Warning: International Transactions Using PayPal

[tszabo]

I used eBay Australia to sell an item and I am from the U.S., and I ended up (unexpectedly) paying over 10% in fees!  Considering my item was selling for over $500AUD, this was a lot of money ($52 US dollars)!  In addition to the 3.8% in eBay fees, I paid 4% to PayPal (the 2.9% to accept any transaction and then a 1% cross-border fee), and then 2.5% with the currency conversion.  What a killing they are making! 

What really frustrates me is they are sneaky about the currency conversion fee and even lie by saying: "We use the most current exchange rate data" when they really are not but rather are taking a nice profit by not doing much.  If you call up then will tell you they make a 2.5% profit and they will not give you foreign currency any other way until they convert is and pocket more money.  Deceiving and unfair. 

PayPal is no better than the finance firms that are always cutting corners in the U.S. to make an extra buck by deceiving people or taking advantage with hidden and last-minute fees.  This greedy culture ultimately led to many legal and financial difficulties for these other companies, and perhaps PayPal is headed down that path. (after all, PayPal used to only charge a fee if you accepted payment with credit cards)  My vote for more regulation of greedy companies like PayPal!  (as well as more competition)

I will certainly not be using PayPal or eBay again for international commerce...

[surplusdealdude]

The 2.5% exchange fee is actually lower than most banks charge.

Whether you understand it, it DOES cost paypal money to exchange funds from one currency to another.  They're not about to eat the fees out of the little 2.9% that they charge for regular fees.

Everybody has to eat, bud - the sooner you learn that, the better.

[tszabo]

Granted, I do not know much about currency exchange, but my understanding is that currencies fluctuate based on supply & demand, and companies (or individuals) should have a means of exchaning currency at the current market rate, without someone profiting from it. 

What rubs me the wrong way is gradually discovering the fees more and more after the transaction.  If they don't want irate customers, they should be more transparent, and don't lie by claiming that they exchange money at the current market rate (which they claim when you want to withdraw funds into your own currency).  The fees should be much more clear upfront (without having to browse through the help section) so that sellers can make the right decision about whether it makes sense to use their service.

And if you think about it, it's not about "everyone has got to eat."  By eBay and PayPal taking over 10% (or $50 USD) on my one transaction, it's quite clear they are making ridiculous amounts of money as just the MIDDLEMAN.  Think of the thousands of transactions they have a day.  And it's not that one transaction has any significant incremental cost.  Once they have the automated software and systems in place, it's pretty much just a fixed cost.  Taking a chunk out of every financial transaction (similar to credit card companies) ends up being a tax that hurts this economy, without the benefit of the "tax" going to a worthy public cause.

While I think eBay and PayPal provide a valuable and innovative service, I strongly recommend they be more transparent and reasonable with their fees.  I believe they (especially due to their monopolistic partnership) are getting greedy, and I hope some serious competition arises sometime soon.

If you look around these message boards, you'll see I'm not the only customer frustrated with PayPal and its fees (particularly for international transactions).  This is not good for business.

[surplusdealdude]

companies (or individuals) should have a means of exchaning currency at the current market rate, without someone profiting from it.

Do you work for nothing?  No.  Neither do I.  Apply the same rules to Paypal.

They're performing a service.  They do it because they make money on it - the same reason that you sell stuff.

What rubs me the wrong way is gradually discovering the fees more and more after the transaction.

Well, you should have read the User Agreement, because Paypal lays out all of their fees in that. 

They're not hiding anything - it's just that most people don't bother to read the information that's right out there until they get into trouble.

The fees should be much more clear upfront.

I agree that they could insert calculations and report fees before the seller closed the deal.  BUT the system is already pretty slow sometimes and the extra calculations, multiplied by a million transactions a day, would slow it down to a crawl.  There are always tradeoffs.

Besides, there isn't a lot of evidence that it would do any good.  People complain loud and long about the 21 day hold and yet EVERY SINGLE ONE OF THEM was warned before they listed their item on ebay that it might be applied.

So paypal can't win, no matter what it does.

And if you think about it, it's not about "everyone has got to eat."  By eBay and PayPal taking over 10% (or $50 USD) on my one transaction, it's quite clear they are making ridiculous amounts of money as just the MIDDLEMAN.

ebay/paypal make about 20% profit on their businesses, which is on the low end for a tech company.  They've never been able to pay dividends to their stockholders and their stock price has remained in the low end for years and years.  It costs a lot of money to run the place.

Taking a chunk out of every financial transaction (similar to credit card companies) ends up being a tax that hurts this economy, without the benefit of the "tax" going to a worthy public cause.

That's a stretch - a tax is applied to everyone, whether they use the service or not.

ebay charges fees for use it it's service - period.  You can completely avoid the fees if you don't use the service.

Lots of other auction sites exist - over 500 of them.  They don't charge a lot in fees because they don't produce the sales.

You have to spend money to make money.

I hope some serious competition arises sometime soon.

Well, I've been hearing that for going-on 5 years now and it hasn't happened.  Some of the small sites ( like Bonanzle), that started out to 'save' ebay are now becoming more draconian in their policies than ebay ever was.  Amazon's policies are very clear - if they say it, you do it.  If you don't they give you the boot.

Most likely, any site large enough to take on ebay is going to be indistinguishable from ebay in their practices.

If you look around these message boards, you'll see I'm not the only customer frustrated with PayPal and its fees

Most of the people frustrated with ebay/paypal never took the time to learn the rules.

It's almost always someone blaming the company for mistakes they made themselves.

[kingpintwin]

surplusdealdude...

Justifying a lack of morality by comparing unethical business practices to another companies business practices is no way to justify a company policy (or an increase in fees).

It may make you sleep better at night but at the end of the day your are still ripping people off.

Your ideas (which are shared by most of the corporate world) are one of the many reasons this country has dug itself into a dangerous hole.

There is much more to life then profits!