Avoiding Paypal's Exchange Rate

Discussion in 'Classic Menswear' started by odoreater, Jul 20, 2006.

  1. odoreater

    odoreater Senior member

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    Wtf is up with paypal? I just bought an item that was listed in British Pounds. The market exchange rate between British Pounds and US Dollars is 0.5407 pounds per dollar. Paypal lists their exchange rate as 0.5275 pounds per dollar. Is this some kind of racket that paypal uses to squeeze even more money out of us? Is there any way to get around this other than by sending the seller a personal check? Because of the discrepancy between the actual exchange rate and the paypal exchange rate I'm paying an additional $15. What a bunch of poppycock.
    [​IMG]
     


  2. odoreater

    odoreater Senior member

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    Ooh, I just got an idea. Would I be able to contact the buyer directly and just send them the money using the "send money" feature instead of going through the ebay paypal invoice that you automatically get in your paypal account when you win something on ebay?
     


  3. NoVaguy

    NoVaguy Senior member

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    Is this some kind of racket that paypal uses to squeeze even more money out of us?

    Yes.
     


  4. odoreater

    odoreater Senior member

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    Yes.

    Any reason why I wouldn't be able to just use the "send money" feature and send the money directly to the seller in US dollars? I'm sure the difference in exchange rates goes directly to paypal and not to the seller, so if I send it in US dollars, she can deposit the dollars in her account over there where they will be converted into pounds by her bank at the prevailing exchange rates (I think).
     


  5. NoVaguy

    NoVaguy Senior member

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    Any reason why I wouldn't be able to just use the "send money" feature and send the money directly to the seller in US dollars? I'm sure the difference in exchange rates goes directly to paypal and not to the seller, so if I send it in US dollars, she can deposit the dollars in her account over there where they will be converted into pounds by her bank at the prevailing exchange rates (I think).

    I don't think it works like that. The seller's account is most likely in pounds. so a conversion still applies. the only thing that will happen by doing it that way you'll be shorting the seller, since paypal most likely will take it off the top. i can't see why the seller would ever agree to that after contract formation.
     


  6. grimslade

    grimslade Senior member

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    I don't think it works like that. The seller's account is most likely in pounds. so a conversion still applies. the only thing that will happen by doing it that way you'll be shorting the seller, since paypal most likely will take it off the top. i can't see why the seller would ever agree to that after contract formation.


    Exactly. Paypal will still convert it to pounds at their rate. Unles the seller has a separate, dollar-denominated paypal account.
     


  7. odoreater

    odoreater Senior member

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    I don't think it works like that. The seller's account is most likely in pounds. so a conversion still applies. the only thing that will happen by doing it that way you'll be shorting the seller, since paypal most likely will take it off the top. i can't see why the seller would ever agree to that after contract formation.

    So you think that it's paypal who does the conversion, even if I send the money in us dollars?

    Man, that's such bullshit.
     


  8. von Rothbart

    von Rothbart Senior member

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    There're 2 Paypal currency exchange options if pay by credit card. One is to let Paypal convert the foreign amount into $US and charge that amount to your credit card. Another is to let Paypal charge the foreign amount to your credit card. Your credit card may charge you a foreign exchange service charge. So you have to calculate which option is the more advantageous.
     


  9. EL72

    EL72 Senior member

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    If the seller has a USD paypal account than you can send payment to him in that currency. Otherwise, there is no other option than to have paypal do the forex conversion.
     


  10. bengal-stripe

    bengal-stripe Senior member Dubiously Honored

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    There is no such thing as a free lunch. Everybody takes it profit. You find different prices for "buying" and "selling". Nobody sells you money for the mid-market rate. The profit is called "spread": buying and selling rate are on either side of the mid-market rate. Paypal has a spread of (I believe) 2.5%, so have virtually all credit cards. Bureau de change have usually a much higher spread.

    Here is the mid-market rate on xe.com
    http://www.xe.com/ucc/

    Here is the official VISA rate, giving you the opportunity to add the appropriate spread (bank fee):
    http://corporate.visa.com/pd/consume...r_ex_rates.jsp
     


  11. odoreater

    odoreater Senior member

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    There is no such thing as a free lunch. Everybody takes it profit. You find different prices for "buying" and "selling". Nobody sells you money for the mid-market rate. The profit is called "spread": buying and selling rate are on either side of the mid-market rate. Paypal has a spread of (I believe) 2.5%, so have virtually all credit cards. Bureau de change have usually a much higher spread.

    Here is the mid-market rate on xe.com
    http://www.xe.com/ucc/

    Here is the official VISA rate, giving you the opportunity to add the appropriate spread (bank fee):
    http://corporate.visa.com/pd/consume...r_ex_rates.jsp


    It's not really the fact that they do it that bothers me, it's the fact that they don't tell you that they do it. Paypal has a lot of "hidden fees" in a lot of areas. You want to send money? They hit you with a fee. You want to receive money? Fee. You want to transfer money? Fee. You buy something? Fee. You sell something? Fee. What makes it more annoying is that paypal is owned by ebay. So, they can't even give you a break and transfer money into foreign currencies for you for free, they have to take a fee on that too, and a nice one at that.
     


  12. aybojs

    aybojs Senior member

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    How about you just stop using PayPal and encourage people to do the same? I've boycotted it since I got screwed by them in a bad eBay deal, and the minimal delay in transaction speed caused by going without it has been more than compensated by the knowledge that my money isn't at risk to being drained by them, whether it be the product of their constant hidden charges, aggressive account-freezing techniques, non-existent customer service, etc.
     


  13. edmorel

    edmorel Quality Seller!! Dubiously Honored

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    It's not really the fact that they do it that bothers me, it's the fact that they don't tell you that they do it. Paypal has a lot of "hidden fees" in a lot of areas. You want to send money? They hit you with a fee. You want to receive money? Fee. You want to transfer money? Fee. You buy something? Fee. You sell something? Fee. What makes it more annoying is that paypal is owned by ebay. So, they can't even give you a break and transfer money into foreign currencies for you for free, they have to take a fee on that too, and a nice one at that.

    Actually, they do tell you at what rate they will exchange your money before you click on "send". It would be no cheaper gong through a bank.
     


  14. odoreater

    odoreater Senior member

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    Actually, they do tell you at what rate they will exchange your money before you click on "send". It would be no cheaper gong through a bank.

    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.
     


  15. ragdoll

    ragdoll Senior member

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    When you add it all up, it is no different that using a credit card that charges 3% to convert currency. I think Capital One only charges 1% but everyone else does and I doubt that they tell you if you don't ask or burrow through the fine print of their disclosures.

    You're hosed either way![​IMG]
     


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