paypal & exchange rates

miju

I just noticed something about paypal and how I presume they are ripping everyone off big time with currency conversion.

I bought something for $19 and paypal say the current conversion rate is €1 = $1.37 when in fact it's €1 = $1.41356

OK it's only 4 cent but if you tally up the amount of transactions between people on Paypal a day as well as their normal charges they're obviously making a fupping mint of people :mad: :mad: :mad:

me goes off to find similiar to paypal with the correct conversion rates

Gordon

You haven't ever exchanged currency then?! That is how currency exchange works, you never get the correct exchange rate as people want to make money off you.

miju

I've exchanged currency in banks for hard cash but I didn't realise that paypal would do the same when paying by credit card.

certainly other credit card processors on the internet do not charge you currency conversion

alleepally

miju wrote:

I've exchanged currency in banks for hard cash but I didn't realise that paypal would do the same when paying by credit card.

certainly other credit card processors on the internet do not charge you currency conversion

Yes they do.

Here's an explanation from Paypal on the issue.

Q Why is the foreign exchange rate different from what I see in the newspaper?

A The foreign exchange rates quoted in the newspaper or online news sources are almost always the inter-bank rates that are available only to the largest international banks purchasing currencies in quantities of $1,000,000.00 USD or more. A more applicable comparison for consumers is the exchange rates quoted at airports or other consumer currency exchange shops.

The 2.5% spread that PayPal charges is competitive with most multi-currency credit card transactions, in which Visa or MasterCard charge a 1% spread above their wholesale exchange rate, and the card-issuing bank typically charges an additional spread of 1-3%. Visa and MasterCard benefit from a lower wholesale rate than PayPal, but PayPal seeks to keep its foreign exchange rates competitive with credit card transactions and other online payment service providers such as Western Union. Because PayPal does not charge a high fixed fee for sending international payments, the total cost of sending an international payment through PayPal is still lower than for many international multi-currency bank transfers.

nava

Hi

I also had a problem with the exchange rate after a refund.

I bought an item and paid in STG, the item was not in stock so they sent me a refund 2 weeks later, but when the money was put into my CC it was €50 less than what I originally paid, checked paypal and they had done the exchange rates that cost me €50, also checked in XE and could exchange rates did go down but not €50 so contacted paypal and after a couple of e-mails with them they sent me a refund for the €50, they said was that it was just a courtesy refund.

Regards

nazoil

Paypal Cowboys

Paypal offer a much less competitive exchange rate than if the item was charged in the foreign currrency directly to your CC. They take 2.5% over wholesale rate compared with CC about 1%

In total they get 2.5% plus 3.9% off seller (3.4% + 0.5% cross border)

I believe what they do is anti-competitive. I was in Singapore recently and there they were offering to debit my CC for purchases in Euros. It was a rip off too, but at least I had the option to decline.

https://www.paypal.com/ie/cgi-bin/webscr?cmd=_convert-currency-generic

Current BID/OFFER with paypal for €/$ is 1.37 - 1.46
VISA would be 1.40 - 1.43