PayPal.me? A guide to what you should know

TransferWise content team
06.13.18
8 minute read

With PayPal Me you can send a personalized link to friends, family members, or business customers to request a payment directly to your PayPal account.¹ It can be a handy way to share costs with local friends, for example — but you’ll find that PayPal imposes a charge for many transactions.

If you’re making payments to someone who has a PayPal account outside of the US, then the international PayPal fees can be especially steep. And it can get even more painful when you add in overseas business transactions with PayPal. In these cases, you’re likely better off if you choose an alternative to PayPal entirely — such as TransferWise. More on that later.

Here’s all you need to know about using PayPal.Me.

What is PayPal.Me and how does PayPal Me work?

PayPal Me launched in the US a few years back, and allows users with a PayPal account to create a customized link to send to friends, family, clients or customers, to request a payment.¹

It can be used both personally, and for your business. You might use this if you’re eating out with friends and want to pay back the person who covered the check, for example. Or, if you’re an entrepreneur or freelancer, you can use PayPal.Me to ask customers and clients to make a payment via PayPal.¹

You just create your personalized link and send it to whoever you want. You can either include a dollar amount you want to be paid, or leave it open — which could help, say if you’re collecting voluntary contributions towards a gift and everyone can give what they wish.²

There are costs involved in using PayPal Me for business, though. And you may also run into fees if you use it personally, especially if there’s any currency conversion or international payment involved. More on that later.

PayPal Me fees

It’s very important to know when you set up your PayPal Me link that the terms and conditions — and the costs — will vary depending on whether you’re using the link for personal or business use. If you try to avoid the business fees by classifying payments as personal when they’re actually for goods and services, then PayPal can still charge you the appropriate fees afterwards.³

Here’s how PayPal explain this in their terms and conditions. The use of capitals by PayPal shows that their lawyers likely thought this particular point was worth emphasizing:

YOU MAY NOT USE A PERSONAL PPM LINK TO RECEIVE PAYMENTS FOR COMMERCIAL PURPOSES, NOR MAY YOU USE A COMMERCIAL PPM LINK FOR PERSONAL TRANSACTIONS.³

Later, the terms cover the consequences of breaking the rules:

If PayPal determines, in its sole discretion, that you have received payments for goods and services on a Personal PPM Link, PayPal may retroactively charge you the appropriate fees and prospectively reclassify the PPM Link as Commercial.³

So, you’ll be charged business use fees if PayPal believes you’re taking business payments under the guise of personal ones. It’s also worth noting that if you have a PayPal Business Account, the assumption is that the PayPal Me link associated with that account will be for business purposes, and whenever you send a link and request money, it’ll be identified as commercial, and charged as such.³

Domestic PayPal.Me fees (friends and family)

To send money to friends and family in the US or Canada, you’ll pay the following:

PayPal Me Domestic fees⁴ Cost for friends and family
Paying by balance or linked bank account No fee
Paying by credit or debit card 2.9% of the total transaction amount + a fixed fee based on the currency being used

You can see where the fixed fees could apply by following the link in the source section.⁴

Domestic PayPal.Me fees (goods and services)

If you have a US PayPal account and are being paid by a customer who also has a US PayPal account, then the fee is:

2.9% of the transaction amount + a fixed fee based on the currency⁵

International PayPal.Me fees (friends and family)

To send money to friends and family outside of the US or Canada, you’ll pay the following:

PayPal Me International fees⁴ Cost for friends and family
Paying by balance or linked bank account Charged between 0.3 to 2% of the transaction amount, depending on the country involved
Paying by credit or debit card (partially or fully funded) Fee of 3.4 to 3.9% Plus an additional fixed fee depending on the currency or country involved
Currency conversion fee (added on top of the base exchange rate)⁶ 2.5 to 3% depending on the situation added on top of the base exchange rate4% if you’re a registered user in a “relevant country other than the UK or Ireland” added on top of the base exchange rate3 to 4% if you’re a “user registered in the UK or Ireland” added on top of the base exchange rate

About the currency conversion fee. PayPal adds this fee to the exchange rate they use when you make an international payment. This means that you won’t get the real exchange rate you see on Google.

Instead, PayPal takes an extra profit by adding a percentage charge on top of the rate used. They set a Base Exchange Rate⁷ for the relevant currency, and than add a conversion fee on top of that.

If you want to transfer money to your friends and family abroad, you could be better off if you choose a specialist in international money transfers, like TransferWise. You’ll be able to make a transfer using the real mid-market exchange rate, and with only a small, upfront fee to pay.

This could save you money — and the transparent fee structure and fair exchange rate means there aren’t hidden fees to worry about, either. And if you want to send money as a business you won’t be charged a higher fees. You’ll pay the same low, transparent fee.

International PayPal.Me fees (goods and services)

If you’re being paid by a customer or paying an international invoice of someone who has a PayPal account based outside of the US, the fees will be higher.

PayPal Me International fees Cost for goods and services
Basic fee5 4.4% of the transaction amountPlus
Fixed fee5 Based on the currency
Currency conversion fee (added on top of the base exchange rate)⁶ 2.5 if you’re paid in a different currency
International payment fee5 1.5% for an international payment
Paying by balance or linked bank account⁴ Charged between 0.3 to 2% of the transaction amount, depending on the country involved
Paying by credit or debit card (partially or fully funded)⁴ Fee of 3.4 to 3.9% Plus an additional fixed fee depending on the currency or country involved

These costs mount up — quickly. If you’re a business owner, freelancer, or entrepreneur and deal with clients who are based abroad, you could be much better off if you choose an alternative payment method to PayPal.

TransferWise charges the same for international transfers, whether they’re made for business or personal purposes. That can save your business a bundle. In fact, independent research found that you could save up to 9x on the same transaction if you use TransferWise to take payments for your business, rather than PayPal.

Need to send or receive money in multiple currencies or countries? TransferWise could help

Banks often charge hefty fees for foreign and multi-currency accounts. And if you’ve already tried managing multiple accounts in multiple countries, you know it’s rarely simple.

TransferWise could help. With TransferWise, it’s free to open a borderless multi-currency account with no monthly fees. There, you can manage and send dozens of different currencies all from the same account. All around the world. Likely, for a lot cheaper than your bank.

Is there seller protection when you use PayPal.Me? Is it safe?

PayPal offers both buyer and seller protections — however exactly how these apply depend a lot on the transaction in question. You can’t get seller protection on digital items for example, so if you’re a web developer, or sell any form of digital product, then you wouldn’t be eligible for this cover.⁸

To see whether your transactions are covered, you’ll need to check out the small print on the PayPal Me FAQ, and PayPal user agreement.⁸

How to use PayPal Me links

To get started with PayPal.Me, the first thing you have to do is create your own PayPal Me link. Here’s how to go about it.

How do you create a PayPal Me link?

You’ll need a PayPal account to create your PayPal Me link. If you don’t have one already, you can open a regular PayPal account and then take the following steps:

  • Go to the PayPal.Me webpage and click Create Your Payal.Me Link
  • Select a username — this is the name which will appear at the end of the link you share to get paid. If you can’t get the name you want because someone else has already signed up for it, you’ll need to choose a new one or select one of the ones PayPal automatically suggests⁷
  • Click Grab this link — and it’s all yours
  • You can now follow the steps to personalize and then activate the link. You can add a profile picture and change the colours of the background for example, to that your friends or customers can easily see that it’s your link when they come to pay

Can you change a PayPal.Me link?

At present it’s not possible to change your PayPal Me username, so choose wisely. You can not delete your link either once it’s created, although you can hide it from public view if you want to stop using it.²

PayPal Me can be a handy way to pay friends or family members for personal and shared expenses. However, if you’re making a payment — even domestically in the US — with a credit or debit card, there are fees to pay. And if the payment is international, or made for business purposes these charges can mount up very quickly.

If you’re looking for international money transfers without the costs involved with PayPal, you could be significantly better off if you use a specialist like TransferWise. Check out TransferWise today, and see what you could save.

Sources

  1. https://www.paypal.me/ (June 13, 2018)
  2. https://www.paypal.com/paypalme/pages/faqs (June 13, 2018)
  3. https://www.paypal.com/us/webapps/mpp/ua/paypalme-tnc (June 13, 2018)
  4. https://www.paypalobjects.com/digitalassets/c/website/marketing/na/us/ebooks/pdf/fees-page.pdf (June 13, 2018)
  5. https://www.paypal.com/us/webapps/mpp/merchant-fees?locale.x=en_US#standard-transaction-fees (June 13, 2018)
  6. https://www.paypal.com/ee/webapps/mpp/ua/useragreement-full#r017 (June 13, 2018)
  7. https://www.paypal.com/ee/webapps/mpp/ua/useragreement-full#r08 (June 13, 2018)
  8. https://www.paypal.com/us/webapps/mpp/security/seller-protection (June 13, 2018)
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