Paypal paying well under the going rate for currency

grumbler

https://www.paypal.com/uk/webapps/mpp/cross-border-and-conversion-fees#currencyconversion

Currency conversion fee

Currency and Code / Currency Conversion Fee (above the wholesale exchange rate)
U.S. Dollar (USD) / 3.0%

All e-wallets do this. So do all banks, although the fee can vary slightly.

E.g. Skrill:

Currency conversion

For transactions involving currency conversion Skrill adds a fee of between 2.99% and 4.99%** to the wholesale exchange rate we offer.

InsideInsurance

hubb wrote: »

But surely the world standard rate is universally the same? why do they tell us the current rates on the news for instance ?

Of cause not, the value you quoted was the mid rate. Big deals are individually brokered and the mid point of those is reported as "the rate"

A company providing a service obviously will want to charge for the service they are providing. For exchanging monies there are two ways. You either use a fixed exchange rate and an overt commission or alternatively you have a different rate which hides your commission. Did you not wonder why foreign exchange shops have a different buy and sell rate?

0% commission is a fairly strong marketing message and so the industry has moved in that direction.

If you want to pay lower fees then shop around before doing conversions.

hubb

So Paypal charge a separate fee before the currency rate they give. Thus getting 2 fees in fact, not one.

"If you want to pay lower fees then shop around before doing conversions"

How can I shop around when the money is in my Paypal account ?

agrinnall

If you want to avoid Paypal's currency conversion then your choices are:

1) Don't use Paypal

2) Don't do cross currency transactions

3) Set up bank accounts in every currency that you transact, transfer the money in each currency from Paypal to those accounts, then spend the money when you visit the relevant currency area.

hubb

I rest my case

: First, you pay the usual Paypal fees. Second, you’re probably paying Paypal another 2.5% to exchange your money from USD to your local currency.

http://www.inflowinventory.com/Blog/index.php/2008/12/03/how-to-save-on-paypal-currency-exchange-rates/

cifpower

hubb wrote: »

I rest my case

: First, you pay the usual Paypal fees. Second, you’re probably paying Paypal another 2.5% to exchange your money from USD to your local currency.

http://www.inflowinventory.com/Blog/index.php/2008/12/03/how-to-save-on-paypal-currency-exchange-rates/

Caveat Emptor

Why would you choose to use a service for which you do not know the charges?

hubb

cifpower wrote: »

Caveat Emptor

Why not just say "buyer beware" ?

I have no option but to use Paypal as the companies that pay me use it.

Gromitt

I have a Paypal balance and receive foreign transactions. However, rather than converting the foreign transactions to UKP, I hold a seperate balance for them, so I have a UKP, USD and CNY balance. I'm not desperate for the cash so I wait until the exchange rate is favourable or simply use it to pay others.

grumbler

hubb wrote: »

Why not just say "buyer beware" ?

Then stop using "e.g.", "etc.", "a.m.", "CV", "vs", "Re", "per cent" and all other Latin words and use only English equivalents instead.

I have no option but to use Paypal as the companies that pay me use it.

Well, someone has to pay for the conversion, and 3% is pretty typical amount for this. Either bite the bullet or find out what PP charges are and charge the companies extra if they don't pay in ££.

Scarpacci

hubb wrote: »

So Paypal charge a separate fee before the currency rate they give. Thus getting 2 fees in fact, not one.

"If you want to pay lower fees then shop around before doing conversions"

How can I shop around when the money is in my Paypal account ?

Of course they do. The separate fee is for the usual money handling service Paypal provide, irrespective of the currency. So somebody with a simple £-£ transfer would pay that fee as well, which seems perfectly understandable. The fee for the currency rate is obviously specific to international currency transfers, which as has been pointed out would be expected to attract a fee. If Paypal only charged the one fee, the minority who have cross-border transfers would be subsidized by the other users who aren't dealing with foreign currencies.