From what I've read, in order for someone to send $$ via PayPal to a friend or family, they also have to have a PayPal account. If they do and they fund the transfer with their PayPal balance or a linked bank account, then there is no fee. If the transfer is funded via credit card, debit card, or PayPal credit then the sender pays a fee, which, in the US, is currently 2.9%.
I think the take away here is that both the sender and recipient of the $$ need to have PayPal accounts.