How to Cut Down on Paypal Fees

I do a good amount of buying and selling online, and one of the primary ways I pay content writers, graphic designers (and pretty much anyone who does work for us) is via Paypal.  And probably 50% of the time I’m about to send money to someone, they’ll kindly ask me if I will send enough money to cover the Paypal fees that they will get hit with when receiving the money.  Usually, I don’t mind doing this – especially for someone that I want to continue buying services from.

Paypal charges nothing to send money – which makes sense, they want money flowing into the Paypal system unimpeded.  They typically only charge fees when you’re accepting payments.   I have to say, Paypal makes moving money around online a lot easier…but their fees, even when you do a good bit of volume with them, are pretty exorbitant.

Anyway, back to the point of this post.  The other day I was chatting with someone about a $1,050.00 payment I had just received via Paypal, and I was complaining about how I ended up paying $30.75 in fees.  He says, “That’s why I always pay using Mass Pay.”

I guess this is what I get for auto-archiving any Paypal-related email I receive that doesn’t involve money flowing into or out of my Paypal account.  Using this feature would have saved me (and the people I send money to) a great deal of money over the years.

How to Use Paypal’s Mass Payment Feature

Who can Use Mass Payments?

The qualification for using Paypal’s Mass payment feature are pretty minimal.

  • You must have a PayPal Premier account or Business account, and it must be verified.
  • You must have enough funds in your Paypal account to cover the cost of the transaction(s) you’re wanting to use Mass Payments for.

Advantages of Using Mass Payments

  • When sending money, Mass Payments lets you cover the fees for the recipient (assuming you want to do so) very cheaply.  Each Mass Payment you make costs you $1.00.
  • When receiving a Mass Payment, there are no fees.

Disadvantages of Using Mass Payments

  • It takes a little bit longer to send $$ to someone.

So, as long as you meet those qualifications, and want to do someone a solid and cover their fees…

Now all you need to do is to create a simple text file or CSV (Excel) file detailing the transaction(s) you’d like to make.  I now have a stock file that I have sitting on my desktop that I make changes to anytime I need to make a payment to someone that I want to cover the fees for.

The fields you need to provide (in this particular order) are:

  • Email Address of the person you’re wanting to send money to
  • Amount to send
  • Currency (USD, EUR, CAD, GBP, etc.)
  • Unique ID (optional field)
  • Custom Note to the Recipient (optional field)

That’s it.  Just save this file and upload it via the Make a Mass Payment section of the “Send Money” section of Paypal.  Once you upload the file, Paypal will analyze it, and give you an opportunity to confirm everything you entered into the file before sending the payments.

Had I known about this feature of Paypal… and had I written this blog post already, I would have kindly forwarded the URL to this post to the gentleman who sent me $1050 earlier this week, and kindly requested that he use Mass Payments to pay me $1049 instead of $1050. That way it wouldn’t cost him a dime extra (other than the 2-3 minutes it would take the read this post and create the file), and I would have saved nearly $30 in fees.


  1. Michael McMahon says:

    I noticed you have different currencies floating around in the spreadsheet. One thing to keep in mind, depending on if you are using PayPal’s Mass Pay API, is that they only allow one currency per an API call. Speaking of MP API, I’ve seen companies use this to automate how they issue transactions. It is simply too cumbersome to manage numerous vendor relationships, sales, etc if everything is manually executed. Anything that saves time/money is OK in my book.

    • Yea, Mass Payments are really designed for … making mass payments. If I ran an affiliate program of some sort, where I was sending out a large number of payments every month, I would certainly be using this feature to automate that process.

  2. Michael McMahon says:


    Well, one of the issues for affiliate marketers, particularly the interactive ad agencies paying their publishers, is mass payments when doing business internationally. Unless you build your payment/tracking system proactively from the ground up, you can run into an issue of having data silos where it’s tough reconcile publishers’ campaigns and issue funds in an efficient manner.

    Even if your running an enterprise level, scalable tracking platform such as DirectTrack, you can run into issues with paying on time. It’s much better to have online payment best practices established from the get-go when you’re managing many complex relationships.

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