What Are PayPal's Goods & Services Fees? (And When You Pay 2.29% vs 3.49%)
PayPal Goods & Services (G&S) isn't a single rate — US merchants pay one of three tiers depending on how the buyer checks out: standard card, PayPal Checkout, or QR Code. The gap between the cheapest and most expensive tier is meaningful over volume, and F&F is not a safe workaround.
What Counts as a PayPal Goods & Services Transaction?
PayPal Goods & Services (G&S) is PayPal's classification for commercial transactions — any payment sent to a business account, to a merchant, or marked as payment for a product or service. G&S is the opposite of Friends & Family (F&F); PayPal will automatically reclassify an F&F payment as G&S when it detects a business recipient or commercial pattern. The G&S rate you pay is not a single number: it depends on how the buyer pays and the integration the seller uses. US merchants face three tiers — standard card, PayPal Checkout button, and QR code — each with its own percentage and fixed fee.
When This Applies
- ✓ Etsy, eBay, and Shopify sellers receiving payment for goods or services
- ✓ SaaS companies collecting subscription revenue through PayPal Checkout or Stripe-style API integration
- ✓ Freelancers invoicing clients for design, development, or consulting work
- ✓ Small businesses taking in-person payments with PayPal Here / Zettle QR code
When This Does NOT Apply
- ✗ Genuine personal transfers between friends or family members — Friends & Family is free in the US but loses seller protection
- ✗ Pure cash transactions outside of PayPal — G&S only applies to payments processed through PayPal rails
- ✗ Platforms that explicitly forbid G&S routing via third-party checkout (check platform terms)
PayPal G&S Fee Calculator
Enter an amount to calculate the exact fee under each G&S tier. Switch rate type to compare what a standard card, PayPal Checkout button, and QR code transaction actually cost on the same amount.
Transaction Type
Current PayPal US Rates
Official| Type | Rate | Fixed |
|---|---|---|
| Standard Card | 2.99% | $0.49 |
| PayPal Checkout | 3.49% | $0.49 |
| QR Code | 2.29% | $0.09 |
Last verified: 2026-04-08 · Source
Use reverse calculation to determine what to charge so you receive the exact amount you need after fees.
PayPal Fee Structure
Standard Card
2.99% + $ 0.49
Applies to API integrations, Hosted Checkout, or any flow where the buyer enters a credit or debit card directly. This is the baseline G&S tier most merchants see.
PayPal Checkout
3.49% + $ 0.49
Applies when the seller embeds the branded PayPal Checkout button and the buyer logs into PayPal (or uses Pay Later / Venmo). Includes PayPal's buyer protection bundle.
QR Code
2.29% + $ 0.09
Applies to in-person scan-to-pay transactions via PayPal Zettle or the PayPal app QR reader. Lowest percentage and smallest fixed fee — ideal for low-ticket retail.
Rates last verified on 2026-04-08. Source: PayPal official pricing .
How Fees Are Triggered
- 1 PayPal G&S is a rate matrix — not a single rate. US merchants pay different amounts depending on how the buyer completes the payment: standard card, PayPal Checkout button, or QR code.
- 2 Determination order: (1) Is the recipient a business account? If yes, G&S applies even if the buyer selected F&F. (2) How is the transaction initiated — API / Hosted Checkout, embedded PayPal button, or QR reader? (3) Is the buyer located outside the merchant's country (UK only has an international surcharge; US G&S has no cross-border add-on layer).
- 3 Standard card applies to API integrations, Hosted Checkout pages, or any flow where the buyer enters a card directly. This is the baseline G&S tier for the US.
- 4 PayPal Checkout applies when the seller embeds the branded PayPal button. The buyer logs into PayPal (or uses the Pay Later / Venmo flow). This tier is about 0.5 percentage points more expensive than standard card.
- 5 QR Code applies to in-person payments via PayPal Zettle, the PayPal app QR reader, or a printed QR code at a market stall. This tier has the lowest percentage and a much smaller fixed fee.
- 6 Fixed fees also change between tiers — the standard card and PayPal Checkout tiers use one fixed fee, and the QR code tier uses a smaller one. For small-ticket items, the fixed-fee difference matters more than the percentage difference.
Common Misconceptions
Myth: Friends & Family is a way to save on PayPal G&S fees.
Reality: F&F is free in the US only for genuine personal transfers. Using F&F for a commercial payment voids PayPal's Seller Protection (including the 180-day dispute window), can trigger account limitations if PayPal detects commercial activity, and still leaves you responsible for 1099-K reporting on the income. Marketplaces like Etsy and eBay explicitly forbid F&F and will suspend sellers who use it.
Myth: All PayPal commercial payments cost the same rate.
Reality: PayPal G&S is a tiered rate matrix. The tier depends on how your customer pays — API card entry, the PayPal Checkout button, or a QR code. A SaaS seller who embeds the PayPal button pays noticeably more than one integrating via direct card API for the same transaction.
Myth: Cross-border PayPal G&S works the same way in the US as in the UK.
Reality: US G&S does not add a separate cross-border surcharge for the standard card tier — a US merchant pays the same rate whether the buyer is domestic or international. UK G&S, by contrast, has two distinct international tiers (EEA and Other) with their own percentage rates. Do not assume the US and UK pricing models mirror each other.
Example Fee Calculations
| Amount | Standard Card | PayPal Checkout | QR Code | |||
|---|---|---|---|---|---|---|
| Fee | You Receive | Fee | You Receive | Fee | You Receive | |
| $8.00 | $0.73 | $7.27 | $0.77 | $7.23 | $0.27 | $7.73 |
| $29.00 | $1.36 | $27.64 | $1.50 | $27.50 | $0.75 | $28.25 |
| $50.00 | $1.99 | $48.01 | $2.24 | $47.76 | $1.24 | $48.76 |
| $100.00 | $3.48 | $96.52 | $3.98 | $96.02 | $2.38 | $97.62 |
| $500.00 | $15.44 | $484.56 | $17.94 | $482.06 | $11.54 | $488.46 |
| $1,000.00 | $30.39 | $969.61 | $35.39 | $964.61 | $22.99 | $977.01 |
All amounts in USD. Fees calculated using current PayPal rates.
How PayPal G&S Fee Tiers Work
PayPal Goods & Services is best understood as a rate matrix keyed to integration method. US merchants have three tiers: standard card (for API / Hosted Checkout flows), PayPal Checkout (for sites that embed the branded PayPal button), and QR Code (for in-person scan-to-pay). The tier is set by the checkout path the buyer takes, not by anything the merchant can change per-transaction. Choosing your integration therefore locks in the base rate for every G&S payment that flows through it.
The PayPal Checkout tier is higher than the standard card tier by roughly half a percentage point. For a SaaS company running 1,000 subscriptions at $29 each, switching from the embedded PayPal button to a direct card API integration can save a meaningful amount per month — and the savings scale linearly with transaction volume. Some merchants run both: the PayPal button as a conversion-rate helper for buyers who prefer PayPal, and direct card API for everyone else.
The QR code tier has the lowest percentage and the smallest fixed fee. For low-ticket in-person sales (coffee stands, market stalls, small craft items) the fixed-fee difference matters more than the percentage. A coffee stand selling a drink pays far less under QR than it would under a card-not-present rate — not because of the percentage, but because the fixed fee is a fraction of the other tiers'.
Friends & Family lives outside this matrix. F&F is free between personal accounts in the US, but PayPal treats any recipient that looks like a business (active business account, patterns of repeated commercial payments) as G&S regardless of how the buyer labeled the payment. F&F also strips Seller Protection and the 180-day dispute window, so the apparent savings almost always cost more over time than the G&S fee would have.
Frequently Asked Questions
Why does PayPal charge different rates for Goods & Services transactions?
PayPal G&S is a tiered rate matrix, not a single rate. The tier is determined by how the buyer completes the payment — directly entering card details (standard card tier), clicking the PayPal Checkout button (PayPal Checkout tier), or scanning a QR code in person (QR code tier). Each tier has its own percentage and fixed fee. Stripe, Square, and most other processors do not segment commercial payments this way; this matrix is specific to how PayPal structures its products.
What happens if I receive a Friends & Family payment for a business transaction?
PayPal will reclassify the payment as G&S and charge the corresponding rate — you do not keep the payment fee-free. PayPal's fraud and AML systems look for patterns suggesting commercial activity (repeat payments to the same account, business account characteristics, platform metadata) and adjust classification at the processing layer. Even if a single F&F payment slips through, using F&F for commercial payments forfeits Seller Protection and the 180-day dispute window, and many marketplaces treat it as a terms violation.
Does PayPal Checkout cost more than direct card processing?
Yes. PayPal Checkout (the embedded branded button) sits about half a percentage point above the standard card tier. The trade-off is that the PayPal button can lift conversion rate among buyers who prefer paying through PayPal. Many sellers run both — the button for users who want it, direct card API as the default — to balance conversion lift against per-transaction cost.
How do I switch from PayPal Checkout to standard card API to lower my G&S fees?
The tier is set by the checkout path your buyers take, so the switch is an integration change rather than a setting toggle. On platforms like Shopify or WooCommerce, this means installing or configuring a card-on-file / direct-card plugin instead of (or alongside) the PayPal Checkout button. For custom sites, it means adopting PayPal's Advanced Credit & Debit Cards API or switching to a PSP that front-ends cards directly. Every buyer who flows through the new path will be charged the standard card G&S tier going forward.
Do PayPal G&S fees include Seller Protection automatically?
Yes — G&S transactions are covered by PayPal's Seller Protection policy as long as the transaction meets program rules (eligible item categories, proof of delivery, acceptable payment method). Seller Protection gives you coverage for chargebacks, reversals, and certain unauthorized-transaction claims for up to 180 days. Friends & Family payments are explicitly excluded from Seller Protection, which is one of the main reasons PayPal classifies commercial payments as G&S even when a buyer tries to mark them otherwise.
See also: related PayPal scenarios
Data Source & Transparency
All fee rates on this page are sourced from paypal.com merchant fees and were last verified on 2026-04-08. PayPal may change rates without notice — verify current pricing on the official page before making business decisions. Friends & Family is outside the G&S rate matrix and has different rules; see the misconceptions section above.
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