Complete PayPal invoice guide: Set-up, costs, security

PayPal invoicing can be a quick and easy way to issue invoices, and receive payments from customers. However, this service comes at a cost - especially if you work in a global marketplace.

This handy PayPal invoice guide will help you get started and cover the costs involved.

You can also create and send your invoices by using our downloadable free invoice templates or invoice generator.

How does PayPal invoice work?

A PayPal invoice is a customizable payment request you send to a client or customer. It's designed for merchants — selling goods or services — and includes full details like item descriptions, quantities, amounts, and tax.

Here's the basic flow:

1. You create an invoice in your PayPal account
2. PayPal sends it to your customer's email address
3. Your customer reviews the invoice and pays online (or offline)
4. The payment lands in your PayPal business account

Each invoice gets a unique invoice number automatically. You can customize it if you prefer your own numbering system.

Free invoicing tool from Wise:
Generate and send international invoices

PayPal invoice vs PayPal request Money

These two features look similar but serve different purposes. PayPal request money is intended for personal use — splitting a dinner bill or collecting rent from a roommate. PayPal invoicing is built for merchants and businesses.

Here's how they compare:

If you're billing a client for work, use an invoice. It gives you access to seller protections and creates a professional paper trail. Request money is fine for casual, personal payments — but it's not meant for business.

How to create and send an invoice on PayPal

To create an invoice using the PayPal business website, you’ll need to take the following steps¹:

Each invoice is assigned an invoice number automatically. You can alter this number if you prefer - but it can be a useful way to keep track of which invoices you have sent to which customers.

If you prefer a mobile experience, you can download the PayPal business app and send your PayPal invoices from there:

In both cases, templates are preloaded and can be customized however you’d like. You can add your logo, a delivery message, or a thank-you note, for example.¹

Recurring invoices and quick invoices

If you bill clients on a regular schedule, PayPal lets you set invoices to repeat weekly, monthly, yearly, or at a custom interval. The first invoice sends immediately (or on a future date you choose), and subsequent invoices follow your set frequency.
Quick invoices are a mobile-only feature that streamlines the creation process. They let you send a professional payment request in seconds — useful for on-the-go billing.²

Sharing your invoice

Beyond email, you can share a PayPal invoice through:

• A shareable link (copy to clipboard)
• SMS or messaging apps
• QR code (for in-person payments)

What information should be on a PayPal invoice?

A complete invoice helps you get paid on time and reduces the chance of disputes. Here's what to include⁵:

• Your business name and contact details — address, email, phone number
• Client's name and contact details — so the invoice is properly addressed
• Invoice number — a unique identifier for tracking
• Invoice date — when the invoice was issued
• Due date — when payment is expected
• Description of goods or services — be specific about what was delivered
• Unit cost and quantity — or hourly rate and hours worked
• Tax, shipping, and discounts — itemized as separate line items
• Total amount due with currency — clearly stated
• Payment terms and instructions — accepted methods, late fees, and any conditions

PayPal's invoice tool auto-populates several of these fields based on your account information. You can also save templates for repeat use.

How to pay a PayPal invoice

Once you send the invoice, your customer receives an e-invoice notification by email. They click through to view the invoice and choose how to pay.
Payment options include:

• PayPal balance
• Linked bank account
• Credit or debit card
• Venmo
• Apple Pay
• Pay by Bank (ACH)
• PayPal Pay Later (installments)

Do you need a PayPal account to pay an invoice?

No. Customers without a PayPal account can pay using a credit or debit card directly from the invoice. If your customer pays outside of PayPal entirely, you can still mark the invoice as paid within your account to keep your records accurate⁴.

PayPal invoice fees and charges

There's no fee to create, send, or cancel a PayPal invoice. The fees kick in when your customer pays. How much you're charged depends on the payment method they use.

Domestic invoicing transaction rates (US)³:

Anything involving foreign currencies can get expensive. It’s hard to figure out how much you’re paying unless you look at independent research. These can show the real cost of PayPal business international transfers

PayPal’s international invoice transfer fees and currency conversion

It's best to make sure you understand the costs involved before you choose the invoicing platform that’s right for your business.

If PayPal carries out a currency conversion for you, you can expect to pay fees for the service.

In most cases, the seller can decide whether they or the buyer will pick up the costs involved with the international transfer.

Doing business overseas can help scale operations, but FX rates and hidden fees in cross-border payments can eat into profit margins and impact cash flow.

PayPal international invoice fees and currency conversion

If you do business across borders, it's worth understanding the full cost before choosing an invoicing platform.

International transfer fees

For a US PayPal account, international invoicing transactions cost 1.50% on top of the domestic fee, plus a fixed fee depending on the currency received.

PayPal currency conversion fees

If you decide to make an international payment from your PayPal account, the exchange rate used by PayPal includes a markup added to the wholesale exchange rate.

The wholesale rate - also known as the interbank rate, or the mid-market rate - is the rate that PayPal gets from a third party when they convert currencies. This will apply in any circumstance in which PayPal exchanges currency on your behalf.

PayPal takes the wholesale rate and adds a currency spread. This is an extra charge of 3-4%, depending on what type of transaction you’re carrying out.⁵

You can check if you’re happy with the exchange rate by comparing it to the mid-market rate using a currency converter online. This will help you get an idea of how much extra you’re being charged through the PayPal currency conversion spread.

You can also look at a case study showing what real businesses were charged for PayPal international transactions.

Receiving money internationally through your PayPal business account? Save money with Wise

Banks and money transfer providers often add a markup to the exchange rate to make extra profits.

Wise is different. Its smart new technology skips hefty international transfer fees by connecting local bank accounts all around the world. Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to send, hold, and manage business funds in 40+ currencies.

You can create professional invoices using the free invoice generator, or invoice templates from Wise.

With the Wise Business account, you can get major account details for a one-off fee, to receive invoice payments like a local. For example, you can get UK account details, even as a US citizen. This means your customers can pay directly in their own currency. You can then keep, convert, and manage your currencies - all from the same account. This can help you receive international invoice payments faster.

If you use invoicing software, such as QuickBooks, you can also add your Wise account details to the invoice to get paid with ease. Your bill payments and any other Wise transactions will be synced, matched and categorized in QuickBooks for simple reconciliation.

Is PayPal invoicing safe?

PayPal offers protection to both buyers and sellers, depending on the circumstances of the transaction. The PayPal dispute resolution center is the first point of call if you have a problem.

PayPal will help resolve the issue if possible and, if not, may issue a refund. As a seller, it's important to be aware of some fairly common scams from buyers.

A buyer can open a dispute with PayPal, claiming that an item never arrived, wasn't as described, or was damaged. PayPal then investigates and decides whether the buyer or seller was at fault⁶. Buyer protections are often considered to be stronger, and some sellers report having money deducted from their account to refund the buyer.

A few things you can do to protect yourself⁷:

• Photograph items and packaging before shipping
• Use tracked and registered mail
• Write accurate, detailed descriptions when selling online
• Keep records of all communication with the buyer

Is PayPal invoicing right for your business?

The PayPal invoice service is quick and convenient, but it’s worth comparing the costs against other options.

Nobody wants to pay more than they have to - and the fees involved in receiving invoice payments through PayPal invoicing can add up quickly.

If you do international business, you may consider using an alternative option - such as Wise Business to receive invoice payments.

Register with Wise Business online

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Frequently asked questions about PayPal invoices

How do PayPal invoices work?

You create an invoice in your PayPal account, add your client's email and the payment details, and send it. Your client receives an email with a link to view and pay the invoice. Payments go directly into your PayPal business account.

Is there a fee for a PayPal invoice?

There's no fee to create or send an invoice. Fees apply when your customer pays. Rates range from 1% (ACH) to 4.99% + $0.49 (Pay Later), depending on the payment method. International transactions incur an additional 1.50%.

Is it better to send an invoice or request money on PayPal?

If you're billing a client for goods or services, use an invoice. It provides seller protections, customization options, and a professional record. Request money is designed for personal payments between friends and family.

What information should be on a PayPal invoice?

At minimum: your business name and contact info, client details, invoice number, date, due date, description of goods or services, amounts, applicable tax, total due, and payment terms.

Can you send a PayPal invoice to someone without a PayPal account?

Yes. Your customer can pay using a credit or debit card directly from the invoice email, without needing a PayPal account.

Can you set up recurring invoices on PayPal?

Yes. You can schedule invoices to repeat weekly, monthly, yearly, or at a custom interval. The first invoice sends immediately or on a future date you choose.

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*. 3.14% Annual Percentage Yield (APY) on USD main accounts is current as of 25/2/2026 and is subject to change see Program Agreement for details

**. Feature not available to residents of New York or Alaska at this time. Please see eligibility criteria.

***. The current Program Bank is JPMorgan Chase Bank, N.A., see Appendix 1 of the Program Agreement for the most updated list of Program Bank(s). Eligible customers must opt in to the interest feature. Participants will have the balance of their USD funds held in their Wise Account "swept" into a Federal Deposit Insurance Corporation ("FDIC") insured interest-bearing account at one or more participating banks (each, a "Program Bank") that will hold and pay interest on the deposit funds. For more information on FDIC insurance coverage, please visit FDIC.gov. Customers are responsible for monitoring their total assets at each of the Program Bank(s) to determine the extent of available FDIC insurance coverage in accordance with FDIC rules. The Program is not intended to be a long-term investment option, checking or savings account, investment contract or security.

Sources:

1. How Do I Create and Send an Invoice | PayPal
2. Invoicing: Create and Send Invoices Online | PayPal
3. Merchant Fees (Invoicing Transaction Rates) | PayPal
4. How Do I Pay a Money Request or Invoice | PayPal
5. What to Include in an Invoice | PayPal
6. Purchase Protection for Buyers | PayPal
7. User Agreement (Seller Protection) | PayPal

All sources checked March, 2026.