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Get paid sooner: Improved PayPal integration with fees support now live

Posted 7 years ago in Product by Craig Walker
Posted by Craig Walker

Today, I’m excited to share details of our latest release, which delivers a beautiful payments experience for you and your customers using PayPal and Xero.

The highlights of this release include:

  • A slick checkout experience for your customers with PayPal Express Checkout and online invoices marked as paid
  • You’ll get a real-time update on the status of an invoice in Xero
  • PayPal & Stripe fees are automatically split out from payments and a spend money record is created
  • Payments and fees are automatically matched against an invoice making reconciliation a breeze

Customers pay and get immediate acknowledgement

With the improved PayPal integration, your customers can pay your invoice with a couple of clicks. Once the payment is complete, the online invoice updates to show that it’s been paid.

paypal-express-checkout-on-online-invoice payment-successful-modal

Payment is reflected in Xero

The payment is also reflected in Xero, so that that you no longer have to wonder about the status of your invoice.

You’ll see the confirmation of payment show up in two places: in the history and notes of the invoice; and in the “receive money” transaction where the reference field automatically displays the corresponding payment ID from PayPal.



PayPal & Stripe fees are managed automatically

Xero also automatically manages the fees that PayPal and Stripe take for its services.

Not only is the payment recorded, but the fee is automatically recorded in the history and notes of the invoice. There’s a link to view the “spend money” transaction related to the fee, with the reference field displaying the corresponding payment ID from Stripe / PayPal. The fee is automatically coded to the account assigned to PayPal / Stripe fees – which you can easily set up and manage in the payment services settings.



PayPal payments and fees matched ready to reconcile

Xero automatically matches PayPal payments and fees, ready for fast reconciliation.


Just update your payment services settings

Best of all, the upgrade is free.  All you have to do is update your settings in payment services.

The result: Xero does the heavy lifting

The result is a powerful, integrated invoicing solution – with Xero doing more of the heavy lifting so you can focus on delighting your customers and getting paid quickly.


What else we’ve been up to this year

Already this year we’ve delivered more ways to help you get paid sooner through Xero invoicing.

We started out the year by offering an easy way to support credit card payments through Stripe, multiple payment options, and access to these settings when raising an invoice. Then, just a few months ago, we released another wave of improvements that made online invoice pages responsive to the size of the viewer’s screen, as well as support for Braintree payment services.

There’s still lots we want to do, and we’re already making great progress on the next set of improvements, so stay tuned!


Sholto Macpherson
September 26, 2016 at 2.51 pm

Does this new integration with PayPal and Stripe only affect transactions through Xero’s Online Invoices? Or does it relate to PayPal and Stripe transactions generally?
i.e. if someone buys a report from me through Stripe and an online learning platform Kajabi, will Xero automatically create the spend money for the Stripe charge?

November 4, 2016 at 2.39 pm

What do I do if I want to pass on the paypal fee to my client? I don’t want to have to manually change my invoice to reflect the fee.

Ken Kelleher
April 30, 2017 at 9.29 pm

Did you ever get a solution for this?


August 28, 2017 at 2.25 pm

Keen to get this feature also, hate manually adding the fee!

December 10, 2016 at 1.14 am

Not only is the payment recorded, but the fee is automatically recorded in the history and notes of the invoice. There’s a link to view the “spend money” transaction related to the fee, with the reference field displaying the corresponding payment ID from Stripe / PayPal.

Graham Jepson
October 11, 2017 at 10.07 am

As some have asked above, is there a way to pass the paypal fee onto the client? If so, does that happen within Zero or is it set up in my Paypal acc? Please advise.

May 16, 2018 at 1.20 am

Did anyone get an answer about to charge this Paypal fee back to the client?

William Li
May 21, 2018 at 4.49 am

In Xero, for Stripe, it is possible to “Charge my customer a processing fee”.
This is not possible (no idea why) for PayPal.

August 2, 2018 at 2.13 pm

I’ve got this working perfectly, but, I don’t understand how I allocate the payment once I transfer the funds from PayPal to Xero?

Craig Walker in reply to Wayne
August 3, 2018 at 2.13 am


Not sure exactly what you mean here. If you’re getting paid through PayPal then the payment will automatically be applied to the invoice at the point of payment. You will then need to reconcile that payment. We strongly encourage the use of a PayPal feed to do that (you can learn more here: https://central.xero.com/s/article/PayPal-direct-feeds). Does that answer your question?

October 4, 2018 at 9.44 pm

It would really help if @xero could shed some light on the repeated question:

Is there a way to pass the PayPal fee onto the client?

August 8, 2020 at 2.31 am

Earth to Xero…. hello? No reply here from you on all the Q’s on how we can levy a transaction fee to customers for using PayPal.

Beeny Atherton in reply to Jael Xero
August 11, 2020 at 4.06 pm

Hi Jael, thanks for getting in touch and sorry that we have not provided an update on this for a while. I have spoken with the team and they have informed me that although there is the ability to surcharge with Stripe this is not available for other payment services at this time. We appreciate that there has been a lot of discussion in regards to this feature over the years – however, each integration requires a fairly heavy development investment. We will continue to review the request and will provide an update if we’re able to schedule more in. Thanks!

Jake Leslie
July 12, 2022 at 12.13 am

In Xero, for Stripe, it is possible to “Charge my customer a processing fee”.

Does Xero also support this for PayPal?

October 3, 2022 at 12.20 am

Still no updates in regards to the paypal surcharges to customers ?! There is a high demand so why not supply ?!

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