What is the new fee for PayPal Australia for overseas money transfers?

Recently Paypal Australia has introduced a new $6 fee and has increased its processing fee for credit card transactions for overseas money transfers. So this means if you send money to a friend or family member overseas you have to pay AU$5.99 fee per transaction using Paypal. If all or part of that transfer is covered by a credit or debit card, Aussies will also cop a 2.6% fee, plus a currency conversion fee. Before the updated terms, this fee was 2.4%.

It’s important to note that the new fees are incurred by Australian account holders sending money out of the country that doesn’t involve international commercial transactions. 

Also while it might be meant for sending your family some dosh when needed, it should be noted that some sellers request a “personal transaction” as opposed to a “goods and services” settlement when making a purchase. 

Standard fees for Australians using PayPal

Personal Transaction fees are based on the payment method used to fund the transaction. A currency conversion may apply if sending a foreign currency.

If you are an Australian account holder sending money to a friend or family member with a PayPal account in Australia, you may pay a fee depending on how you pay. This means if your payment method is Paypal balance or Australian bank account then its free but if any portion of that method is funded by a card then 2.6% of the portion funded + fixed fee based on the currency is charged.

If you are an Australian account holder sending money to a friend or family member with a PayPal account in a country other than Australia, the fee you pay depends on the payment method used and the amount you are sending. If you’re sending a currency other than Australian Dollars, the applicable fee will be a comparable amount in that currency, using the prevailing transaction exchange rate.

  • When no currency conversion is involved, there is no fee for sending Commercial Transactions (i.e., buying something).
  • Also fees for receiving Commercial Transactions are taken from the total transaction amount.
  • There are also fixed fees that are based on the currency received and transaction type.
Paypal fees in Australia

If PayPal converts currency, it will be completed at the transaction exchange rate which is set for the relevant currency exchange. The transaction exchange rate is adjusted regularly and includes a currency conversion fee applied and retained by paypal on a base exchange rate to form the rate applicable to your conversion. The base exchange rate is based on rates within the wholesale currency markets on the conversion day or the prior business day; or, if required by law or regulation, set at the relevant government reference rate(s).

For some uses of your PayPal account, PayPal may determine currency conversion is necessary. For any of the following transactions that involve a currency conversion in connection with your PayPal account, the currency conversion fee is 3.5% for converting to US Dollars or Canadian Dollars, and 4.0% for converting to all other currencies:

  • Paying for goods or services in a currency other than the currency the goods or services are listed in.  
  • Sending money to a friend or family member such that they receive a different currency from the currency you pay in.
  • Sending money using PayPal’s Payouts or MassPay products such that your recipients receive a different currency from the currency you pay in.
  • For all other PayPal transactions involving a currency conversion, the currency conversion fee is 2.5%.

Payment when funded by credit card

PayPal credit card

When your payment is funded by a debit or credit card and PayPal determines a currency conversion is necessary, you consent to and authorise PayPal to convert the currency in place of your debit or credit card issuer. In most cases, you may have the right to have your card issuer perform the currency conversion, if applicable for that card issuer and network.

Currency preference selections may be presented to you in various forms, including a choice of which currency is used for the transaction, whether PayPal or your card issuer performs the conversion, or which conversion rate is used for the transaction, among others, and may be made available individually for each card and for each automatic payment agreement. If your card issuer convers the currency, your card issuer will determine the currency conversion rate and what fees they may charge.

PayPal will always perform the conversion for transactions where your PayPal balance or linked bank account is the payment method.

Points to note

  • There is no fee to open a PayPal account. However, Paypal may charge an expanded use fee to increase your sending limit. This fee is refunded to your PayPal balance when you successfully complete the card verification process.
  • The expanded use fee (verifying card details) can be up to $2 AUD.
  • The records request fee is $10 AUD (per item). Paypal will not charge for records requested in connection with your good faith assertion of an error in your account.
  • The fee for withdrawing your USD balance to your linked United States bank account is 2.5%. Any conversion of your PayPal balance from one currency to another currency will attract the corresponding currency conversion fee
  • The bank return fee is charged when a withdrawal attempt fails because incorrect bank account or delivery information is provided. The bank return fee is $5 AUD.

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