How Does PayPal Make Money? (All You Need to Know)

PayPal is a multinational e-commerce business that offers a variety of functions, and also owns many companies.

However, if you use PayPal often, you may wonder how PayPal makes so much money when it doesn’t charge you to create an account? Well, I did the research, and here is what I found!

How Does PayPal Make Money In 2024?

PayPal makes money by charging its consumers fees on its platforms in 2024. If you buy an item from a merchant, PayPal will charge that merchant a transaction fee. Furthermore, if you are sending money to friends and family, you do not have to pay any fees unless you use a credit or debit card.

If you use PayPal a lot, and want to know what fees you are paying, when you are paying them, and more, keep reading for more useful facts!

Is There a Fee to Use PayPal?

Fortunately, it’s free to sign up and create an account with PayPal. However, there are fees when using some functions on PayPal.

When buying items through PayPal, the seller must pay the PayPal fee, while the buyer is not forced to pay any fees.

However, when sending money to friends and family, the person sending the money has to pay the fee, unless they choose to pass the fees on to the recipient.

Note that you only have to pay this fee if you are using a credit or debit card.

Here is a list of some of the things PayPal’s charges fees on:

  • Sending Personal Payments:

There are no fees to send money using only your bank account, PayPal balance, or a combination of both. However, there is a fee if using a credit or debit card.

  • Receiving Personal Payment:

There are no fees to receive money if it’s sent using only a PayPal balance, bank account, or a combination of both.

Unfortunately, however, there are fees if funds are sent through a credit or debit card.

  • Purchasing Goods or Services:

There are no fees to purchase a good or service using PayPal. However, there is a fee for each transaction related to goods and services as a seller.

  • International Payments:

There are fees to send money to someone or to receive money from someone in another country.

  • Withdrawing Money:

There is no fee to withdraw money to your bank account from your PayPal balance. However, there will be a fee if you would like to receive a check from your PayPal balance instead. 

(Here is an overview and the amounts of all of PayPal’s Merchant Fees and Consumer Fees).

How Does PayPal Make Money From Venmo, PayPal Pay in 4, Cryptocurrency, and PayPal Credit?

How Does PayPal Make Money From Venmo, PayPal Pay in 4, Cryptocurrency, and PayPal Credit?

  • Venmo:

PayPal makes money from Venmo through Venmo’s fees.

Venmo has fees on things like instant transfers, withdrawals, etc. However, Venmo does not have that many fees, and therefore actually doesn’t generate that much of a profit.

(Here is an explanation and list of Venmo’s fees and Venmo’s business profile fees).

  • PayPal Pay in 4:

PayPal Pay in 4 is an interest-free installment plan with no additional cost to its consumers on the platform. However, it charges transaction fees to merchants.

Additionally, PayPal Pay in 4 may charge you, the buyer, a late fee if you are late with a payment (here is an overview of the Merchant fees).

  • Cryptocurrency:

PayPal makes money off of Cryptocurrency when you buy and sell Crypto Assets.

PayPal will charge a margin between the market price PayPal receives from its trading Service Provider and the exchange rate between USD and Crypto Assets displayed to you.

PayPal charges a margin on every Crypto Asset transaction, even sales to Checkout with Crypto. Additionally, you will be charged a fee for buying or selling crypto assets.

Here is information on PayPal’s fees and pricing. Additionally, to learn more about how to use Crypto, click here.

  • PayPal Credit:

PayPal makes money through PayPal credit by charging a monthly payment on your PayPal balance of everything you spend, using the PayPal card during that month.

PayPal asks that you pay the minimum payment at the end of each month.

You can also make payments of any amount whenever you would like, or pay the balance in full at any time, like a credit card.

(Here are the directions for how to make payments on your PayPal Credit balance, and here is more information about PayPal Credit).

To find out more, you can also read our posts on how long do PayPal refunds take, why is PayPal so expensive, and if PayPal is a bank.


PayPal has several companies under its wing, in what is called the “PayPal Family,” the method through which PayPal makes its money. PayPal makes money by charging its consumers fees on all its platforms.

PayPal only charges its buyers for late fees, such as on PayPal Pay in 4, to send personal payments using a credit or debit card, or to send or receive money internationally.

Photo of author

Marques Thomas

Marques Thomas graduated with a MBA in 2011. Since then, Marques has worked in the retail and consumer service industry as a manager, advisor, and marketer. Marques is also the head writer and founder of

Leave a Comment