When PayPal rolled out Pay with Crypto for U.S. merchants in July 2025, the headline was a rock-bottom 0.99% promotional transaction fee. That introductory rate was always temporary — and it officially expired on July 31, 2026. As of August 1, 2026, the standard fee is 1.5%. Here’s exactly how the feature works, who actually pays the fee, and how the new pricing changes the math for merchants and shoppers alike.
What “Pay with Crypto” actually is
Pay with Crypto is a merchant checkout tool, not a new consumer wallet feature. It lets U.S. businesses accept payment in more than 100 cryptocurrencies — including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), USDT, XRP, and PayPal’s own stablecoin PYUSD — and then automatically converts that crypto into U.S. dollars (or PYUSD) that lands in the merchant’s PayPal business account.
The key thing to understand: the merchant never has to hold volatile crypto or touch a blockchain. A customer pays in Bitcoin from their own wallet; PayPal handles the conversion; the merchant sees dollars. Because settlement happens in fiat or PYUSD, businesses avoid price-swing exposure and keep their accounting simple.
Which wallets and coins work
Shoppers don’t need a PayPal balance to pay. They scan a code or connect an external self-custody or exchange wallet. Supported wallets include Coinbase Wallet, MetaMask, OKX, Kraken, Binance, Phantom, and Exodus. The 100+ supported coins cover the major names most people already hold, which is what makes the feature genuinely usable at scale.
Who pays the fee — and what changed
This is the most misunderstood part. The 0.99% (now 1.5%) fee is charged to the merchant, not tacked onto the shopper’s bill at checkout. As a buyer, the amount you pay is the price of the goods plus any blockchain network (gas) fees your own wallet charges to send the transaction — those go to the network, not to PayPal.
So the promo-to-standard jump is a merchant-side cost story. Here’s the before-and-after:
| Detail | Promo (through Jul 31, 2026) | Standard (from Aug 1, 2026) |
|---|---|---|
| Merchant transaction fee | 0.99% | 1.5% |
| Who pays it | Merchant | Merchant |
| Settlement currency | USD or PYUSD | USD or PYUSD |
| Buyer’s added cost | Network gas fee only | Network gas fee only |
| Availability | U.S. merchants (excl. New York) | U.S. merchants (excl. New York) |
Even at 1.5%, the rate is competitive. PayPal has positioned it against international card fees that typically run 1.5% to 3.5%, and it markets cross-border cost savings of up to 90% versus traditional card rails. In other words, the promo ending doesn’t kill the value proposition — it just narrows the gap.
How a checkout actually flows
- A shopper reaches checkout at a participating U.S. merchant and selects Pay with Crypto.
- They choose a coin (say, ETH) and connect a supported wallet like MetaMask or Coinbase Wallet.
- The wallet displays the crypto amount plus a network gas fee, and the buyer confirms the transaction on-chain.
- PayPal converts the incoming crypto to USD or PYUSD in the background.
- The merchant receives dollars (or PYUSD) in their PayPal account, minus the 1.5% fee.
A worked example
Imagine a $200 order paid in Bitcoin.
- What the buyer pays: $200 worth of BTC, plus a network fee that depends on chain congestion (often a few cents to a couple of dollars). PayPal’s merchant fee does not come out of the buyer’s pocket.
- Under the old 0.99% promo: the merchant’s fee was $1.98, netting $198.02.
- Under the new 1.5% rate: the merchant’s fee is $3.00, netting $197.00.
The difference of about $1.02 per $200 order (0.51 percentage points) is the practical cost of the promo ending. On a $2,000 invoice, that gap widens to roughly $10.20 — still comfortably below what a 3% international card fee ($60) would take.
Why merchants may still prefer it — PYUSD perks
One reason the 1.5% rate stays attractive: merchants can choose to settle in PYUSD and hold that balance inside PayPal. PayPal has offered rewards on PYUSD balances, so a business that keeps some settlement in the stablecoin can offset part of the transaction cost. Settling in PYUSD also enables faster, lower-cost transfers than shuffling money through banks, which matters for cross-border sellers.
What this means for you as a shopper
If you’re buying with crypto, the fee change is largely invisible to you — your out-of-pocket cost is the price plus gas. The bigger practical tips:
- Mind the gas, not the fee. Paying with a coin on a low-fee network (or a stablecoin like PYUSD) usually costs less to send than a congested chain.
- Crypto payments are typically final. On-chain transactions don’t reverse like a card chargeback, so double-check the amount and address before confirming.
- Watch for a taxable event. In the U.S., spending appreciated crypto can trigger a capital gain. If your BTC is worth more than when you bought it, using it to pay may count as a disposal for tax purposes.
Frequently Asked Questions
Did the fee increase raise the price I pay at checkout?
No. The 0.99%-to-1.5% change applies to the merchant’s transaction fee, not the buyer’s total. As a shopper you pay the item price plus your wallet’s network (gas) fee. Whether a merchant quietly bakes their processing costs into product prices is up to them, but PayPal does not add the 1.5% to your checkout.
Do I need a PayPal account to pay with crypto?
No. Pay with Crypto is designed so buyers can connect an external wallet — such as MetaMask, Coinbase Wallet, Kraken, Binance, Phantom, or Exodus — and pay directly. You don’t need a funded PayPal balance to complete the purchase.
Is Pay with Crypto available everywhere in the U.S.?
It’s available to U.S.-based merchants but excludes New York, reflecting that state’s distinct crypto licensing rules. Availability also depends on the individual merchant enabling the feature at their checkout, so not every U.S. store will offer it.
Which cryptocurrencies can I use?
More than 100 coins are supported, including Bitcoin, Ethereum, Solana, USDT, XRP, and PYUSD. The exact list can shift over time, so if a specific coin matters to you, confirm it’s accepted in the checkout flow before starting the transaction.
The bottom line
PayPal’s 0.99% promotional rate was a launch incentive, and its expiration on July 31, 2026 was baked in from day one. The new 1.5% standard fee is a merchant cost, keeps Pay with Crypto cheaper than most international card processing, and leaves the buyer experience essentially unchanged — pay from your wallet, cover the gas, done. For businesses, the deciding factor now is whether the crypto rails plus optional PYUSD settlement still beat their existing payment mix. For most cross-border sellers, they likely still do.
WalletWisp is an informational resource and does not provide financial, tax, or investment advice. Verify current fees and availability directly with PayPal before making decisions.
