Hidden conversion fees

[DON-P]

Can anyone explain this side-to-side comparison to me? This isn't the first time that Paypal's exchange rates are absurdly low compared to the actual rates. So before you get to this screen, Paypal kindly mentions: Fees? NO FEES!

When you click next, you don't see any fees mentioned but you are definitely paying a hefty fee they just "hide" or "don't mention it" it. I've tried to reach out to Paypal before, it's always the same answer: "Well, we work with an exchange company that handles our conversions so there is nothing we can do about their exchange rates". This always leaves me thinking "why would Paypal want to work with an exchange company that offers WAY lower exchange rates to Paypal's customers, and indirectly the customers actually ARE paying a fee because our payout is way lower than it should be. 

10.000 United States Dollar equals 9.500 Euro at this right moment. If I transfer my funds from Paypal to my bank account, the exchange company would pay out only 9.023 Euro which is almost a 500 Euro price difference (a.k.a. the exchange company takes this from Paypal's customers). Imagine transferring these funds each month of the year, would result in a 6.000 Euro loss! Crazy.

[sharpiemarker · Accepted solution]

@DON-P 

Never look at exchange rate on the internet for PayPal’s exchange rates. PayPal has/uses their own rate and they also add 3 to 4% currency conversion fee to the base exchange rate depending on the situation. They liken their rates comparable to ones at the airport or at currency exchanges for the retail/consumer crowd. PayPal’s end users are considered to be in that group. We don’t get the wholesale bank rates.

You can use their currency calculator to get an inkling of what the rate can be however the actual rate in effect is posted when the transaction is being conducted.

“Here's how to view PayPal currency calculator and exchange rate:

1. Go to Money. 
2. Click Currency Calculator. 
3. Select the currencies you want to convert from and to. The exchange rate appears automatically. 

PayPal receives a wholesale rate quote from our bank twice a day and we add a percentage fee to determine the retail foreign exchange rate for currency conversions. Our currency exchange rates remain competitive with conversion rates used by banks. 

The exchange rate applies when you:

• Send a payment in a currency that isn't your default.
• Withdraw money in a different currency.
• Convert one currency balance into another.
• Accept payment in another currency and have it automatically converted. “

Waar vind ik de wisselkoersen van PayPal?

The simplest way to avoid currency conversion fees and conversion altogether is to accept payments in your local currency. PayPal makes a living (pay their employees/vendors, keep operations afloat, make profits, etc, ya know, the capitalism thing) off of fees they charge for services. If you want to handle multiple currencies at a better rate use Wise aka Transferwise because that’s Wise’s whole gimmick.

Apparently, the entering of transfer amount is not the final step. Applicable fees are calculated after clicking Next button. For some countries, it’s allowed to link a US bank to transfer USD but if you’re not doing that, foreign currencies will have to be converted for you hence the transfer review page with the fees calculated. That’s the only explanation I can think of that you’re seeing a zero fee on the transfer amount page/step.

[DON-P]

Hi @sharpiemarker 

Thank you for the explanation. I fully understand and of course PayPal should receive their percentage as well. I would only suggest to clearly state this upon converting currencies because right now it seems sketchy for most users. Saying there are "no fees" while there actually are.

But thanks again!

[myMikeB]

Yes paypal charges unfair exchange rates conversion when we purchase something online and pay with card that needs currency conversion.. and they dont give an explanation when we message, but automated standard reply that does not help...neither is Resolution Centre helpful. Very poor customer service. probably using automated robot replies and no real  tele service agents present!!?? At least explain the reason why their rates are different or pin rates somewhere . charge merchant if fine ,but charge buyer more??. And when someone sends money to you, a significant amount is lost!! Now I know why others are also Discouraged using their service.