How to pay someone with Paypal – with or without an account

TransferWise content team
11.06.18
7 minute read

PayPal is a common and popular way to send and request payments all over the globe. If you shop online, you’re likely already familiar with how to make a purchase using PayPal. But it’s also possible to use PayPal to make a payment even if you don’t have a PayPal account yourself.

This can offer a convenient way to send money to friends and family, and also to make payments for goods and services. It’s worth noting, however, that sending money through PayPal without an account can be relatively costly.

PayPal can also be an expensive choice if you need to make payments internationally, whether or not you have an account with them. For international payments, in particular, you could save a lot of money if you choose an alternative provider, such as TransferWise. More on that later.

This article will touch on:

  • The catches to using PayPal internationally
  • What you should know if you’re sending money to a business through PayPal
  • How to send money through PayPal using your account
  • A table with the pros and cons of each different payment method
  • How to send money through PayPal without an account

With that said, here’s all you need to know about making a payment with PayPal — with or without an active PayPal account.

Using PayPal to pay internationally? There are a few catches.

PayPal allows users to send and receive payments more or less anywhere in the world whether you want to pay back a friend or family member, get paid as a freelance worker, or simply indulge in a little online shopping. However, different services with PayPal come with different costs. It’s well worth understanding the PayPal fee structure before you decide if PayPal is the right way to make your payment.

If you’re sending money to a family member or friend, based overseas, there are several charges to pay.

Some of the costs depend on how you choose to fund the payment.

PayPal International transfer feesCost
Paying by balance or linked bank accountThis is the cheapest — costing you between 0.3%-2% depending on where the payment is headed.¹
Paying by credit or debit cardIf you fund your transfer partially or fully with a card, the fees are much higher — coming in at 3.4%-3.9% of the transaction amount.¹
Currency conversion feeYou’ll be charged a of 2.5 to 3%, depending on the situation. The fees are usually removed from the transfer amount as it’s processed.²
Payments for goods or servicesThese international fees can be even higher — more on that in a moment.

For many customers, when you’re making an international money transfer it’s most likely better value to use an alternative provider like TransferWise. There’s just a small transparent fee, and the exchange rate used is the real, mid-market rate. That means there’s no currency conversion fee to worry about, and you’ll be able to see upfront exactly how much cash your recipient will get. What’s more, TransferWise charges the same fee, whether you’re sending money to a friend, or paying a supplier for a business transaction.

It certainly pays to do your homework before you choose which service you use to make your international transfer.

Sending money to a business through PayPal? You’ll want to be informed

As mentioned above, PayPal fees are typically higher if you’re paying for goods and services, and especially so if you’re making an international payment. That means that it’ll cost more to make a payment to a business than it would do to a friend — and it’ll be much more expensive to send money in a foreign currency than it would be to use US dollars.

Independent research found that paying an international invoice using an alternative provider such as TransferWise can be up to 8x cheaper, compared to paying using PayPal.

In most cases, the costs are charged to the person creating the invoice. This can mean that businesses using PayPal choose to roll up these costs into the invoice amount to make sure they finish up with the right amount in the end.

If this is the case, you might find that both you and the person you’re paying are better off if you choose an alternative way to pay your bill.

How to send money through PayPal using your account

You can make a payment easily using PayPal if you’ve received a money request or invoice. Or you can set up the payment yourself as long as you have the email address or telephone number of the person you want to pay. Here’s how.

Step 1: Start the payment

If you’ve been emailed an invoice or money request, you’ll simply need to click on the ‘Pay now’ button to get started. Depending on the device you’re using, you might then be asked to log into your PayPal account before progressing.

If you need to start the payment yourself, you’ll need to log into your PayPal account and then click the ‘Send and request’ button.⁵

Step 2: Select whether you’re making a personal or business payment

If you’re structuring the payment yourself, PayPal will ask you to confirm if you’re paying for goods and services, or making a payment to a friend or family member, either in the US or internationally.⁵ Remember, the fees and charges could be different for each service, so make sure you pick the right one for your needs.

Step 3: Enter the details for the recipient

You’re asked to input the email address or phone number of the person you wish to pay.⁵ Make sure you’ve got this information correct before you proceed.

Step 4: Confirm the amount and currency

You’ll then need to confirm the amount you want to pay, and the currency to use. This is done using the drop down boxes — just click on the currency you want.⁵

Step 5: Hit confirm, and choose a funding source

Confirm that the payment has been entered correctly, and choose how you wish to pay. You can usually choose between a few different funding sources at this stage — using PayPal balance, a linked bank account, or a credit or debit card.⁵

There are pros and cons to each payment option. So it’s a good idea to know what you’re getting into.

PayPal payment optionProsCons
PayPal balance

Fully funded domestic payments: fee-free⁶

Funding domestic payment with balance and linked bank account: free⁶

International payments carry fees⁶

Payments in currencies other than USD carry fees

Partially funding with credit/debit card also carries fees⁶

Linked bank account

Fully funded domestic payments: fee-free⁶

Funding domestic payment with balance and linked bank account: free⁶

International payments carry fees⁶

Payments in currencies other than USD carry fees

Partially funding with credit/debit card also carries fees⁶

Debit/credit cardPossible to make a payment on PayPal without an account if you pay with credit/debit card

Paying with card brings much higher fees than paying with balance or linked bank account

Domestic payments cost 2.9% of the amount + $0.30³

International payments cost even more

Step 6: Review the payment and you’re done

Once you’ve added your funding source, you’re more or less done. Click the button to confirm the payment, and you’ll receive an emailed receipt showing the payment has been processed.

How to send money through PayPal without an account

To make a payment through PayPal without opening an account yourself, you’ll have to have the recipient send you an invoice or money request. This means you’ll receive an email with either a detailed invoice — usually if you’re paying a business — or a simple note explaining what the money is needed for.

Embedded in the email will be a ‘Pay now’ button, which is all you need to make the payment without opening a PayPal account yourself.

Step 1: Click on ‘Pay now’ in the email or invoice you’ve received

Assuming you’ve received the email detailing the payment, simply click on the ‘Pay now’ button.⁴ If you can’t see the email, it’s worth checking your trash or spam folders, in case it has been sent there.

Step 2: Enter your credit or debit card details

You’ll now be given the option to open a PayPal account yourself and pay that way. However, if you don’t want to do that, you just select the credit or debit card option and enter the details for the card you wish to use.⁴

It’s worth remembering, however, that payments through PayPal using a credit or debit card are much more expensive than payments made using a PayPal account with balance or a linked bank account.¹ You can look at the table in the previous section to get more of an idea of the cost differences.

Step 3: Confirm the payment

Here you’ll get a final chance to review the payment and make sure everything’s in order. If it’s all as you want it, just click confirm and the payment will be processed. You’ll receive an emailed receipt of your payment for your records.⁴

If you need to make a payment — whether to pay back a friend who bought you dinner, or to cover a supplier invoice for your small business — you have choices. PayPal can be convenient for some transaction types, but there are fees to take into consideration.

And if you’re making an international payment, the costs can be pretty steep. Before you make your decision, it could save you money to check all the options available to you to make sure you’re not paying too much for your particular transaction.

You could consider using TransferWise as an alternative, and if you need to make international payment regularly opening a borderless multi-currency account for free could also be a good option for you.

Sources:

¹https://www.paypalobjects.com/digitalassets/c/website/marketing/na/us/ebooks/pdf/fees-page.pdf (June 11, 2018)

²https://www.paypalobjects.com/webstatic/ua/pdf/US/en_US/ua.pdf (June 11, 2018)

³https://www.paypal.com/us/webapps/mpp/paypal-fees#transfers (June 11, 2018)

⁴https://www.paypal.com/us/smarthelp/article/How-do-I-pay-for-a-payment-request-or-invoice-FAQ2206 (June 11 2018)

⁵https://www.paypal.com/us/smarthelp/article/how-do-i-send-money-faq1684 (June 11, 2018)

⁶https://www.paypal.com/sc/selfhelp/article/what-are-the-fees-for-paypal-accounts-faq690 (June 11, 2018)


This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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