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How expensive are PayPal Exchange Rates?

We Compare PayPal's foreign exchange services and Compare how expensive their exchange rates are relative to FX specialist providers.

The currency rates that PayPal offer are competitive with most multi-currency credit card transactions, in which Visa or MasterCard charge a 1% spread above their wholesale exchange rate, and the card-issuing bank typically charges an additional spread of 1-3%.

PayPal seeks to keep its foreign exchange rates competitive with credit card transactions and transferring money via banks however they are not competitive when compared to specialist on-line payment service providers such as OFX or the other FX currency converters for your country as featuring on our best rate foreign transfer calculator.

PayPal can handle payments between the following currency pairs :


Whenever you use PayPal to transfer money from one currency to another you will be charged a currency conversion fee.

The rate will be figured at the time of the conversion in any of the following cases :

  • If funds are transferred from one balance to another in an account, the exchange rate will be calculated and presented during the conversion
  • If a payment is sent in Pounds Sterling using a credit card denominated in U.S. Dollars, the exchange rate will be calculated in the Send Money flow
  • If a payment is sent in Euros and the receiver accepts the payment and converts it to U.S. Dollars, the exchange rate will be calculated before the total amount is credited to the account balance

PayPal is not a currency dealer and therefore must purchase foreign
currencies from its bank. PayPal receives a quoted wholesale rate from
its bank [twice a day], and adds a 2.5% spread above this rate to
determine the retail foreign exchange rate that is applied to customers
who make a transaction that involves a currency conversion (such as a
payment in Euros from a U.S. dollar balance), or a withdrawal of dollars
by a U.K. user to his local bank account (the dollars must be converted
to pounds sterling before withdrawal).

If you click the link “Conversion options” on the Review Your Payment page, you will get a page that explains that you have two options for being charged for a currency conversion. The two options are:

  • The PayPal currency conversion process – as described above
  • The MasterCard and Visa currency conversion process – you will get the exchange rates negotiated between your credit card provider and your bank
Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product.

4 Reviews for “How expensive are PayPal Exchange Rates?”

  1. Avatar Eldensmica says:

    Very informative article about PayPal. I just read that PayPal will shortly stop serving Turkey due to regulatory restrictions.

  2. Avatar Bren says:

    Yesterday I received a very large sum in GBP and PayPal converted it to AUD, they converted it at the following rate:

    PayPal Exchange rate:
    = 0.675525 British Pound

    This site says:
    1 Australian Dollar = 0.647325 British Pound

    There’s quite a difference and when it involves a large sum of money it adds up I wish I’d found this site sooner!

  3. Avatar eurocanook says:

    The 2.5% commission PayPal charge is applied when you receive a payment in a currency for which you don’t maintain a balance in your paypal account. For example you receive CA$ and you accept this payment but directly converted in US$. On the other hand if accepting the payment in CA$ and changing it in US$ then the commission is higher, or at least the exchange rate is different, so you finally pay them a higher fee.

    The best way is to only deal in your local currency. And open and close foreign currency balances accodring to your needs. Be aware that if you’ve several pending payments in one currency and that you open a balance in this currency paypal will automatically accept all pending payments.

  4. Avatar mshore says:

    Hate to say it but Paypal is not your friend on international exchange rates, and they are never going to be. They use their own calculations and take a percentage of the transfer. If possible, get the money out in the original currency and use a bank to switch it to local funds. Obviously this means using Paypal won’t often work for you.

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