Is PayPal The Easiest, Cheapest Way For Your Non-NZ Customers To Pay You Into Your New Zealand Bank Account?

I’m hoping that this article will save you the 45 minutes of research I just had to do.

  • Do you have clients or customers based outside of New Zealand?
  • Do you want to know the easiest, cheapest way for those non-NZ customers to pay you into your New Zealand bank account?

That’s exactly what I wanted to find out.

I found many options, most of which I’d never heard of.  But one brand kept coming up again and again: PayPal.

I found lots of criticisms, but it is probably the #1 payment service in the world, so let’s just go with that.

But I’m worried my profit will be whittled away with fees.

My next mission was to find out what fees will I be charged:

  1. For the transaction?
  2. For currency conversion from US dollars to NZ dollars?
  3. For withdrawing the funds from my PayPal account into my New Zealand bank account?
  4. For receiving the funds into my New Zealand bank account? Will my NZ bank charge me?

You’d think I’d easily find the answers to these questions on PayPal’s website. Sadly, no, that is not the case.

1. What fees will I be charged for the transaction?

  • 3.4% + $0.30 USD

Source: PayPal Website

2. What fees will I be charged for currency conversion from US dollars to NZ dollars?

  • 2.5%

Source: PayPal Website

3. What fees will I be charged for withdrawing the funds from my PayPal account into my New Zealand bank account?

  • $1.00 for amounts below NZ$150
  • Free for amounts above NZ$150


4. What fees will my bank charge me for receiving the funds into my New Zealand bank account?

  • Zero. (I’m guessing. If I’m wrong, please correct me in the comments below)
  • But it can take 6 – 8 days to arrive

Example #1: US$100 transaction

  1. Transaction Fee: 3.4% x US$100 = US$3.40 + US$0.30
  2. Currency Conversion: 2.5 % x US$100 = US$2.50
  3. Withdrawal Fee: US$1.00 because US$100 = NZ$135 which is below the NZ$150 threshold
  4. Total PayPal Fees: US$7.20 = NZ$9.80 (which is a whopping 10% of the clients invoice!)

Example #2: US$200 transaction

  1. Transaction Fee: 3.4% x US$200 = US$6.80 + US$0.30
  2. Currency Conversion: 2.5 % x US$200 = US$5.00
  3. Withdrawal Fee: Free because US$200 = NZ$270 which is over the NZ$150 threshold
  4. Total PayPal Fees: US$12.10 = NZ$16.47 (which is 8.2% of the clients invoice)

Here’s a cool world currency calculator if you want to do your own calculations.


  • Wait until you have more than NZ$150 in your PayPal account before you withdraw the funds into your New Zealand bank account

14 Replies to “Is PayPal The Easiest, Cheapest Way For Your Non-NZ Customers To Pay You Into Your New Zealand Bank Account?”

  1. You have an error in this post. Currency conversion is 2.5% over exchange rate. It is not specified separately in your ‘statement’, the exchange rate given includes PayPal’s 2.5% cut.

    PayPal does not give a rat’s rear end if they are expensive, risky and inconvenient for you, the merchant. They do not really think of small merchants (below enterprise level) as customers. The buyer, he/she who makes the payment is their customer. In that regard PayPal is indeed the ‘easiest cheapest way to pay’.

  2. Great article.
    I have used Paypal for several years now.
    One of my earlier commercial websites (2002, 2003?) used world pay. -That was expensive!

    Although to be fair I guess it is a matter of volume. For low volume and speed of set up I would go with Paypal. But if I had a business doing serious volumes it may pay to look around.
    Also if the business was my main source of income I would probably use more than one payment processer (e.g. one product through each), so that if one does get funny, I can switch everything to another.
    This does happen I had dinner with a guy who did a big launch, the payment processor thought it was dodgy that all this money came in and froze half his account for 6 months. He had to pay out affiliates with the half he got and waited 6 months for his money…

  3. Paypal is always a tricky subject. There are a lot of stories where people have lost large amounts of money to this business. Paypal is not a bank or finance company and does not run under the same rules as such organizations, which a lot of people confuse it with in certain situations. I would also not recommend to keep large amounts of money on a PayPal or to complete important transactions through this website. It is worth looking online for another alternative or if possible using the good old fashioned direct bank deposit or cheque payment options, just my 2 cents.

  4. We’ve used Paypal here in New Zealand and in Australia and it’s been a much cheaper option for us than merchant banking.

    – Once you withdraw the money from your account to your bank account you can’t refund the client via credit card and claim back their fees (which can add up – esp. on large transactions)
    – Australia has some odd money anti-laundering laws, and paypal turned into a faceless monster and we couldn’t trade with paypal for about a month while we proved to them that we are, in fact, nice law-and-tax-abiding people. That won’t affect kiwis who only have a nz-based paypal account.
    – Don’t bother emailing them. Ever. You’d have better luck to throw a bottle into the ocean then get through to any intelligent human via email. They’re actually quite helpful if you phone them and talk to them on the phone though.

    Hope that helps!
    Glen – Partybands & Bandaroo.

    1. I use PayPal for one of my clients for overseas visitors coming to stay it is the easiest and we don’t have a large volume maybe $3k for a whole year. I had a situation last year due to weather conditions that I had to refund people I had no problems just did it through the website. On reading all the above information I think I will charge a $5 say conversion fee on all payments to cover the costs and we should come out even because most of ours are $100 or less…

  5. PayPal vs another provider (such as Payment Express/DPS, or WorldPay/ varies on a number of factors:

    1. Currency
    Payment Express basically can only us either a US bank or BNZ Multi-currency account (Buyline I think). This basically means if you want foreign currencies you’ll need to use PayPal, or register a company in the US (fine if you have a green card, not so fine if you’re an offshore company). Same applies for other currencies. BNZ’s offering converts currency XYZ into NZD daily, so you’re at the mercy of their exchange rates (i.e. you can’t bank USD for a rainy day).

    2. Integration
    We’ve done both, and ended up writing an inter-changeable library for our online store. This meant we could easily convert a customer between offerings without a complete re-write. PayPay is (generally speaking) a bit of a dog (lots of steps involved), Payment Express is a walk in a park. Of course if you use HTTPS rather than the hosted solutions it’s a bit different, but expect extra for dedicated IP address and SSL certificates.

    3. Volume
    If you’re running through large transaction volumes/values other providers work out loads better. It also makes a massive difference with merchant accounts if you’re already using EFTPOS terminals for example. The other helpful point is NEGOTIATION; if you’re a long time customer of a bank, and you do a load of transactions you CAN negotiate their rates (I know a number of clients who have some very favourable rates), PayPal won’t budge ;).

    I hope that helps someone. Basically it depends on many aspects, and it’s certainly not a case of one-size-fits-all.

  6. I can not beleive that Paypal are still in business at all! I set up a an account to receive donations for a personal fundrasier. Easy as 1, 2, 3. Donations began coming in and luckily I withdrew it to a real bank account quickly because a few weeks later Paypal decided that they could not support donations of this kind. Full Stop! The account is now “limited” (unable to receive or withdraw). All of my emails and phone calls to Paypal result in a reply stating “Your appeal is denied”. Luckily only a small amount of money was in the account when they “limited” it. As far as I can determine any Paypal donations to anything but a registered charity could result in the account being limited in this way. I now have to wait 180 at which time Paypal will tell me how I can remove my funds. It is impossible to get anyone at Paypal to actually answer the questions that I ask them because, hey, my “appeal has beenm denied”. I wonder why they let me set up the account in the first place? I did not try to hide anything. This method of operation is apparently standard practice for Paypal – wish I had done my home-work better before using it. There are plenty of examples of this happening to others sometimes to sums of thousands of dollars. Before usiing Paypal check out

  7. Hi, all of our clients and suppliers are overseas and the payments both ways are in USD. Can you have a USD account with Paypal even if the Paypal account is set up in New Zealand?

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