Why isnt paypal converting money at the current exchange rate?

March 9th, 2010 | by mon-ex |
money exchange
Fiyah! Canadian Beauty asked:


I just paid for something using paypal, im in Canada, and on paypals exchange rate they’re saying the candian dollar is at 95 cents. Its trading right now for 101.17 and hasnt been at 95 cents for a while, why isnt paypal current?

CLARA
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  1. 3 Responses to “Why isnt paypal converting money at the current exchange rate?”

  2. By MAC on Mar 10, 2010 | Reply

    I think they are always a few days behind, in their favor.

  3. By jargent100 on Mar 13, 2010 | Reply

    Could be a combination of things. A big part of it is this (from Paypal’s site):

    If your transaction involves a currency conversion, it will be completed at a retail foreign exchange rate determined by PayPal, which is adjusted regularly based on market conditions. This exchange rate includes a 2.5% spread above the wholesale exchange rate at which PayPal obtains foreign currency, and the spread is retained by PayPal. The specific exchange rate that applies to your multiple currency transaction will be displayed at the time of the transaction.

    So that’s part of it. They could also be using a different source for their exchange rates, which sometimes vary. Note that they are using the wholesale rates, which can differ from the retail exchange rates.

    Bottom line, they can charge whatever they want, so long as it’s disclosed. But that is a bit of a large spread you’re seeing, harder to explain.

  4. By Mark W on Mar 15, 2010 | Reply

    So they can make a commission?

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