Can you explainn ref my previous thread Exchange Rates - repeated below:
I am in the UK, I have just been to withdraw from PayPal $290.00 into my UK Bank Account
The actual Live Exchange Rate was 0.713743 taken from the Web at http://www.oanda.com/convert/classic PayPal's Rate of Exchange was 0.6717, which results in a loss to me of £12.00 on top of their $1.50 transaction fee. Why is there such a high discrepancy in the exchange rates?
The reply I received from PayPal is as follows:
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Please note that the conversion rate is a variable rate, and is updated on PayPal daily.The global currency markets fluctuate daily, and the rate PayPal presents to users includes a small risk factor as well as a currency conversion fee in order to compensate for these fluctuations and costs associated with executing these transactions. The rate is a competitive exchange in comparison to retail conversion rates received at banks and currency exchanges. It is important to note that retail rates presented to consumers and displayed and used for your International Withdraw will differ from the rates you may see in the newspaper, on the internet, or on television. Published foreign exchange rates are often interbank rates, which banks charge each other for transactions valued at U.S. $1,000,000.00 or more.
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What a rip off. Comments please. Cheers to all - Dave
I am German and I have the same problem with their special currency conversion. And I am also quite dissapointed how the situation changed. At the beginning of Paypal it was possible for international customers to transfer funds from Paypal towards your credit card account for a fee of abt. 3%.
But now you have no other choice as to accept their "free of charge" funds transfer, but with their special currency conversion.
Paypal´s practices are for my opinion easily to explain.
It´s an attempt to charge additional money from international sellers for their services.
Although I am content with Paypal services
I try to avoid to get paid by Paypal for auctions with amounts exceeding $250, because that means to loose money.
Let me explain why: Let´s base on a $1000 final price auction. If I get a check from an US Customer I have to pay a checking flat fee of 30 DM and get a conversion app. 1% less than the daily currency exchange rate
f I cash this check at a German bank.
Based on todays exchange rate Euro(DM)/$
that would be abt. Euro 1,17.
So in this case I would get for my $1000 check Euro 1170 less abt. Euro 16 (checking fee) that is Euro 1154.
Using Paypal I would get :
$1000 less about abt. 2,5% Paypal fees $975
$975 x 1,1043 Euro = abt. Euro 1080
Is about $75 difference or about 7%!!!!
I know what I am talking about, because I cash every week a few US $ checks, so this is not hypothetical.
It is quite simple what that means, Paypal´s rate isn´t competitive with the major banks exchange rate.
But their statement is indeed correct, you´ll never get this exchange rate, noted in the currencies markets. But mostly the difference is about 1-2% but not the discrepancy (1,184 Euro versus Paypals 1,1043 of today noon) as they want you make you to believe in their statement. Ask anybody in your bank, even for cash which has the lowest conversion rate, you would get more as for the Paypal conversion.
But the problem is they can afford to do this because there is no strong competition.
Most online Payment services are´nt available for none US citizens.
And other payment services like VISA are also still quite expensive.
The only thing I could recommend to international seller´s is to establish an US bankaccount and to transfer Paypal funds free of charge to this account.
