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Avoiding Paypal's Exchange Rate

odoreater

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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.
 

odoreater

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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?
 

NoVaguy

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

Yes.
 

odoreater

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Originally Posted by NoVaguy
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).
 

NoVaguy

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Originally Posted by odoreater
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.
 

grimslade

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Originally Posted by NoVaguy
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.
 

odoreater

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Originally Posted by NoVaguy
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.
 

von Rothbart

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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.
 

EL72

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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.
 

bengal-stripe

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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
 

odoreater

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Originally Posted by bengal-stripe
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.
 

aybojs

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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.
 

edmorel

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Originally Posted by odoreater
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.
 

odoreater

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Originally Posted by edmorel
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.
 

ragdoll

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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!
 

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