I Get Paid in US Dollars Via Paypal and the Exchange Rate is not Good

Jon456

Hi.

I have been working from home for a US crowdsourcing company that pays me in US dollars via PayPal. I get paid every two weeks (about $350 each time) and send the US dollars from my PayPal account to my English bank account. I lose out because the exchange rate PayPal offers me is not good, I think PayPal makes a lot of profit from this. My estimate is that every time I do a transfer PayPal take a fee of about £10 which is hidden inside the lousy exchange rate compared to the one I see on Google or xe.com.

I have read there is a setting in PayPal where I can specify that my bank (Santander) does the conversion instead, but I have heard that the exchange and fees from using that option is usually just as bad in terms of the deal I would get.

My main question is, surely there is a service based in the US who would accept PayPal US Dollars and would then send GBP to my bank account with a much better rate/fee? If there isn't, then why isn't there?! I thought a simple Google search would provide an easy answer to my question but it didn't seem to.

Thanks for your help

JuicyJesus

Whatever rate you get through some other service is very unlikely to be as good as what you see on Xe or Google. Those rates are mid-market rates, you can never actually buy or sell currencies at them, and actual buy or sell rates will differ from these based on the actual organisation doing the exchanging, including PayPal and banks, who do indeed make a profit from this (it is how such a service is kept viable.)

The only option you would realistically have is to send the money in USD to a person located in the US who then sends you on the money via a normal wire transfer or TransferWise, but this also incurs fees and will still incur the exchange rate spread as well as potential intermediary bank charges in the case of a wire transfer. You could always also ask the crowdsourcing company to send money to an FX broker on your behalf for onward remittance to you. Both of these options may not be acceptable to the crowdsourcing company, take longer than PayPal (in the order of working days or up to a week, maybe more if there is some hitch in the process) and have their own dangers.

Personally, I would suck it up and stick with PayPal. The rates PayPal offers are not that bad in the scheme of things and they are also quick and simple relative to other payment methods. The amount of money is so small that an FX broker will not want to know and your actual loss to exchange rate spread is going to be minimal relative to what you'll find elsewhere. They are quite open about the fact they add a 2.5% spread to the wholesale market rate to determine their exchange rate and do not charge any other fees on top of that either.

benjus

Have a look at the TransferWise Borderless account: https://transferwise.com/gb/borderless

They should be able to pay you in USD into this account. Then you can decide how and when to convert it to GBP.

eDicky

I'm going to assume that the company will only pay you into your Paypal account, in USD. (Otherwise there would be several solutions.)

Have a look at Fineco Bank UK, who offer a multicurrency account. I am not too familiar with Paypal but if you can link a Fineco USD account in your name and manage to withdraw your funds to it in USD without Paypal doing any conversion, you can then convert the USD to GBP within Fineco at a rate very close to the mid-market rate you see on xe.com. You can then send the pounds to your regular UK account for a fee, I think, of 50p, or keep them with Fineco and use their debit card etc.

Chapuys

Is your Paypal account in USD? If it is then the easiest way is to transfer it to a US account with Transferwise and convert it to GBP there then withdraw to UK bank account. You can also use Revolut. Transfer it from Paypal to Revolut using the USD account details then transfer it to GBP then withdraw it.

Jon456

Well, I setup a Transferwise borderless account. It gave me some US bank account details for sending money to. Next step was to try and add that bank account to my PayPal so I could send money to it. A quick call to PayPal confirmed this is not possible. Looks like PayPal have this one sewn up

eDicky

Jon456 wrote: »

Next step was to try and add that bank account to my PayPal so I could send money to it. A quick call to PayPal confirmed this is not possible.

Did they give a reason?

Can you not be paid directly into your Borderless Account?

Is your PayPal account in USD?

Jon456

No, the guy was fairly short with me ; I think the reason is pretty obvious i.e it's a big part of how PayPal make money. I can only be paid via PayPal or Payoneer. My PayPal account was opened in the UK and currently is linked to a UK bank account.

angel4xx

It depends who you get when you phone Paypal. Officially they won't let you register a US bank account if you're in the UK. But because their system runs on U.S. software it is actually possible and I managed to register my U.S. Transferwise account at the first attempt. If you get a Paypal agent who says you can't, just put the phone down and ring again until you find someone who will do it for you.

londoninvestor

Chapuys wrote: »

Is your Paypal account in USD? If it is then the easiest way is to transfer it to a US account with Transferwise and convert it to GBP there then withdraw to UK bank account. You can also use Revolut. Transfer it from Paypal to Revolut using the USD account details then transfer it to GBP then withdraw it.

Per another thread we have ongoing at the moment, Revolut's USD account can't receive payments through ACH (the US equivalent of BACS). It can receive SWIFT payments, but the danger is that SWIFT fees will cost you more than Paypal's FX spread does - particularly for the amounts we're talking about.

Transferwise Borderless does let you receive USD payments through ACH so would be the better bet in this scenario.

Anthorn

To cut what looks like a very long story short - change the default currency to USD.

Here's what the PayPal community says about it but you'll find more links if you Google it:

Log in to your PayPal account.
Click Money at the top of the page.
Click Manage Currency.
Choose the currency to make Primary
Click Make Primary.

https://www.paypal-community.com/t5/About-Payments-Archive/How-to-change-Paypal-default-currency-to-USD/td-p/616528