Currency Conversion

[aklinz]

UNBELIEVABLE !  Not only does PayPal extort large "user fees" on every transaction, they are currently adding a 8% surcharge on Canadian users !   By this, I mean the fact that PayPal currently values the Canadian dollar at 94 US cents.  EXCUSE ME ????   The bloody Canadian dollar has been at 1.02 (or above that) for over a month !  At what point are you going to "get with the program" and actually adjust your currency values ?  Maybe a year from now ? I will simply refuse to use your fraudulent company from now on ! 

In disgust,

Andrew

P.S.  With policies like these, no wonder why the rest of the world hates Americans !

[DoorToDoor]

The US to Canadian exchange rate on PayPal is unacceptable. You can't support that size of a spread between the bank exchange rate and PayPal. If this does not improve, I'll move my US transactions to another medium.

[knacker]

i've been waiting for almost a year for them to "correct" this. the exchange rate, however you account for it, is outrageous. paypal is simply stealing its canadian customers' money. i'm looking for another way to send money that doesn't involve being punished for having canadian dollars. i want google checkout on ebay! or else maybe i just stop using ebay...so sick of this crap!

[fitbidder]

DoorToDoor,

What do you find unacceptable about Paypal's exchange rate? What does your bank offer?

Numbers, please.

[inpath]

Current PAYpal Exchange rate:

1 USD = .939919 CAD

Just checked with my Canadian Bank and the Exchange rate is:

1 USD = .9932 CAD

That works out to a PAYPAL rip off of $0.0533 per dollar

Yes, it is time they fixed this issue.  Getting very fed up with being gouged like this.

[fitbidder]

Inpath said:

Current PAYpal Exchange rate:

1 USD = .939919 CAD

Just checked with my Canadian Bank and the Exchange rate is:

1 USD = .9932 CAD

Wrong.

Once again, someone is confusing CAD/USD with USD/CAD. It is time these people tried to understand basic math and the distinction between the client buy rate and the client sell rate.

http://scotiabank.com/rates/fxrates.html

Paypal's USD/CAD and CAD/USD exchange rates are right on the money and competitive.

Read through this thread and educate yourself on the basics of FOREX.

[CultureOfOne]

fitbidder: Wake up!  This isn't about the difference in client buy and sell rates.  At the very beginning of this thread (page 1), the administrator chimed in on this issue.  I quote:

"I can certainly understand the confusion - the rate you are shown is based off of the rate given to PayPal by our bank (updated twice daily,) but it also includes a 2.5% fee worked into the spread to pay for the cost of the conversion.  That's why you see the difference that you do and why the rate doesn't match up against whats being published in the papers or at other online sites.  Those rates are also for large banks or entities moving millions of dollars at time - versus on demand and small funds conversion rates."

PayPal doesn't bother officially telling people what the conversion fee is (hence why everybody ends up complaining here).  It's buried pages deep in the fine print, but the actual rate isn't listed, just a reference to an unspecified fee, assuming you dig through multiple links to get to it.  Instead of being up-front about charging 2.5% extra, they disguise it as part of the exchange rate, thereby inflating it, trying to make it look as if it's out of their control.  If there was an official warning that all currency conversions carry a 2.5% fee - a very simple thing to do as part of the checkout process - we wouldn't have grounds to complain, but instead they're trying to hide it in the conversion rate, betraying a serioius lack of business ethics.  What's more, eBay doesn't use the same conversion rate, even though owned by the same people. As a result, buyers are surprised by the fact that their final bid bears little resemblance to their bill.  Other online businesses could be excused, eBay cannot.

The real issue here is the idea that PayPal is claiming to be incurring any cost by converting currencies.  There should be no additional cost to PayPal, as it should be taken care of in the rates quoted by their bank (as it is for everybody else in the world, and as shown in your ScotiaBank link).  The 2.5% tacked on is pure greed, as a service fee, i.e. PayPal is charging us for the convenience of converting the currency for us.  That would be fair if they offered us the alternative of allowing our banks to do the conversion instead, but they're forcing us to use PayPal for conversion so they can **bleep** us for 2.5% more profit, all the while claiming that you can make a payment via PayPal without fees - a blatant case of false advertising, if ever there was one.  This is an unacceptable business tactic, and why I no longer use PayPal for transactions in other currencies.  I do it directly through my bank and save 2.5% off the top (not to mention getting a better exchange rate than PayPal's bank is supposedly offering).  This occurs with all currency conversions, not just CDN-USD conversion (see my earlier posts).

So fitbidder, the proof is there, offered up by more than one user.  Stop treating us like we're all idiots and claiming that we don't understand the math!

[fitbidder]

CultureOfOne:

The 2.5% fee is stated up front and is in line with any Candian chartered bank's 5% buy/sell spread. Not only does Paypal tell you what you will get in real, final dollars before you initiate the conversion - their online FAQ clearly states that it includes a 2.5% fee:

--- SNIP ---

Where can I find PayPal's currency exchange rates?

Here's how to view our current exchange rate:

1. Log in to your account.
2. Click Profile near the top of the page.
3. Click My money.
4. Click Currencies next to PayPal balance
5. Enter the required information under Currency Exchange and click Calculate.
6. The exchange rate is displayed, and you can review it before you complete your payment.

Here’s how we set our exchange rate:

• We receive a wholesale rate quote from our bank twice a day and add 2.5% to determine the retail foreign exchange rate to apply to transactions that involve a currency conversion.
• Our currency exchange rates are competitive with conversion rates used by banks and by currency exchanges.
• When you withdraw money from your PayPal account to your local bank account, we automatically convert the money into the local currency at the time of the withdrawal request.

--- SNIP ---

Perhaps this is the crux of your problem:

You said: "There should be no additional cost to PayPal, as it should be taken care of in the rates quoted by their bank"

As Paypal states above, they use the wholesale rate quoted by their bank. They don't use their bank's client buy or client sell rate. Or more succinctly, Paypal is a FOREX broker, they don't use "their bank" for FOREX transactions. The 2.5% fee is added to the wholesale rate - this explains why Paypal and Canadian bank client buy and client sell rates are more or less identical.

Let's go over the numbers as of this AM:

http://scotiabank.com/rates/fxrates.html

1. What's the buy/sell spread at the above link? (hint: it's a bit north of 5%)

2. Now, what's Paypal's buy/sell spread? (hint: it's about 5%)

3. Most importantly, are the actual rates themselves in close agreement?

For the answer to 3, let's take a closer look. As of this AM:

USD/CAD at Scotia = $0.9445. This client sell rate includes the fee.

USD/CAD at Paypal = $0.9536. This client sell rate includes the fee.

Now...who has the better client sell rate? Would you like a couple screen-caps from both sites?

So...do you really think your bank is charging you less?

If you still feel cheated, take it up with your MP. Charging 2.5% for FOREX transactions is not a Paypal-specific issue.

[CultureOfOne]

Sorry - premature post, I have edited:

You say "the 2.5% fee is stated up front..."  I guess it's semantics; "up front" to me means, "at the time of the transaction," not buried in the fine print or 5 pages into my PayPal account.  Thanks for clarifying, though - good to know where this is for future reference.  On that note, please send a link to this FAQ item; a search for the exact quoted phrase "Where can I find PayPal's currency exchange rates?" doesn't turn up this tidbit of information, and I would like this info to be available more readily to all posters.

For the record: maybe you should call my bank and tell them they're not charging me enough, because they've consistently given me a better rate than PayPal (or, apparently, ScotiaBank)!  I've already shown in past posts on this forum (using specific transaction examples) that I get at least a marginally better rate direct from my bank on my credit card than I do from PayPal.  Until they drop their conversion fee or allow me to let my bank convert, I have no use for PayPal as a buyer.

Oh, and if I may make a suggestion: last I checked, grade three math barely began to cover decimals (stopping at adding and subtracting them), and doesn't usually get into multiplying them, nor does it deal with percentages; all of that is introduced in grades 5 through 8.  So, unless you're teaching a surprisingly advanced grade three math class somewhere, I'd suggest you stop using that phrase.  It does come across as condescending.

[fitbidder]

Yes. It's possible that you are mistaken. But don't take my word for it...look it up for yourself. Or better yet, see my previous post. You can even Google it.

As far as your bank is concerned, it would help if you could post a link to your bank's client buy and client sell rates.

[fitbidder]

CultureOfOne said:

"Oh, and by the way: last I checked, grade three math barely began to cover decimals (stopping at adding and subtracting them), and doesn't usually get into multiplying them, nor does it deal with percentages; all of that is introduced in grades 5 through 8.  So, unless you're teaching a surprisingly advanced grade three math class somewhere, I'd suggest you stop using that phrase."

Yeah, you're right. I'll stick to the "simple math" phrase from now on...