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 !

[edge30]

the same problem here. I paid US$984 and PayPal charged almost $1000 to my CC. The same day, less than 1 hour difference,I bought another item from another company for US$ 585 and paid directly with my CC. The CC charged me $553.5 (this alrady includes 2.5% fee for the CC). So, PayPal is making big bucks just for the exchange rate.

[CultureOfOne]

I agree.  The PayPal exchange rate is entirely unacceptable.  The Canadian dollar has been worth more than the US dollar for an extended period of time, and it's as if they're still charging 2009 currency exchange rates.  I can think of no reason why they can't let the bank handle the currency exchange and perform their transactions in US currency.  This is a matter of pure greed, and all it's doing is convincing me and other Canadians to stop using PayPal for purchases and opt to use our credit cards instead. 

So, step up to the plate, PayPal.  Explain to your non-US customers why you feel it is appropriate to bilk them out of their hard-earned cash under the guise of a currency exchange when you're already earning money off of the transaction.  We deserve an honest answer.

[fitbidder]

Paypal isn't ripping anybody off. You just don't understand the basics of currency conversion.

You just need to apply this simple logic to your situation:

The CAD is worth more than the USD...so USD$1.00 buys CAD$0.975, right? That's the same as saying that CAD$1.00 buys (approximately) USD$1.025.

So USD/CAD = $0.975...and CAD/USD = $1.025.

When you exchange from a weak currency (USD) to a strong currency (CAD), you receive a lower amount in the stronger currency. Then apply the industry standard 2.5% exchange fee and you're closer to USD/CAD = $0.975 - $0.025 = $0.950.

Again, the stronger the CAD$, the less in CAD$ you receive when you sell USD$. You benefit numerically in the OTHER direction when you buy USD$.

The 2.5% fee is an industry norm. It's the same exchange fee charged by ALL Canadian chartered banks. Here's an example from ScotiaBank:

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

Notice how the buy and sell rate spread is about 5%. That's 2.5% each way. Currency exchange is not a charitable service. Paypal is only charging the same rate as chartered banks, and their exchange rate is up to date and competitive.

[camster]

Well I just received a 697 US payment and because the Canadian Dollar is around 2 percent more than the US dollar I figured AFTER paypal takes there 2.5 percent exchange rate. The amount would end up about the same to around 695 Canadian.

But of course this is just simple logic and PayPal does noit work that way. Instead I've had a whopping 30 dollars skimmed off.Thats about 5 percent and with the Canadian dollar being around 2 percent more thats a total of 7% !!!!!

And thats AFTER all the other fees. Sorry PAyPal but you can use numbers and percentages and comparisons all you want. The bottom line is YOU ARE RIPPING PEOPLE OFF. Its time to start looking for an alternative.

[fitbidder]

People continue to confuse CAD/USD and USD/CAD.

Once again, here's the simple grade 3 logic and math for you:

The CAD is worth more than the USD...so USD$1.00 buys CAD$0.98, right? That's the same as saying that CAD$1.00 buys (approximately) USD$1.02.

So USD/CAD = $0.98...and CAD/USD = $1.02.

When you exchange from a weak currency (USD) to a strong currency (CAD), you receive a lower amount in the stronger currency. Then apply the industry standard 2.5% exchange fee and you're closer to USD/CAD = $0.98 - $0.025 = $0.9550.

Again, the stronger the CAD$, the less in CAD$ you receive when you sell USD$. You benefit numerically in the OTHER direction when you buy USD$.

The 2.5% fee is an industry norm. It's the same exchange fee charged by ALL Canadian chartered banks. Here's an example from ScotiaBank:

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

Notice how the buy and sell rate spread is about 5%. That's 2.5% each way. Currency exchange is not a charitable service. Paypal is only charging the same rate as chartered banks, and their exchange rate is up to date and competitive.

Now...for your specific case TODAY using this weekend's spot exchange rate:

CAD/USD = 1.0208, so USD/CAD = 1.0000/1.0208 = 0.9796.

With the standard 2.5% fee, CAD/USD = 0.9796 - 0.0250 = 0.9546.

So $697x0.9546 = $665.35. That is about a $30 difference, so Paypal has not ripped you off in any way, shape or form.

[fitbidder]

People continue to confuse CAD/USD and USD/CAD.

Once again, here's the simple grade 3 logic and math for you:

The CAD is worth more than the USD...so USD$1.00 buys CAD$0.98, right? That's the same as saying that CAD$1.00 buys (approximately) USD$1.02.

So USD/CAD = $0.98...and CAD/USD = $1.02.

When you exchange from a weak currency (USD) to a strong currency (CAD), you receive a lower amount in the stronger currency. Then apply the industry standard 2.5% exchange fee and you're closer to USD/CAD = $0.98 - $0.025 = $0.9550.

Again, the stronger the CAD$, the less in CAD$ you receive when you sell USD$. You benefit numerically in the OTHER direction when you buy USD$.

The 2.5% fee is an industry norm. It's the same exchange fee charged by ALL Canadian chartered banks. Here's an example from ScotiaBank:

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

Notice how the buy and sell rate spread is about 5%. That's 2.5% each way. Currency exchange is not a charitable service. Paypal is only charging the same rate as chartered banks, and their exchange rate is up to date and competitive.

Now...for your specific case TODAY using this weekend's spot exchange rate:

CAD/USD = 1.0208, so USD/CAD = 1.0000/1.0208 = 0.9796.

With the standard 2.5% fee, CAD/USD = 0.9796 - 0.0250 = 0.9546.

So $697x0.9546 = $665.35. That is about a $30 difference, so Paypal has not ripped you off in any way, shape or form.

[dwnkei666]

Ok then please xplain why when i just bought an item for $166usd

paypal charged $166.77cnd,time to take my paypal/ebay shopping

somewhere else.

[fitbidder]

I'd be glad to. Your transaction is in the opposite direction.

Did you look at the ScotiaBank rates for comparison?

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

Here's the grade 3 math for all possible transactions between USD/CAD and CAD/USD using today's approximate exchange rate:

CAD/USD = 1.0250

1. CAD/USD + Fee = 1.025 + 0.0250 = 1.0500. To buy $1.00CAD, you pay $1.05USD.

2. CAD/USD - Fee = 1.025 - 0.0250 = 1.0000. To sell $1.00CAD, you get $1.00USD.

USD/CAD = 1.0000/1.0250 = 0.9750

3. USD/CAD + Fee = 0.9750 + 0.0250 = 1.0000. To buy $1.00USD, you pay $1.00CAD.

4. USD/CAD - Fee = 0.9750 - 0.0250 = 0.9500. To sell $1.00USD, you get $0.95CAD.

The two most common scenarios for us Canadians:

a) When you transfer your USD balance to a Canadian bank account (sell $USD), use 4.

b) When you pay for a USD purchase with Canadian dollars (buy $USD), use 3.

[dwnkei666]

Best you rewrite grade 3 math line as it is condesending,bottom line is paypal loses Canadians.

nothing **bleep** us Canadians  more then dishonesty,i suggest paypal address this issue directly too Canadians,

now heres the only math paypal needs to know on this issue;it is easier to keep a customer then it is to replace one.

[fitbidder]

dwnkei666,

As an added courtesy, here a a few things for you to ponder:

1. It's simple grade 3 math - that's a fact, not a reproach. Sometimes it helps to point out how simple a concept really is.

2. I went to the trouble of clearly and concisely explaining the exchange fee concept for you and providing a competitive example. You should be thankful, not bitter. By now, you should also understand that you will not get a better rate elsewhere.

3. You persist in criticizing Paypal and pointing to their dishonest exchange practices. Do you extend this criticism to all Canadian chartered banks? To all FOREX institutions at large?

If Paypal is being dishonest and ripping Canadians off, perhaps you could provide a more competitive exchange rate example from a Canadian chartered bank. I've provided several examples throughout these threads...but they're not more competitive.

[CaygeonDave]

Since eBay and PayPal are one, perhaps eBay should stop showing that an item is $x.xx USD and in italics showing a lesser price in CDN.

I see and understand the grade 3 math (and you must work for PayPal) but I can't understand buying an item a couple of months ago and the end price to me was less in CDN, yet for the last two purchases the end price was more.

When using my credit card I would prefer for the card company to make the exchange conversion. With the vendors overcharging for shipping, it all makes a person wonder if buying from eBay is really worth it.