Hidden 2.5% Currency Conversion Fees make huge money for financial institutions, including PayPal.
This is the dirty little banking secret used by every bank, every credit card, and PayPal EVERY TIME there is a currency conversion: They are automatically adding a hidden 2.5% currency conversion fee to your transaction, thus your ACTUAL conversion rate is always 2.5% higher than the rate published anywhere, including the web, newspapers, TV, eBay, etc. It looks like bait and switch because the fee is hidden.
What's the exchange rate on that purchase anyone might ask? $1 CAD to $1 USD is what might be currently published everywhere, including automatic price conversions displayed on eBay, but when it comes time to complete that purchase you are actually charged $1.025 CAD.
The same holds true when withdrawing funds from a 'foreign' PayPal balance to your local currency bank account: When the currency exchange is published worldwide at $1 CAD to $1 USD, and you withdraw $1 USD into your Canadian bank account you will only receive 0.975 CAD in your bank account, because PayPal has scooped a hidden 2.5% currency exchange fee.
You have to search hard for it, but hidden away in PayPal's help it does state: "Payments requiring a currency conversion include a 2.5% fee".
PayPal is not unique in this as all credit cards and banks also include a hidden 2.5% currency exchange fee every time they perform a currency conversion.
Hope this helps.
Ian
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