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Paypal’s Currency Conversion Rates Seem Like a Ripoff.

By JLP | December 23, 2010

This morning I received £150 (British Pounds) in my Paypal account. Paypal took £6.05 off the top for their fees, which left me with £143.95. They then converted it to U.S. Dollars at $1.50325 per £1.00. Everywhere I looked showed the conversion to be somewhere in the neighborhood of $1.53 to $1.54 per British Pound.

The difference was somewhere around $6 on my transaction. No, it’s not a lot but it is a lot when you figure that I already paid a 4% fee (the £6.05 that Paypal took right off the top). Paying $1.50325 when market rates are quoted at $1.5426 is wrong. Especially when there’s no mention of any additional fees on the transaction.

I called Paypal to find out about this but the woman who took my call seemed lost. She kept telling me about the fees. I told her that I understood the fees and that they were taken out BEFORE the money was converted to dollars. I eventually gave up and hung up the phone.

Any of you noticed Paypal currency conversions issues?

Topics: Miscellaneous | 10 Comments »


10 Responses to “Paypal’s Currency Conversion Rates Seem Like a Ripoff.”

  1. BG Says:
    December 23rd, 2010 at 5:54 pm

    I think it is standard practice to get ripped off on currency conversions — I don’t know if it is even possible to get the FOREX rate anywhere. You can try calling your bank and see what they would’ve done the conversion for, and compare that to Paypal to see if they are ballpark (my guess is that they will be close).

  2. health system canada Says:
    December 24th, 2010 at 6:05 am

    thank info paypal for you…..good..

  3. Dave Says:
    December 24th, 2010 at 12:55 pm

    The newspaper rate is the wholesale rate, available to banks and institutions in large quantities (million $ or pound sized). Paypal is giving you the retail rate, which always includes a spread.

  4. Jnifer Says:
    December 25th, 2010 at 8:56 am

    A very Merry Christmas and a Happy New Year to everyone. Over here, Christmas is hot and sunny with rain falling instead of beautiful white snow.

  5. Hosingfan Says:
    December 25th, 2010 at 8:59 am

    Merry Christmas and Best Of Wishes For the New Year

  6. Don Says:
    December 25th, 2010 at 8:39 pm

    Conversions definitely vary from institution to institution. When I was in Canada this summer I pretty quickly discovered that my credit card was giving me better currency conversions than pretty much every local source of exchange. So I paid for most things with the card.

  7. TFB Says:
    December 26th, 2010 at 3:14 pm

    It’s a 2.5% markup. It’s disclosed on this page (click on the “Additional fees …” expansion arrow):

    https://www.paypal.com/cgi-bin/webscr?cmd=_display-fees-outside

    1.54 * 0.975 = 1.5015

    So they are calculating from a wholesale rate of slightly above 1.54.

  8. Joe Says:
    December 27th, 2010 at 8:17 pm

    Stinking PayPal. I should guess they’d pull a move like this and then attempt to explain it as fees. The downside is that there realy isn’t much you can do about it since PayPal is such a frequently used way to transfer money.

  9. Tracy Says:
    December 28th, 2010 at 5:29 pm

    Would PayPal have received less if they had first converted it to dollars and THEN taken their fee?

  10. Jeroen Says:
    January 1st, 2011 at 3:04 pm

    I sell software and for example my current balance is: 3000
    – 1000€ (primary)
    – 2000$

    This month I for example sell 10 licenses and my balance is 4000€.
    But sometimes a week later e.g; my balance is 3500.
    Or sometimes I sell more licenses and have less earned than a month before where I sold much less???

    Where does this money vanish to???
    Is it because of some currency conversion on the total balance? How can I stop this because sometimes it has a difference of 500€+?

    Thanks,
    Jeroen

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