Review of PayPal's foreign exchange services and how their exchange rates compare to FX specialist providers, compare rates and check if you can save money when you send and spend abroad.
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The currency rates that PayPal offers is 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