Originally Posted by odoreater
They tell you what rate they are going to use, but they don't tell you that it's different from the market rate or how different it is.
If your transaction involves a currency conversion, it will be completed at a retail foreign exchange rate determined by PayPal, which is adjusted regularly based on market conditions. This exchange rate includes a 2.5% spread above the wholesale exchange rate at which PayPal obtains foreign currency, and the spread is retained by PayPal. The specific exchange rate that applies to your multiple currency transaction will be displayed at the time of the transaction.
From what I've gathered based on past experiences, the 2.5% overhead is accurate. I used xe.com to get the most up-to-date conversion rates. Frankly, I think Paypal charges too much for its services, on top of the interests/profits they make on your money while it is in their accounts. There used to be a few others, but they effectively were all killed the moment eBay decided to buy Paypal, which in essence gave them a vertical monopoly on top of the horizontal monopoly eBay has already held. Now, if you sell on eBay and accept Paypal, you're looking at about 10% transaction fee total. THAT, is profit!