PayPal Hikes Fees For Pay Later, Credit & Debit Card Payments & Virtual Terminal Transactions January 2025

PayPal's latest User Agreement update reveals increase to processing fees for PayPal Pay Later options, Alternative Payment Methods, Advanced Credit and Debit Card Payments, and Virtual Terminal transactions effective January 13, 2025.

The full policy update can be found on PayPal's legal hub, but here are the important highlights:

PayPal Pay Later options

Current rate: 3.49% + fixed fee

Updated rate: 4.99% + fixed fee

PayPal business accounts, when acting as sellers, will be charged a standard domestic rate of 4.99% plus a fixed fee per transaction when a buyer uses a PayPal Pay Later option to fund their purchase, including when the purchase occurs through PayPal’s Invoicing service.

If desired, PayPal business accounts can opt out of PayPal Pay Later option availability by logging in to their account with PayPal and going to the Pay Later section of their Account Settings.

If a PayPal business account holder chooses to opt out in this manner, PayPal Pay Later options will not be available to that account holder’s buyers at PayPal Checkout.

Alternative Payment Method(s)

Current rate: 2.59% + fixed fee Standard or 2.99% + fixed fee for APM through Pay Links and Buttons.

Update rate: 2.89% plus an updated fixed fee per transaction Standard, no chance for APM through Pay Links and Buttons.

The standard domestic rate for Alternative Payment Method (APM) transactions will be 2.89% plus an updated fixed fee per transaction.

At this time, there is no change to fees for APM transactions when the purchase occurs through PayPal’s Invoicing service or to fees for APM transactions through Pay Links and Buttons.

Advanced Credit and Debit Card Payments

Standard current rate: 2.59% + fixed fee

Standard updated rate: 2.89% plus an updated fixed fee per transaction

Charity current rate: 1.99% + fixed fee

Charity updated rate: 2.19% plus an updated fixed fee per transaction

The standard domestic rate for Advanced Credit and Debit Card Payment transactions will be 2.89% plus an updated fixed fee per transaction.

The domestic charity rate for Advanced Credit and Debit Card Payment transactions will be 2.19% plus an updated fixed fee per transaction.

At this time, there is no change to fees for Advanced Credit and Debit Card Payment transactions on the Interchange Plus Plus fee structure.

Virtual Terminal

Standard current rate: 2.39% + fixed fee

Standard updated rate: 3.39% plus an updated fixed fee

Charity current rate: 2.39% + fixed fee

Charity updated rate: 2.69% plus an updated fixed fee

The standard domestic rate for Virtual Terminal transactions will be 3.39% plus an updated fixed fee per transaction.

The domestic charity rate for Virtual Terminal transactions will be 2.69% plus an updated fixed fee per transaction.

Updated Fixed Fee charts and further details here.