I am obviously anoyed with PayPal - but I do appreciate your replies.
I have looked at (Fees are covered under the terms of use)and (Fee Schedule) and cannot see anything there reference the subject matter.
The following is copied from Sending & Withdrawing Funds: _________________________________________
SOURCE OF FUNDS...................Fee
International Transaction Fee
(Credit Card Payments only)--------2.6% + 30¢
PayPal Balance Payment-------------FREE!
Withdraw to International
Bank Account-----------------------$1.50*
Withdraw to U.S. Bank Account------FREE!
_________________________________________
1) The only fee that I need to pay is the $1.50*
2) There is nothing stating that you will adjust the Current Rate of Exchange to cover risk factors etc. (WHERE IS IT STATED?)
3) As I have said previously on a $290.00 transaction not only do you deduct $1.50 (no problem) but on top of that you adjust the current rate of interest in order to deduct a further £12.00 GB Pounds.
4) There is no clause in our original agreement to allow you to adjust the current rate of exchange and thus deduct further charges from myself - other than those stated above.
5) Further you give no information how you calculate the difference
6) Also it is not envisaged until one needs to make a withdrawal from their account.
7) You are in fact making up your own current rate of exchange without any clarification and applying it without prior notification.
8) Please would you explain further and direct me to any agreement that shows otherwise.
I am reporting the concerns over the differential.The information, and the pricing, provided on the web site is correct. (I have visited this issue several times with product and finance).
Our price is calculated, and has always been, based off of the retail rate we are paying from our vendor. The risk factor, as mentioned on the site, is also included in the pricing.
1) Where on PayPal's site is the Risk Factor mentioned.
2) How much is the Risk Factor in terms of dollars - say $1000.00.
3) On what basis is it derived.
4) What is the actual caculation.
I checked with my bank yesterday:
For a BidPay $290.00 Dollar Cheque, they would have paid:
($290.00 X .711)-(£6.50 Fee) = £199.69
Against PayPal's £194.00 + plus PayPal's $1.50 Transaction fee
About £6.00 difference in all.
My banks (£6.50 fee) remains static up to $1000.00 less on smaller payments and nill up to $25.00.
Where as the amount payable to PayPal above the Live Current Interest Rate increases proportionally to the amount transfered and on a $1000.00 transaction the difference would be £34.00 (including PayPal's $1.50 fee)
Quite a difference.
My main argument is that there is no reference that I can see that shows a PayPal user how they arrive at calculating this extra charge above the normal banks rate of exchange.
posted on June 21, 2001 11:53:11 PM new
Most financial institutions discuss abstract transfers in terms of the abstract rate, but actual transfers are done in terms of actual momentary rates, which themselves vary by size.
There is one abstract rate, offered to abstract buyers and sellers alike. Real rates are worse.
Also, while the risk on your transaction might have seemed insignificantly low, that's because someone else was accepting the risk.
posted on June 22, 2001 09:28:16 AM new
I think you missed the point, djcalc.
Commonly, if you ask a financial instition what their rate is for an abstract transaction, you'll get an abstract quote.
If you actually do it, you get a real result, which won't match the abstract quotation.
The 0.711 is not directly comparable to the real rate you received from PayPal. Real rates are identifiable, among other data, by being TWO rates, never one. The buy-sell spread plus the risk factor.
posted on June 23, 2001 05:14:51 AM new
Hi Roofguy
But how is that risk value calculated?
All I know is that on a $1000.00 PayPal transaction that risk factor will cost me £34.00 GB Pounds more, than paying the equivalent sum of $1000.00 via a customers USA cheque directly into my bank.
posted on June 23, 2001 09:30:29 AM newBut how is that risk value calculated?
It's calculated individually by each financial institution.
There are several components.
1. Time risk. Consider what happens in this kind of case.
a. Foreign funds received
-no delay
b. Domestic funds delivered
c. Foreign funds submitted for exchange
-delay
d. Domestic funds received.
There is a risk that the referenced delay will cost money.
2. Value risk
Between the beginning and the end of the above exchange, the value of what you have might decline with respect to what you need.
3. Fraud risk
There is a risk that the transaction might be fraudulent.
4. Other risk
Very rarely, other things go wrong. Clerical errors. Insolvency by some other financial institution.
Each financial instituion must evaluate these risks for themselves.
This is a real touchy point with me. The exchange rate to Canadian funds is extremly poor. Transactions on the same day with Billpoint and paypal very different rates. The Paypal rate is always a point or 2 worse than the Billpoint rate.
The exchange rate needs to be fairer for international customers. We pay a extra fee to transfer to our bank. The fee should cover this difference off. It does not cost any more to wire transfer to a Canadian Bank then a US bank.
posted on September 29, 2001 10:57:50 AM new
Naturally, Damon simply ignored djcalc's question permanently. I still can't find anything in the fee schedule that corresponds to what they write in their IPO Registration Statement about the currency risk.
"For withdrawals, we charge our international recipients a fee ranging from 1.5% to 2.6% of the amount plus $0.55 to $1.50 for each withdrawal from their PayPal accounts to local bank accounts. In addition, we charge a currency risk spread ranging from 0.8% to 2.9% of the withdrawal amount."
posted on October 1, 2001 02:35:40 AM new
Hi Djcalc,
I have brought this up before. Here is the situation that I encountered with an international funds transfer from paypal.
If you are an Aussie user, Paypal charges you 9.3% of your sale price to process your money. I recently was paid US$333 by a customer.Straight up paypal took US$10 then a further US$1.50 for sending the money to my bank account. However the kicker is that they did the currency conversion at 1.81672 when the current rate is 1.9357. This works out as follows. US$333x 1.9357 =AU$644.59 After paypal fees and charges $321.54 x 1.81672=AU$584.14. This is a fee of AU$60.45
OUCH!
Zircon4
posted on October 1, 2001 10:57:43 AM new
Hi loggia,
I have answered the concerns to the best of my ability. I have also addressed the rate of exchange concerns for our users to our international product development/policy team. It is not an item I can change, but I have given the best explanation I can on it.
