Do not understand those curency conversion.

[a1b2c3]

Hello,

I got a money request I want to pay: $460.00 US dollars. I using Canadian funds for that purpose.

Canadian $ is now higher than US $ but paypal is still requesting Can$ 470.00 from me.

Several times before I did some purchases and every time my total for the purchase in US $ was always a lower amount in Can $.

can someone please explain that to me?

Thank you.

[Luanne]

Hi a1b2c3,

here's why....  The exchange rates you hear about in the news (saying that the Canadian dollar is worth more than the U.S. dollar) are what they call "nominal exchange rates"  and are used by governments when talking about the value of the dollar.  These however are not the actual exchange rates you receive when you go to convert funds for a transaction.  The exchange rates for transactions through a bank or any other financial institution are called the  "cash rate" and usually include a currency conversion fee of up to 4%.  That is why, even when our dollar is, in theory, more valuable than the U.S. dollar, we still have to pay more... because we also are paying the fee for currency conversion.   It is essentially unavoidable unless you want to keep a U.S. bank account (not to be confused with a Canadian bank account holding U.S. dollars) for your purchases and pay right from that. 🙂 

I posted more about this earlier with actual screenshots from the Bank of Canada website if you wanted to take a look under the currency conversion tag to find it.

Luanne

[TeamFDT]

PayPal is so wrong how they do this, they take payment from a AMERICAN CREDIT CARD, then charge me 2.5% to convert it to Canadian then charge me another 2.5% to flip it back to american because I paid from within CANADA and the CANADIAN DOLLAR is higher!  BUT when I'm paying with a credit card, ARRRHHHHHHHH Oh and the way they have their pages set up in everyones accounts, it's NOT LEGAL! They have to legally show any extra charges when people are paying, I dont give a **bleep** if it's in their agreements, when money is being used they MUST SHOW EVERYTHING, right now how it stands it's illegal and FRAUD!

[BKD]

Paypal, get with the times. The Canadian dollar is not valued at 0.95 U.S. The site says it utilizes the most up to date exchange information, hardly.

[a1b2c3]

Keep it coming guys!

I want to get to the bottom line of this. Seems that my credit card company is mistreating me very badly too. 20% interest + 2.50% currency conversion fee on top of paypal's 2.50% currency conversion + insertion fee + 12% final fees.

I pay for the items I sell, i pay for shipping, I drive, i read and answer emails, i get negatives!!!!!!!!!

All this to earn 5 bucks!!!!!!

I can t breathe!!!! just can't breathe!!!!!!!

[Buffy416]

I agree with you no matter what we are always paying higher...

[Buffy416]

It seems I am not the only one questioning the conversion - it seems when the American dollar is higher we pay for the conversion from CDN dollars to US dollars and now the Canadian dollar is higher we are still paying for the so called conversion.  Doesn't make sense to me and it's enough to stop using e-bay.  I can use my vendor permit and buy locally - pay in Canadian dollars and not wait 2 months for delivery.

[fitbidder]

This example shows how currency conversion works at Paypal or any Canadian chartered bank. It is based on a $1.05 CAD/USD exchange rate and a 2.5% standard currency exchange fee:

CAD/USD = 1.05

1. CAD/USD + Fee = 1.05 + 0.0250 = 1.0750. To buy $1.00CAD, you pay $1.0750USD.

2. CAD/USD - Fee = 1.05 - 0.0250 = 1.0250. To sell $1.00CAD, you get $1.0250USD.

USD/CAD = 1/1.05 = 0.9525

3. USD/CAD + Fee = 0.9525 + 0.0250 = 0.9775. To buy $1.00USD, you pay $0.9775CAD.

4. USD/CAD - Fee = 0.9525 - 0.0250 = 0.9275. To sell $1.00USD, you get $0.9275CAD.

The two most common scenarios for us Canadians:

a) When you transfer your USD balance to a Canadian bank account (sell $USD), use 4.

b) When you pay for a USD purchase with Canadian dollars (buy $USD), use 3.

[fitbidder]

CAD/USD = 1.05

1. CAD/USD + Fee = 1.05 + 0.0250 = 1.0750. To buy $1.00CAD, you pay $1.0750USD.

2. CAD/USD - Fee = 1.05 - 0.0250 = 1.0250. To sell $1.00CAD, you get $1.0250USD.

USD/CAD = 1/1.05 = 0.9525

3. USD/CAD + Fee = 0.9525 + 0.0250 = 0.9775. To buy $1.00USD, you pay $0.9775CAD.

4. USD/CAD - Fee = 0.9525 - 0.0250 = 0.9275. To sell $1.00USD, you get $0.9275CAD.

The two most common scenarios for us Canadians:

a) When you transfer your USD balance to a Canadian bank account (sell $USD), use 4.

b) When you pay for a USD purchase with Canadian dollars (buy $USD), use 3.

[fitbidder]

CAD/USD = 1.05

1. CAD/USD + Fee = 1.05 + 0.0250 = 1.0750. To buy $1.00CAD, you pay $1.0750USD.

2. CAD/USD - Fee = 1.05 - 0.0250 = 1.0250. To sell $1.00CAD, you get $1.0250USD.

USD/CAD = 1/1.05 = 0.9525

3. USD/CAD + Fee = 0.9525 + 0.0250 = 0.9775. To buy $1.00USD, you pay $0.9775CAD.

4. USD/CAD - Fee = 0.9525 - 0.0250 = 0.9275. To sell $1.00USD, you get $0.9275CAD.

The two most common scenarios for us Canadians:

a) When you transfer your USD balance to a Canadian bank account (sell $USD), use 4.

b) When you pay for a USD purchase with Canadian dollars (buy $USD), use 3.

[hihi]

I AM DONE WITH PAYPAL!!!!!  I DO NOT LIKE THE FEELING OF BEING RIPPED OFF!  GOOD-BYE EBAY!

[ulove]

I think pay pal should at least present accurately the exchange rate of the day that we hear on the news, the cash rate that they use and clearly state their conversion fee on their payment statement.  This is just good business practice and informing consumer accurately.  Thanks for the idea of having an American cc.  That might solve the problem.  Anyway, it almost feel like Paypal is not upfront here.  I think more Canadians should be telling pay pal.