I have paypal account. My base currency is AUD. I want to check the conversion rate for buying a stuff in USD. When I go to payment step they show the actual USD amount and actual AUD that will be taken and the actual conversion rate used for AUD to USD. But is there a way I can check the paypal's AUD to USD exchange rate with out going to the payment step?
PayPal does charge a premium, both for sending and receiving.
Here's how you find their rates:
- Log in to the "summary" page.
- Directly above the numerical amount of your balance are the words "PayPal Balance"
- Click on "PayPal Balance".
- A new window will open showing current balances of any currency that you have ever owned there. All of my money is in US Dollars but there are zero balances for British Pounds and Euros. For a while I kept foreign currency balances because you do not pay PayPal's premium to spend your own money but if you need to purchase another currency to pay for a foreign purchase you do. The only way that you obtain a currency balance to to be paid in that currency and instruct PayPal to leave it there rather than converting it to your home currency.
- Anyway, lowest on the new window is "manage currencies". Click on that.
- A new window will open. On the right side is "currency exchange". Don't know if this will work if you do not carry a balance in any currency. I enter $100.00 then select the currency that I want to find the exchange rate for.
- Click on "calculate".
- To find how much of your currency is required to buy one unit of the foreign currency, divide the above result into the amount of your currency that you started with. In my example $100.00 buys 75.35 British Pounds. Thus $100.00/75.35 = $1.33 to buy one British Pound.
The Paypal 'classic' site option has now been removed and you will not know what you will be charged UNTIL YOU COMMIT TO BUY. Paypal told me today ( brexit day 24th ) that their site is NOT connected to the Ebay site so when Ebay tells me '$77.00 approximately £52.43' for an item I would in fact pay £59.62. You will Not be aware of this UNTIL you commit to by. Paypal informs me there are no plans to restore the 'classic' option Paypal site.
fx-rate.net offers a AUDUSD exchange rate comparison, which includes paypal:
Transferwise $ 2.29
Worldremit $ 3.50
Xendpay $ 3.71
Tranzfers $ 5.52
Ukforex $ 7.35
Skrill $ 15.13 Paypal $ 25.77 Kantox $ 27.76
FYI, just found this (https://www.paypal.com/webapps/mpp/ua/useragreement-full#8) "8.9 Currency Conversion Currency Conversion 2.5% added to the exchange rate The Currency Conversion spread applies whenever a currency conversion is required to complete your transaction. The exchange rate is determined by a financial institution and is adjusted regularly based on market conditions. Adjustments may be applied immediately and without notice to you. When your payment is funded by a debit or credit card and requires a currency conversion, you consent to and authorize PayPal to convert the currency in place of your debit or credit card issuer. You have the right to have your card issuer perform the currency conversion and can choose this option during checkout on your transaction review page before you complete the transaction." 2.5%!! Can this be true?
I cannot speak for Paypal specifically and I doubt anyone who doesn't actually work on their internal automated payment systems could. However, I can speak from experiencing in working on automated forex transaction systems and tell you what many institutions do and it is often NOT based on live rates. There is no law stating an institution must honor a specific market exchange rate. Institutions can determine their own rates how and when they want to. However, there is some useful information on their website: https://www.paypal.com/an/cgi-bin/webscr?cmd=p/sell/mc/mc_convert-outside
"The most readily available information on currency exchange rates is based on interbank exchange rates. Interbank exchange rates are established in the course of currency trading among a global network of over 1,000 banks, and are not available through consumer or retail channels."
This leads me to believe they pull exchange rates from either Oanda or XE periodically and then use these rates throughout the day to conduct business. Paypal does not disclose who they use to determine rates. And it's highly doubtful they do this for every transaction (using live rates). Even if they did, there would be no way for you to check and be certain of a particular exchange rate as paypal states:
" Consumers may use these rates as a reference, but should not expect to use interbank rates in transactions that involve currency conversion. To obtain actual retail rates, contact your local financial institution or currency exchange, or check the rate displayed in your PayPal transaction."
This is partly because rates can change by the second just like stock prices or anything else which is susceptible to the open market's variables of supply, demand news events etc. So, even if you check the rates on Oanda (which you can do here: http://www.oanda.com/currency/converter/) you are not going to get a 100% accurate representation of what you would get by doing an exchange immediately afterwards from Paypal or any other financial institution. However, if you want to estimate, using Oanda's currency converter will likely get you close in most scenarios. That is assuming Paypal doesn't charge a premium for the exchange, which they may. That is also assuming they use live rates, it's also possible they only update their rates based on market rates periodically and not for every transaction. You may want to test this by checking the exchange rate on your transaction and comparing that to the Oanda rates at the same time.
There is a way I discovered of finding the current exchange rate before committing to buy, go to send payments, put in your own second email, pay 1gbp as the amount and it will give you the exchange rate and fees in your own currency, in my case euro, before you have to click on send payment.
August 2018: Here is what PayPal says about how to check the rate before sending the money:
Here's how to view our current exchange rate:
Start a money sending transaction. Click Details on the left side of the page
Click Manage currencies.
Enter the required information under Currency Exchange and click Calculate.
The exchange rate is displayed, and you can review it before you complete your payment.
Here’s how we set our exchange rate:
We receive a wholesale rate quote from our bank twice a day and add a percentage to determine the retail foreign exchange rate to apply to transactions that involve a currency conversion.
Our currency exchange rates are competitive with conversion rates used by banks and by currency exchanges.
When you withdraw money from your PayPal account to your local bank account, we automatically convert the money into the local currency at the time of the withdrawal request.
Whenever you pay or withdraw some fund from your account, paypal takes approx 3% of the current currency value along with the fees. i.e. If you are paying/withdraw 100 unit of US Dollars to British pounds and if the current convertion rate is 1$=0.82GBP, then consider reducing 3% of the actual currency rate. So, the approximate magnitude will be 0.82*97% (100-3=97) = 0.7954. So, 1$=0.7954GBP. This formula will not give you 100% accurate value but will help of course.