Fixing the Fee Fog and Fine-Tuning PayPal
Overview
PayPal's P2P transactions are plagued by issues that create confusion, hinder trust, and lead to frustration and drop-offs.
Objectives
Increase user satisfaction
Encourage users to utilise P2P services more frequently
Boosting overall platform engagement and customer retention
Impact
We focused on improved fee transparency, efficiency, and user confidence in PayPal transactions.
67% Increase in User Satisfaction: Experience rating rose from 5.2/10 to 8.7/10.
100% Fee Comprehension: All users correctly identified transaction costs before confirmation (up from 30%).
Methodes
User Interviews
Competitive analysis
Affinity Diagram
Persona
HMW
Crazy 8
Impact-Effort Matrix
User Feedback
It all started with a question when I wanted to pay my mentor. ”Do you mind if I pay another way? PayPal is so confusing!”
That was the moment I stopped and asked myself, why don’t I like PayPal? This simple question sparked a deeper curiosity: Was it just me, or were others struggling with PayPal too?
PayPal's P2P transactions are plagued by issues that create confusion, harm trust, and lead to frustration and drop-offs.
According to our research, users face challenges that erode trust and usability, resulting in transaction frustration and lower engagement.
+6 user interviews revealed the difficulty of use and lack of transparency when making P2P transactions.
Themes started to emerge after we mapped all the insights. These were the most shown themes, which gave us solid ground to further plan our process.
User1:
Some of its options are not clear at all and not easy to find at first, like the request button, send again, and PayPal balance on the home page.
User 2:
I believe It is messy! There is a lot of possibility of doing a wrong transaction on the app, much more than other finance apps.
User2:
I had money transferred that was $10, but for some reason I got a fee for it. Why did I get a fee? I never got fees before.
User 5:
I am not so satisfied with PayPal. It does have too much info on it and makes it very confusing.
PayPal's usability issues are driving users away, damaging its reputation, and amplifying frustration in public discussions.
By optimizing these elements, PayPal can increase user satisfaction, improve transaction completion rates, and encourage users to utilize P2P services more frequently, ultimately boosting overall platform engagement and customer retention.
PayPal falls short in many aspects compared to modern fintech apps such as Revolut, Wise, and Skrill.
To address the problems we identified, we analyzed popular fintech apps used for P2P transactions, such as Revolut, Wise, & Skrill.
Here are the summaries and in-detail analyses of them.
Direct access to core features
Revolut's hierarchical structure ensures that key actions (Add Money, Exchange) are easily at reach.
Contact search is versatile and dynamic, offering categorisation and search by multiple identifiers (phone, @username, email).
Fee & Exchange rate Transparency
Revolut only presents fees at the point of transaction, keeping the interface uncluttered while ensuring that fees are clearly broken down before confirmation.
The order review step reinforces trust by ensuring users understand the total amount, fees, and conversion rates.
Core Actions Placement
Key financial actions (Add Money, Transfer, Exchange) are prominently displayed at the top of the homepage, reducing friction.
Clarity with Colours and Labels
Well-placed labels and use of color contrasts (“Instant,” “Free,” “Fee 2%”) ensure immediate clarity on transfer terms.
Wise also uses color contrast to highlight important notifications, resulting in less friction and ambiguity.
Easy Access to core Actions
Wise's homepage structure ensures that key actions (Send, Request, Add Money) and the most needed functionalities are easily within reach.
Increased user awareness prior to, during, and after the transaction
No surprises at checkout with clear and upfront fees.
Deductibles and fees are displayed at every stage, reinforcing trust and eliminating uncertainty. Whether it’s currency exchange, transfer fees, or payment breakdowns, Wise makes sure the user never encounters hidden costs.
The most feasible ideas based on their impact and effort were:
Enhancing Fee Visibility & Transparency To Avoid Surprises
Unclear fee in the Old design
For many PayPal users, transaction costs felt like a guessing game.
Fees were often buried in the process, only appearing at the final step, leaving users frustrated and unsure of the total amount they would be charged. Without a clear breakdown, users lacked control over their payment choices, sometimes unknowingly selecting options with higher fees.Our redesign changes that by surfacing fee details at multiple touchpoints, during payment method selection, transaction review, and confirmation, ensuring users stay informed every step of the way. Now, users can compare costs upfront, avoid surprises, and make confident financial decisions with ease.
❝ I just had money transferred that was $10, but for some reason I got a fee for it. Why did I get a fee? I never got fees before. ❞
❝ Trying to send 120 pounds to England, but the app kept asking for extra money due to unclear fees.❞
Fee clarity in the new design
We surfaced the fee breakdown at multiple points throughout the transaction process to ensure users are continuously aware of the cost.
From selecting the payment method to the final review screen, fees are clearly displayed—including PayPal fees, exchange rates, and total payment amount.
Users can compare different payment methods and their associated costs before proceeding.
Old send money screen
❝ Sometimes I don’t realize I need to add money until the last step. ❞
The original design only allows the user to enter an amount with a small currency selector next to it. The exchange rate is only visible later in the process.
The screen doesn’t show the user’s available balance, making it unclear whether they need to add funds.
New Send money screen
The redesigned screen shows both the sender’s and recipient’s currency right from the start, along with the exchange rate. This prevents surprises about conversion rates later in the flow.
Our design displays the PayPal balance directly below the amount field, making it easy to see if a top-up is needed.
Removing the Uncertainty in Currency Conversion
Understanding exchange rates shouldn’t need a blind trust. In the previous design, users saw only the current exchange rate at the moment of transaction, without any historical context or clear differentiation between conversion fees and actual rates. This lack of transparency led to confusion and discrepancies in the final transaction amount.
With our updated design, users now have access to real-time exchange rate trends. Additionally, we’ve separated exchange rate fees from transaction costs, making it clear how much users are paying for the conversion itself. This helps users make informed decisions about when to send money, ensuring they get the best possible value.
❝ I did not know if the fee is from PayPal or the exchange rate itself.❞
❝ I don’t want to guess if it’s a good time to send money, I need to see how rates have changed before I decide.❞
The old screen (left) shows only the static exchange rate at the moment of the transaction. Users must trust that they are getting a fair rate without any context.
The redesigned screen introduces a graph displaying historical exchange rate trends, giving users insight into fluctuations over time (weekly, monthly, and annually).
Users only see the exchange rate without a clear indication of how it affects fees or the final amount.
The new version explicitly separates the exchange rate and any additional fees, ensuring users understand what they’re paying for.
Introducing A "Schedule Payments" Feature
❝ I wish there was a feature that allowed me to set up recurring payments, like paying someone every 5th of the month.❞
❝ It would be great if there was an option to schedule payments.❞