If PayPal fees feel high on your invoices and online sales, the fix is rarely one switch. It is a short comparison: the rate, the fixed fee per payment, any invoice fee, dispute fees, payout timing and holds, run against your own last three months of sales. This guide shows what to compare, how pass-through pricing changes the math in our study’s model (19% to 31% lower for online and invoice sales), and when staying with PayPal is the right call. We state no PayPal fee here, because we could not read PayPal’s fee page. Read it yourself before you compare.
The short answer
- Add up every line, not just the headline rate. Rate, fixed fee per payment, invoice fee, dispute fee, payout timing and holds all change what a sale really costs.
- Read PayPal’s own business fees page. As of November 13, 2026 we could not read its figures (the page blocked our automated request), so this guide quotes none. Prices change and accounts differ, so use the figures on PayPal’s page and in your own account.
- Pass-through pricing is a different model. In our study, it costs 19% to 31% less than flat rate for online and invoice sales across $15 to $2,500 tickets. That is a model, not a promise.
- Staying can be right. A few payments a month, or customers who want to pay from a PayPal balance, can outweigh a fee gap.
- Get a written quote. NPS offers a free statement review, and we are not neutral, so compare us line by line too.
Why the PayPal bill can feel higher than the headline
Most processors advertise one number. The bill is built from several. A percentage of each sale is the largest piece. A fixed amount on every payment matters most on small sales. Some products add a charge for invoicing or for keyed-in cards. Disputes carry their own fees. And then there are timing costs that never appear as a fee: money that arrives days later, or funds held while an account is reviewed.
That is why two businesses on the same processor can feel very different things. A shop with many small online orders feels the fixed fee. A contractor sending a few large invoices feels the percentage. A business with frequent disputes feels the dispute line. Before you decide anything is too high, find out which of these is yours.
We checked PayPal’s US business fees page on November 13, 2026 to quote it here. The page returned an access-denied response to our automated request and showed only a notice asking for JavaScript, so we read no figure from it. Rather than copy a number from memory or from a third-party site, which may be out of date, we leave PayPal’s numbers to PayPal’s own page. Open it, write down what it lists for the ways you actually get paid, and use those figures in the comparison below.
What to compare, one line at a time
1. The rate
The percentage taken from each sale. Check whether it differs by how the customer pays: a card entered on your site, a payment link, an emailed invoice, or a balance. Write down the rate for each way you really get paid, not just the lowest one.
2. The fixed fee per payment
A flat amount added to every payment. On a $20 sale it is a large share. On a $2,000 invoice it barely registers. Multiply it by your number of payments per month to see the real size.
3. The invoice fee
Ask whether sending an invoice or a payment link adds anything beyond the normal rate. Some tools charge a percentage per paid invoice, some charge nothing extra. For a business that bills by invoice this line can be the difference.
4. Dispute fees
A dispute, also called a chargeback, is when a customer asks their card issuer to reverse a payment. Ask what each dispute costs, whether you pay again to respond, and whether the fee comes back if you win.
5. Payout timing
How many days pass between the sale and the money in your bank account, and whether faster payouts cost extra. If you pay suppliers on a schedule, a day or two of delay has a real cost to your cash flow.
6. Reserves and holds
Ask under what conditions funds can be held and for how long. Get the policy in writing, not from a sales call.
7. Everything else
Monthly fees, gateway fees, statement fees, PCI fees, cross-border charges, currency conversion and cancellation terms. Our guide on how to read your merchant statement shows where each of these appears.
Do the math on your own month (our arithmetic)
Take one real month. Write down the number of payments and the total dollars collected, split by how customers paid: invoice, online checkout, payment link, keyed in by phone. Then fill in the fee lines for each processor you are comparing, using each processor’s own published page or a written quote.
Here is the method with made-up inputs. It is made-up math to show the method, not a promise and not a PayPal figure. Say a business collects $15,000 a month through 100 invoices of $150. If a processor charged a rate of 3.0% and a fixed 30 cents per payment, the monthly fee would be $450 for the rate plus $30 for the fixed fee, so $480, or $5,760 a year. If another charged 2.5% and 10 cents, it would be $375 plus $10, so $385, or $4,620 a year. The gap is $1,140 a year on those invented inputs. Swap in the real figures from each fee page and the method works the same way.
Do the same for disputes. If you had two disputes last year and the fee per dispute is a small amount, it hardly matters. If you had twenty, it is a line worth pricing. And put a rough dollar value on payout timing if you borrow against cash flow.
For a wider view across providers, see how much you are really paying on Stripe, Square, PayPal or QuickBooks.
The pass-through idea, in plain words
A card payment has three parts. The biggest is interchange, a fee set by the card networks and paid to the bank that issued the customer’s card. Then come card network assessments. Then the processor’s own markup. A flat-rate processor bundles all three into one price. You cannot see which part is which, and the price is the same for a cheap debit card and an expensive rewards card.
Pass-through pricing, also called interchange-plus, separates them. You pay the real interchange and network fees for each card, plus one markup written in your agreement. Interchange varies by card type. Business and commercial cards can cost more, and Level 2 and Level 3 data on a transaction can lower them. Our post where Stripe fees actually go shows the split with an example.
Debit is where the difference often shows up. Debit cards from large banks have a capped interchange of 0.05% of the sale plus 21 cents, with a 1 cent fraud adjustment. A flat-rate price charges its full percentage on those cards anyway. But the cap does not apply to debit cards from small banks, which cost more, so do not assume your debit cards are all cheap. We explain it in whether the debit cap applies to small-bank cards.
What our study found for online and invoice sales
The study is called “The Flat-Rate Tax” (2026 Edition) and was written by Allen Kopelman, the CEO of NPS. Read it here: NPS’s 2026 pricing study. It is a model built from published rate schedules, not a survey, and NPS sells pass-through pricing, so we are not neutral.
The model finds that interchange pass-through costs 19% to 31% less than flat rate for online and invoice sales across average tickets from $15 to $2,500. Its worked example: a business collecting $50,000 a month in invoices at a $150 average ticket keeps about $6,100 a year.
Treat that as a reason to ask for a quote, not as your result. The study does not know your card mix. A business whose customers mostly pay with company credit cards can see a smaller gap, because business and commercial cards can cost more. A business with mostly consumer debit from large banks can see a larger one. Flat rate can still win for very small tickets and for brand-new, very low-volume businesses.
For service businesses that bill by invoice, our post on cheapest card processing for invoices and payment links applies the same idea. For online stores, see cheaper alternatives to Shopify Payments for a growing online store.
When staying with PayPal makes sense
Do not leave a tool that works because a fee looks high on paper. Staying can be the better choice when:
- You take only a few payments a month. The yearly gap may be small, and a move costs time.
- Many of your customers want to pay from a PayPal balance and would not complete a card payment instead. A lost sale costs more than a fee.
- You are brand new with very low volume. The study itself says flat rate can win here.
- Your accounting or store setup is built around PayPal and the time saved by keeping one system is worth more than the difference.
- You cannot get a written quote that beats your current total after every fee is counted.
A middle path also works. Many businesses keep a PayPal button for customers who want it and add a second way to pay for everyone else. Then you can see over a few months which one costs less and which one customers use.
A second made-up example: fewer, larger invoices (our arithmetic)
Here is more made-up math to show the method. It is not a promise and not a PayPal figure. Say a business sends 40 invoices a month of $400 each, so it collects $16,000. Suppose Processor A charged 3.2% plus 30 cents per payment, and Processor B charged 2.6% plus 20 cents. Both are invented. Processor A would cost $512 for the rate plus $12 for the fixed fee, so $524 a month. Processor B would cost $416 plus $8, so $424 a month. The gap is $100 a month, or $1,200 a year.
Notice which part did the work. The fixed fee differed by only $4 a month, because there are only 40 payments. The rate difference did almost all of it. For a business with a few large invoices, the percentage matters most. For a business with hundreds of small online orders, the fixed fee matters more. Use your own payment count and average ticket to see which one you are.
How to test a new processor without a big risk
You do not have to move everything at once. A small trial tells you more than any fee page.
- Keep your current setup running. Do not close anything until the new one has proved itself.
- Send a few real invoices through the new option. Pick customers who are happy to try it, and tell them what to expect.
- Write down what each payment really cost. Compare the fees on the statement with the quote you were given.
- Note the payout date. Count the days from the sale to the money in your bank account.
- Ask a customer how it felt. If paying was confusing, a lower fee may not be worth it.
- Decide after a full month, not a week. One month shows fees, payout timing and any problems with a dispute or a hold.
If the trial goes well, move more of your payments over a little at a time. If it does not, you have lost very little and kept your old way to get paid.
Questions to ask any processor before you move
- What is the markup over interchange, in writing, and is it fixed?
- Is there any fee just for sending an invoice or a payment link?
- What do keyed or card-on-file payments cost?
- What are the dispute fees, and are they refunded if I win?
- When does money reach my bank account, and do faster payouts cost extra?
- Under what conditions can funds be held, and for how long?
- Are there monthly, gateway, statement or PCI fees, or a contract term?
- Can I see a sample statement with each fee on its own line?
If an answer is “it depends,” ask on what. A clear answer lets you do the arithmetic yourself. For the full cost picture, see cheapest payment processing in 2026.
You can also run your own invoice and online sales numbers through our savings calculator.
If you are comparing more than two providers, our guide to the best payment processors for 2026 sets ten of them side by side by business type.
Who wrote this, and where NPS fits
Nationwide Payment Systems (NPS) publishes this guide. We are a payments company based in Fort Lauderdale, Florida, in business since 2001, and we sell merchant accounts and invoicing software, so we are not neutral. We offer interchange pass-through pricing, ACH, a payment gateway and Smart Invoicing, and we also offer flat-rate options. We do not publish a price list. The study we cite was written by our CEO. NPS offers a free statement review. Browse more in our payments guides.
We are not the right fit for every business. If you take only a few payments a month, or your customers mostly pay from a PayPal balance, staying put may cost you less.
Bottom line
A PayPal alternative with lower fees is worth pursuing when your yearly fee total is a real number and your customers pay by card. Read PayPal’s own business fees page for today’s figures, put every line next to a written quote, and run one real month through both. In our study’s model, pass-through pricing costs 19% to 31% less than flat rate for online and invoice sales, and it may not for your mix. If you would like a second opinion, you can contact our team.
Frequently asked questions
Why do PayPal fees feel high for invoices?
Usually because several charges stack: a percentage, a fixed amount per payment, and sometimes an extra line for invoices, manual entry or disputes. We cannot read PayPal’s fee page automatically, so we state no PayPal figure here. Read PayPal’s own business fees page for today’s numbers, then add up every line that applies to how you get paid.
What should I compare when I look for a PayPal alternative?
Compare the rate, the fixed fee per payment, any invoice fee, dispute fees, payout timing, and holds on funds. Put each processor’s numbers side by side for the same sample month of your own sales, and ask for every fee in writing.
What is pass-through pricing?
Pass-through, also called interchange-plus, means you pay the real card network and bank fees for each card, plus one markup written in your agreement. A flat-rate processor bundles all of it into one headline price.
How much cheaper is pass-through than flat rate?
In our study’s model, 19% to 31% less for online and invoice sales across average tickets from $15 to $2,500. It is a model built from published rate schedules by a processor that sells pass-through, not a survey, so test it against your own statement.
Can you give an example in dollars?
The study’s example: a business collecting $50,000 a month in invoices at a $150 average ticket keeps about $6,100 a year in the model. Your result depends on your card mix, so ask for a quote rather than relying on the example.
When does it make sense to stay with PayPal?
When you take only a few payments a month, when your customers insist on paying with their PayPal balance, or when the convenience of one familiar checkout is worth more to you than the fee difference. Switching only pays if the yearly gap is a real number.
Does NPS review my current statement for free?
Yes. NPS offers a free statement review.
