As title states, essentially i found out that paypal uses bad exchange rates as hidden fees.
I wanted to buy something halfsies with a friend, them in US, me in EU, seller in US.
The total price was $193. My friend decided to send $100 rounded, paid $4.99 for sending to friends/family. I received €86.61, at an exchange rate of 1.1546 (€ to $, same below for consistency).
When i went to pay the seller, the exchange rate had "mysteriously" dropped to 1.0508, charging me €183.66 for the $193 total.
This is a 10.4% difference - so a chunk of the money that my friend paid simply disappeared into the "exchange rate", without mention of any fees.
Add in the $4.99 fee my friend paid and the $11 the seller pays on receiving the money (they're a smaller seller, communication about such things is easy), the total money paypal took on a $193 payment was $36 or 18.6%. Even disregarding the seller's fee for taking money, it's still a 12.9% markup for the privilege of using paypal, as currency conversion using their (apparently fake) numbers is mandatory.
How is it legal for paypal to charge 10%+ extra on top of the actual sum without mentioning any fees anywhere? I imagine if paypal accurately displayed how much money they take from transactions as fee, competition would be harsher on the company.
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