Is PayPal Scamming Us?

[GP_Matt]

I was completing a purchase with Paypal today in US dollars. They automatically convert the purchase into Canadian dollars at the till so that you are billed in CAD.
The exchange rate was listed at 0.941 and there is a very small link below that to use other options. I clicked that and was given the option to complete the transaction in USD instead but was warned that their way was easy and safe and you knew what you were getting while letting my bank do the conversion was full of unknown fees and currency rate fluctuations and other scary things.

I selected the later option to let my bank do the conversion and completed the transaction in USD. MBNA billed me at a rate of 0.965 which is exactly 2.5% cheaper.

As it turns out for every PayPal transaction I have done in USD they are charging me a hidden fee of 2.5%.

[DownhillGoat]

Not sure how that's a scam. It's just what they charge to convert. Much like your CC will usually charge a lower rate than the bank will when changing cash across. Lots of point-of-sale machines will offer the same option (local funds or your home country funds), in which case the conversion rate is different as well.

[puckluck2]

Why would PayPal give you the same rate as the bank? Hardly anyone does that.

Also, how is it a hidden fee when you know the rate they're giving and you know how much the Canadian dollar is?

[sclitheroe]

Hey I found another weird scam - did you know, at a car rental place, if you let them fill the tank for you at the end, you pay _their_ rate for the gas, not what you can find at the pumps?

Weird or what eh

[topfiverecords]

currency spread

[FlamesFanStrandedInEDM]

The Scam with paypal is the fees to transfer your money in and out of a bank account.

[nickerjones]

Originally Posted by FlamesFanStrandedInEDM

The Scam with paypal is the fees to transfer your money in and out of a bank account.

I use paypal to transfer to and from my own bank accounts sometimes.

[WilsonFourTwo]

Originally Posted by topfiverecords

currency spread

Is it weird that phrase gave me a semi?

Sounds a lot more exciting than it is....the Google results were rather boring.

[Displaced Flames fan]

Originally Posted by FlamesFanStrandedInEDM

The Scam with paypal is the fees to transfer your money in and out of a bank account.

How is a charge of $0 a scam? How is a charge of $0 a fee?

Maybe this is only with Canadian bank accounts or something?

[Jedi Ninja]

Originally Posted by GP_Matt

omg, do not buy pop from the superstore liquor store. I bought four 2-litre ginger ales from superstore liquor store last night because i was too lazy to walk across the parking lot. Today i find out that they are a dollar each in the main store while i paid $2.49 for each. Thanks for telling me cashier person... Ass! Arrgh! I hate superstore!

fyp

[topfiverecords]

You lose 2.5-3% on exchange through a bank/credit card off whatever the actual exchange rate was at the time of transaction. I imagine the spread at Paypal is higher because they can set it at whatever they want.

[albertGQ]

I think grocery stores and retail outlets all have mark ups as well

OMG!!! A business wants to make a profit? The nerve of them!!!

[Jedi Ninja]

The government has all of the credit card service fees listed on a web site, and according to them all of the MNBA cards have a 2.5% service charge on foreign transactions. (See "spoiler" below.) And the XE.com rate for today is 96.7. You sure they didn't gross-up the amount billed to your credit card by 2.5% before applying the exchange rate?

Spoiler!

http://www.fcac-acfc.gc.ca/iTools-iO....aspx?lang=eng

[ken0042]

I have also seen some credit cards charge extra fees for currancy conversion. There was one card I looked at that charged $2 per conversion.

What I don't like is that eBay and Paypal are essentially the same company; however the rate used on eBay to estimate how much your purchase will be in Canadian dollars is different than what Paypal uses. So you will see something listed for $100 US, eBay says ($101.50 CDN), and then you do an instant purchase and Paypal charges you $106 CDN; after you have already committed to purchase.

[tvp2003]

I got an Amazon.ca Chase rewards Visa for the sole purpose that they charge 0% for currency conversions (as opposed to every other card I've seen which charges 2.5%). Use it for all of my purchases in USD (online and in the US). No annual fee and I get free amazon points to boot

[Ryan Coke]

Do they really use mid market rates though? Hard to believe that they do. If so I should get one...

[Ryan Coke]

Looks like it might be worth it, I might get one.

[Ashartus]

Could be worse - I had a US dollar transaction on my credit card that needed to be refunded (it was an erroneous charge), and they used very different exchange rates for the original transaction and the refund (processed a few minutes later) resulting in me losing several dollars. Basically paying the transaction fee twice because a hotel messed up on where a charge was going.