but the orders eligible, PayPal would allow sellers to reserve the full amount of the orders.

PayPal also protects sellers from unauthorized payments and fraudulent orders to reduce the risk, and protect eligible transactions without worries.

What are the differences between PayPal and AliPay?

PayPal shares more markets than Alipay around the world, and the latter is used more widely in China. PayPal is shared more by many top websites, and supports more currencies, countries and regions.

Which is the better choice, PayPal or AliPay?

This is according to your demands on business. If you want to make business or import from China, AliPay would be preferred by more Chinese suppliers. If you want to make business in different countries worldwide, and your business scale is not small, PayPal is a better choice. Choices are not changeless but vary with demands.

You can also read another article about how to use Alipay and Alipay safety on our website.

Other Problems about PayPal

Necessary Communication before Payments

PayPal is more likely to support buyers. Usually, PayPal is more suitable for micropayments, so it is better to choose a letter of credit or telegraphic transfer to finish large payments; in other words, large payments refuse PayPal.

If your customers insist on paying through PayPal, here are some points to pay attention to.

First, before placing orders, sellers should explain and clarify the real situations and discrepancies of products may have. If customers cannot accept such cases, sellers should suggest them not to order.

The key part is that don’t conceal anything necessary to customers, or the follow-up problems would be bad for sellers. After shipping goods, sellers should upload evidence immediately, like tracking numbers, marine bills of lading.

Shipments after Payments

Maybe many sellers don’t care much about shipments after payments, which are correlated with refund issues. Some factors of delivering goods would cause refunds. The follow-up aspects deserve your focus.

First, after payments from buyers, PayPal needs to take three to seven days to review. When it shows money into the account and is available delivering, then sellers can send out goods.

Second, the address must be in accordance with it confirmed by customers paying on PayPal. If the delivery address is not in accordance with the registered one on PayPal, sellers should contact the customers to refund and change the same address. It may be a little bit complex but helps sellers control risks.

Blocked Account Issue

General frozen account issues can be solved by submitting materials to prove.

However, if products are tortious, imitated or shoddy, sellers should be prudent to use PayPal. Referring to infringing goods sales, PayPal accounts would be limited forever. This is the most basic sales category, and if any seller breaks this rule, PayPal would limit him, block his account and transfer the balance as compensation.

If there is a frozen account issue or a lawyer’s letter received, sellers need to try to contact customers who have payment records before and tell them if they can ask PayPal to refund and pay by other means. Because in frozen account status, receivers cannot operate refunds, but only ask customers to apply for a refund, or sellers bear all losses.

What’s more, fees on unfreezing accounts and the expense to hire a lawyer should be considered if the problem would make a great difference. If the follow-up businesses are affected greatly, sellers should pay money to solve the problem; if the balance in accounts is far less than fees to solve the problem, sellers can regard it as buying a lesson.

The reasons why accounts are easy to be frozen include selling infringing goods, high complaint rate, involving in fraud and so on. 

Common infringing goods include 3C digital accessories, electronic cigarettes, virtual recharge products, jewelry, etc.

Matters Needing Attention

Sellers must remember that never disclose their PayPal email address and detailed information to unknown buyers, because some people pretend to ask products, but actually, they just use the chat message and emails as evidence to complain.

If customers apply for a refund to PayPal, sellers need to respond, process and upload evidence at first. If they do not process within the validity, PayPal will refund the customer directly. It would be sellers’ losses

Meanwhile, product brands should not be involved in PayPal transactions.

In a word, before using PayPal to make transactions, users should understand the service regulations of PayPal clearly to avoid breaking basic rules.

The End

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