I'm based in the UK and my UK buyer (Keighley, West Yorkshire) has his address country wrongly set to Malaysia. This changed the transaction fee from 3.4% to 4.9% because as far as PayPal is concerned it's an international transaction. Unsurprisingly, PayPal states this address as being unconfirmed - where was the error checking in their scripts though? All that is needed is correct pattern matching on the postcode based on the country selected. Not happy, but not sure what to do...
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