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

Source: Helium.com

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.

Recommendations:

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