PayPal Steals from Its Customers with Hidden Fees

PayPal is stealing from its customers with hidden fees.

PayPal is stealing from its customers with hidden fees.

PayPal is used by millions. You can pay for pretty much everything from dollhouses and jumping castles to real apartments with it.

And if you run a small business, especially online, you’re going to at least consider using it to process payments because PayPal’s fees seem very reasonable.

It’s easy and free to set up. It works in most countries on this planet (I hear they’re expanding to Mars, too). And it gives you enough options to run a small business.

The transaction fees are also smaller than what you’d pay for similar services with most other companies.

But, if you look closely, and if you tally up the hidden fees, the real PayPal fees aren’t as favorable as they seem on the surface.

Simply put, PayPal steals from its customers.

Edit: PayPal has made some updates to the visuals. My point still stands, though: PayPal doesn’t provide a receipt for the charges—and that amounts to stealing (or maybe it’s “fraud” or some other legal term).

“Free” just means they don’t tell you how much they’re stealing

Transferring money to your personal or business bank account by withdrawing from your PayPal account should be free—at least it’s marked as “free” everywhere you’re likely to look.

Note that since I live in Finland, some of the screenshots might look slightly different from what you’ll find.

PayPal's "fees" page

PayPal’s “fees” page

PayPal's "withdrawal fees" page

PayPal’s “withdrawal fees” page

Even when you click “withdraw” in your PayPal dashboard to make a withdrawal, the screen tells you it’s “free.”

PayPal's withdrawal page

PayPal’s withdrawal page

The information states that “additional bank fees may apply,” but that refers to fees imposed by your own bank. PayPal is clear that “withdrawing from your PayPal balance to your bank account” is free on their side.

But that’s a lie.

“Latest exchange rate” and other fairytales

When you make a withdrawal from one currency to another (in this example from USD to EUR), PayPal uses “the most current exchange rate” to make the conversion.

Or so they say.

This also applies if your customers pay with a currency other than your primary currency.


At the time of the withdrawal in the screenshot above, the actual exchange rate was 0.7551 rather than the stated 0.7331 (according to Google, Bloomberg, and Yahoo Finance). The difference, 2.5%, might seem small, but it adds up quickly.

I can understand the difference if they were just a little late with the exchange (a few hours maybe), since rates can fluctuate rapidly. But the exchange rate hasn’t been so low as PayPal claims in six months.

So much for “most current exchange rates.”

I make withdrawals almost every day, so I never lose too much with one withdrawal. But still, even from just this one withdrawal, PayPal stole 34.44€/$45.62.

At the time of this writing, that adds up to $5.000–$10.000 a year depending on how many of my transactions go through PayPal.

So, what does PayPal say to this?

“The total cost through PayPal [for currency conversion] is usually less than many international multi-currency bank transfers.”

A “currency conversion fee?”

If you dig deep enough, you’ll find a mention of it. But I’ll bet very few PayPal users ever notice it because it’s buried in the 23,000-word legalese-laden user agreement.

But okay, it’s there, and when I set up my PayPal account, maybe I ticked the box indicating I accepted the agreement. Or maybe it was ticked for me, and I didn’t notice.

However, standard business practice includes providing a receipt of fees charged for services rendered—even if the business tries to hide the charge.

If there’s no receipt, it didn’t happen. Right?

You’d think PayPal would provide a receipt for the fees they charge. Or at least note them somewhere in your account, so you can calculate those fees in your expenses or provide them to your accountant.


After 14 emails and a phone call, a PayPal service rep told me, “We don’t provide receipts or anything else you could use in accounting for those charges. We also won’t provide them to you separately.”

They did, however, offer to create an Excel sheet for me that calculates the amount of the fee. As if I can’t calculate 2.5% of the sum or compare the real exchange rate to the one they use.

And they take this one step further.


Receipt of a Withdrawal made from PayPal

You actually do get a receipt when you make a withdrawal.

Here you can see that the fee for the withdrawal is 0€ (which equals $0 no matter the exchange rate).

Maybe you’d then hope that the receipts for the currency conversion would specify the fee. They even give you two of those—efficient aren’t they?

Not a chance.

There’s no way you can deduct those currency conversion charges in your bookkeeping.

And because of that, PayPal is literally stealing from everyone who uses their services when currency conversion is involved.

It’s nice that they called to apologize.

But let’s face it: they called to apologize for stealing from me and told me they’ll keep doing it.

And as a solution, they offered to help me calculate just how much they’re going to steal.

As far as repenting goes, that’s not too convincing. I’d be more likely to trust a drunk proclaiming he’s got the solution for world peace than PayPal doing something about this problem in any timely manner.

How to protect yourself from PayPal’s stealing

EDIT: I thought I had a solution. But it turns out PayPal has blocked the way to bypass the currency conversion fee—even when there’s absolutely no reason to make a currency conversion.

My idea was to open a currency account in your bank for each currency you handle through PayPal and withdraw the funds to those currency accounts without a conversion.

You’d still pay your bank for currency conversion (I would’ve paid 1.9€ per withdrawal, which is peanuts compared to how much PayPal is stealing from me).

But PayPal has blocked this option.

I checked that the idea works with my bank and PayPal. Both clearly stated there’s no problem, and I have that on writing.

But when I tried to do it, I got an error message from PayPal. And after some more emails, they informed me that they just won’t send USD to Scandinavia.

That’s exactly what I first had asked them to confirm. Twice.

One of the basic features of PayPal is the ability to accept and move any currency you want all around the world. But when it would stop them from stealing from you, it’s blocked.

It’s not that they couldn’t do it. Obviously they could—it’s their business to move money around the planet.

They just rather steal from their customers. And they’ll keep doing it until someone makes big-enough waves about it and the mainstream media notices. So far, no luck.

I’m switching to a custom integration between InfusionSoft and a Finnish payment processor. Maybe you should do something similar?

I don’t usually write about the financial side of business.

But I know many of my clients use PayPal and are probably facing the same situation that I have dealt with. So, this exception seemed to be in order.

If you know someone who uses PayPal, let them know about this. They might be losing thousands every year.

And if you’re building a business, take a look at this 5-step system that helps you figure out what makes people pay attention to you, join your email list, and ultimately buy your products or hire you.

READ before you comment…

Apparently many people don’t bother to read the article before commenting, so here are answers to the most common comments like that:

  1. “You can tell PayPal to charge you in the original currency…” This has nothing to do with the topic of this article. This article is about withdrawing money to your own bank from PayPal.
  2. “They have the right to charge a currency conversion fee…” Yes, of course. I’m not disputing that. But they should not hide it—and they should give you a receipt of such a charge.
  3. “They don’t charge for the conversion, they just use their own conversion rate…” That’s not true. They do mention the charge if you read deep into the agreements. It’s not just an unfavorable conversion rate—they specifically charge you extra.
  4. “Everyone charges for currency conversion…” Yet again, that’s not my issue. My issue is the lack of a receipt for the charge.
  5. “eBay…” This article has nothing to do with eBay or the collaboration between PayPal and eBay.

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  1. Well that’s something!

    Being a Canada-based merchant taking orders in USD, I guess Paypal is stealing from me, too.

    Thanks for that info,


    • Peter Sandeen said:

      Hey Etienne,

      Yep they are. That is, if you withdraw money to a bank account for Canadian dollars…


      • Actually, I’m a Canadian and I used to share your belief that Paypal was ripping me off. I was also frustrated that I couldn’t transfer my US balance into my US$ account in Canada. SO, one day I went to the US, and I opened a bank account. From that point, I started withdrawing my Paypal funds directly into my US account, then making the transfer to my account in Canada—still in US dollars. From that point, I would convert the funds, so it was my own bank doing the currency exchange. And guess what: The fees were HIGHER than what Paypal had previously been charging to convert my money. So their claim that “The total cost through PayPal [for currency conversion] is usually less than many international multi-currency bank transfers” is actually true, my friend. I’m not a lover of Paypal and I’ve had my issues with them. This isn’t about defending them. I just think your rant is based on the assumption that the fees are higher, and you haven’t actually compared the fees in reality as I did. Peace and best wishes.

        • Peter Sandeen said:

          Hey Rachel,

          I know that the rates are easily higher in international bank transfers. That’s not the point of the article.

          When they charge a currency conversion fee, they should provide a receipt of the charge. That’s what I tried to say 🙂


          • No, that’s not what you tried to say. You’re very blatantly trying to say that they rip people off. I just checked today’s exchange rate at my bank. They are offering me 1.099 for every US dollar. At the exact same moment, Paypal is offering me 1.1099. That’s more than my bank. Meanwhile, the bank of Canada is quoting 1.138. My bank is taking more money from me, and they are NOT explaining the rate discrepancy either. Please balance your article with facts.

            • Peter Sandeen said:

              Hey Rachel,

              My point still isn’t that their currency conversion rate would be inaccurate or that they couldn’t charge a fee for the currency conversion. I also have no opinion about your bank.

              My point is simply that if they charge a currency conversion fee (or any other fee), they should provide a receipt of it. And they shouldn’t hide the fee. If you don’t agree, no problem.

              Also, bank fees differ greatly. I just converted about $10,000 to euros a few days ago, the fee was 1.9€ (or something like that). Banks have different fees—not the point of this article.

              All the best,

  2. […] PayPal is stealing from its customers with carefully hidden fees (with no receipts). You can lose thousands of dollars a year if you don't protect yourself.  […]

  3. JeF said:

    How come I didn’t see anybody talking about that before ? Now that the world is so small, everybody / every company with a Paypal account is concerned.
    Thank you for the report of your investigations !

    • Peter Sandeen said:

      Hey JeF,

      I guess most people in the States don’t have this problem because it only comes up with the currency conversions… And they’ve hidden the fee pretty well 😉


      • Kate Jacques said:

        When I saw that PayPal had taken £5 out of my currency exchange, I called PayPal support, and the agent said
        “We use for our exchange rates”
        and I said
        “They you’ve underpaid me by £5.20”. She agreed and put the £5.20 back into my account within a minute.
        That might sound good but the same thing happens every month. I can’t imagine how many people *aren’t* phoning PayPal to get that money repaid to them.

  4. Laure said:

    I usually don’t read the “numbers’ side of business ( I know I should) but your headline was too tempting. I’m appalled by what you’re writing and documenting. Transparency is a value shared by their small business clientele so such a sheme tarnishes their reputation, affects the brand and the relationship.
    I guess they need more competition. If even banks are less greedy – it says it all!
    Thanks Peter for writing this post about behind the curtains business problems.

    • Peter Sandeen said:

      Hey Laure,

      Glad to hear it was interesting enough 😉

      Maybe my bank is an exception. I’m quite sure they are. But I’m also quite sure all banks provide the necessary receipts of such fees even if they charge them.


      • Noel da Costa said:

        No they don’t, Peter.

        Banks do exactly the same thing. It is common practice in international forex. If PayPal is stealing then so is EVERY forex service on the planet. None of them give you a receipt for their commission. All of them simply tell you what exchange rate they are offering, the amount in and the amount out but that’s all.

        The way to handle this in your accounting is to use the same mechanism – make a note of the exchange rate offered.

        • PSadmin5adgubvi said:

          Hi Noel,

          I don’t know about other services. I just know that not providing a receipt of a charge is illegal in Finland. And I assume it’s illegal elsewhere as well.


  5. Faisal said:

    Thanks Peter,

    For highlighting. Was wondering if there is any competitor to Paypal, one can use instead ?


    • Peter Sandeen said:

      Hey Faisal,

      There are plenty of competitors, but only a couple work as globally as PayPal. I’m in Finland, so my options are very limited… But if you’re in the States, you have plenty to choose from (I’ve heard good things about PayLeap, though I haven’t tried them myself).


  6. Ken said:

    It’s not just PayPal. Everywhere there is an opportunity for currency conversion there is a margin and spread between the current market exchange rate and the net exchange rate. 2.5% is pretty much the norm on these sorts of transactions.

    You say Nordea doesn’t have a spread. In my experience, that’s rare. I’m an American living in Europe and the only major US bank I know of that doesn’t charge a conversion fee is Schwab. Unfortunately, they only service US residents and don’t offer business accounts.

    I’m glad you’ve found a way around (I’m assuming you’re 100% sure that you have). Others may not have such a reasonable bank as yours.

    My advice: make sure you’re 100% clear on all both fees and conversion margin rates before you move your money to another account.

    One easy way to check is to ask if you transfer $1000 from your dollar account to your euro account and then immediately transfer it all back how much will be in your dollar account.

    • Peter Sandeen said:

      Hey Ken,

      Yeah, it’s a common fee. But the problem is hiding it and not providing appropriate receipts of the charges. If they didn’t hide the fees and gave the receipts, it wouldn’t be stealing—it would be pretty standard business 😉

      I especially checked with my bank that there is only the withdrawal fee (1.9€) and no currency conversion fees. That’s what I’d expect here in Finland though…


    • Marco said:

      2.5% is absolutely not any sort of norm for currency exchanges anywhere. If you imply 2.5% is the norm markup over the mid rate, that means 5% is the spread between buy and sell rates. I can tell you a 5% spread is a rip off spread. A reasonable spread for honest currency exchanges is usually around 0.3 – 0,5 percent, which means the markup either way is half that. There are numerous currency exchanges around the world operating at this rate. There are others that operate at rates of up to 30% spread, which I would consider criminal activity. A reasonable rate for an online money transfer service that handles billions of dollars would be in the 0.1-0.3% range. Anything more I would call a rip off.

  7. Conrad said:

    I have had this discussion with Paypal before and it works a bit differently to what you said.
    If you are not in the US, then Paypal will only transfer your account balance in the national currency to your bank account. That means they will convert your USD to EUR or CHF or whatever. During this conversion they hit you with their currency conversion rate.

    This is what happens in Switzerland – and I think it applies to you and others outside of the US too.

    If you would open a USD account in Finland, they will do this: they convert the USD to EUR anyway and transfer the EUR to your USD account. Now your bank will convert the EUR they received from Paypal to USD, using their conversion rate. So you pay twice.

    I had fees on both variations. On USD -> CHF , Paypal charged. On USD -> USD they converted to CHF anyway, plus the bank dinged me.

    Never send money to a USD account in your home country, because your bank does not get USD, Paypal still sends the home currency. At least that is what it does in Switzerland.

    The only way to avoid having paying for a conversion is to actually have a USD account in the USA. This Paypal confirmed. They only send USD to US accounts.

    Opening a US account is not so easy these days either. For one you have to go there in person. Plus, lots of banks are going to demand a Social Security number, which is going to be a problem to most people resident in other parts of the world.

    About the only way to get an account in the US, without being resident there or having a social security number, is to open a trading account at E-Trade.

    Of course, having more than one account attracts bank fees etc. so you have to balance the fees you pay against the Paypal conversion fees.

    Another issue is that of being in possession of an account in the US that you use it for trading purposes. If you travel to the US a lot, you will have to be careful about not being considered a tax resident for those business deals. At this point in time a bank account in the US does not make you liable for filing US tax returns, but who knows when and if this will change.

    Another way not to pay fees is to have your clients take the risk and have them pay you in EUR / CHF and then the transfer from Paypal will not go through a conversion, because the right currency is sitting the account.

    • Peter Sandeen said:

      Hey Conrad,

      Thank you for that. I’ll have to double-check (again). I read somewhere that the bank account’s currency is what matters… But because of a change in my business type (which should be done in a couple of weeks), I’ve avoided transferring the money to a USD account (to avoid extra paperwork).

      But yeah, I’ll have to check that.


      • Conrad said:

        Here is an extract of an email with Paypal support: …
        ” … I can confirm that you can withdraw the funds in USD to your American bank account registered in USA
        or to your local bank in CHF …”

        This was because of me trying to use a USD account in Switzerland, which they just send CHF to anyway.

        These transfers come from Paypal in Singapore and they totally disregard the currency of your bank account and just send the local currency.

        If you do not have enough funds in your Paypal account in your local currency, Paypal will convert. So having a USD account outside the US will give rise to your USD balance -> local currency (at a low rate) -> local bank converts to USD at their “sell” rate.

        The end effect is that Paypal has installed currency trading booths at the borders of all countries if you are receiving funds that are not in your local currency.

        • Peter Sandeen said:

          Hey Conrad,

          Thanks. That’s just wrong… But really, thank you for letting me know. I’ll try it once I can do it without causing a huge fee from my accountant who has to handle extra paperwork 😉 But I’m losing all hope… BTW, when did you talk with them?

          • Conrad said:

            3 months ago.
            Basically they say on the withdrawal screen that the transfer in US is to US accounts, so they feel they are transparent about it. I feel it is quite clear, although this rule is frustrating.

            If you are normally resident in Finland, you can forget about circumventing this conversion by using an offshore account, since they will only transfer to a US-registered bank in your name, apart from your local currency.

            Many offshore places are not eligible for Paypal accounts anyway.

            Possibly the only way for US non-residents is to use an E-Trade account, unless you have a Social Security number.

            • Peter Sandeen said:


              Amazing what they consider fair… Thanks again for telling about this.

  8. Traian said:

    We should all switch to BitCoins, the newest scam(cough)kid on the block! 🙂

    • Peter Sandeen said:

      Hey Traian,

      A while ago BitCoin was the best-performing currency in the world (no joke) 🙂 Their exchange rate exploded at some point, though it went down quite a bit afterwards… Maybe I’ll start charging in BitCoins then 😀


      • Traian said:

        Peter, when you will start charging in BitCoins I’ll do a free SEO audit of the site of your choice 😀

        • Peter Sandeen said:

          Thanks. But I think I’ll have to stick to a currency a majority of my clients have heard of 😉

  9. Nikki said:

    Wow! Never would’ve known this was going on because I am located in the US. Nevertheless, unfair is unfair – no matter where the act is committed.

    I hate that you had that experience with Paypal. It’s hard to deal with “the big guys” being unethical because of the legal protection they can pay for. But you’ve done an awesome job of explaining and making it clear that the word needs to be spread about Paypal’s blatant theft!

    Best of luck to you Peter. I’ll definitely share your post!

    • Peter Sandeen said:

      Hey Nikki,

      You’re lucky 😉 Not only because PayPal isn’t stealing with this scheme, but also because you have lots of options. I have a couple of others than PayPal, but their fees are generally much higher than PayPal’s, so I haven’t switched yet…


  10. Dave said:

    Great article, Peter.

    Out of curiosity, however, currency exchange rates in the trading market often differ from what banks (or payment processors) use most of the time, regardless of country.

    I mean, if we walk into a bank or a money changer, their rates are often 2-4% less favourable than the trading price.

    Partly because of the multiple channels the funds have to go through as the money transfer isn’t between two (or even 3) parties only.

    Much like credit card transactions, where the merchant, the payment processor, the credit card company, the bank, and the actual store has to be paid on every swipe.

    The fees are paid somehow.

    I do agree 100% that the way Paypal reports it is shady. If they just state that they have a fee, it’ll be less of an issue as the customer is informed.

    Thanks again for the article.

    David Tong

    • Peter Sandeen said:

      Hey Dave,

      Yep, they’re pretty standard. The issue is the lack of a receipt of any kind that would be acceptable in accounting and that they hide the fee so carefully. Because of that, the money they take is as good as stolen money; it’s not an expense I can deduce…

      I know we have low bank fees here in Finland, so maybe I was expecting too much. But as far as I understand, PayPal is currently stealing because they don’t provide those receipts.


      • I agree with the no-receipt aspect of it and charges being hidden. I wonder if they operate the same way in all countries, especially those who require certain level of reporting.



        • Peter Sandeen said:

          Hey David,

          This isn’t country-specific. At least nothing points to that. I’ve talked with them a few times now, and they’ve never indicated it wouldn’t be a worldwide policy… :/ And Finland is pretty much the promised land of reporting, so if they don’t do it here (which is clearly illegal based on Finnish law), I’d be surprised if they didn’t do the same everywhere.


  11. barbio said:

    Hello Peter, I had the same problem a few months ago and I solved his issue in a different way. I started charging my clients in my currency €. With that I avoided this giving away money to PayPal. Now I only pay the 3.5% for using PayPal. And that’s already a lot.

    • Peter Sandeen said:

      Hey Barbio,

      I’ve considered that, but to some extent it creates a worse experience for them (when they’re used to paying in USD). That’s why I haven’t switched already. But I’m reconsidering it yet again…


      • Rather than charging your customers only in EUR or USD, why not offer them both options, using a fixed exchange rate that will make it more expensive for clients to pay in USD?

        Your client can still choose to pay in USD, but if he pays you in EUR *he* will get the benefit of a somewhat lower price and *you* will get the benefit of not having to pay the rip-off PayPal exchange rate.

        If your client wants to pay in USD anyway he can have that convenience — but at a price.

        The trick of course is to figure out the appropriate fixed conversion rate to use.

        Just make sure that you explain to your clients why paying in USD will be somewhat more expensive, so they won’t think that you’re trying to rip off non-EU clients.

        • Peter Sandeen said:

          Hey Jeroen,

          Thanks, that’s a good idea. I thought about it briefly at one time (months ago), but I’ll reconsider it. I’ve also considered just adding a cost to paying via PayPal at all (for bigger clients at least). Because just the basic transaction fee even is quite significant in a year.

          Peter Sandeen

  12. Hi Peter,

    I really appreciate you bringing this up. It never occurred to me that I might be paying conversion fees with PayPal even though I’ve traveled a lot and I’m aware of the usual fees when we change money (I just didn’t think of this with PayPal).

    I’m in the US, but I have clients in other countries. I’ve never seen a mention of conversion fees (it must be in the fine print somewhere). But I’m going to take a close look and see what I find. I’m also going to see what other options there might be–PayPal certainly takes a big enough chunk out with the 3% fee. Of course they need to be paid for their services, no doubt about that. It’s a business, after all, and their services are handy and easy-to-use. But if I’m already paying $15 on $500, say, what else am I paying if my client is in Australia or South Africa or wherever? And would it be less expensive some other way?

    Thanks for the heads up.

    • Peter Sandeen said:

      Hey Leah,

      As long as they pay in USD, you don’t pay for the currency conversion… Lucky you 😉

      But you have lots of other options because you’re in the States. The rest of the world (like Finland) is very limited. But I’m looking into other options.


      • I see. Tell me, if you don’t mind, if I’ve got this straight.

        I immediately assumed that the client is paying for the conversion when he or she pays me with USD. But maybe not.

        If the non-US client pays in USD (I assume that’s possible? I always–I think–get a drop down menu with currency choices) then there’s no fee. The conversion fee is incurred (as you mentioned) only when money is withdrawn?

        I’ll bet PayPal will have some serious global competition one of these days. The opportunity is there.

        Thanks for this info! Also waves above at Jeroen–Hey Jeroen! Small world 🙂

        • Peter Sandeen said:

          Basically you’re right. As long as you don’t charge in any other currency than USD and you don’t withdraw the money to a non-USD account, you don’t pay the currency conversion fee because it doesn’t happen.

          So, just keep sending your invoices with USD amounts and selling your products with USD prices 😉

  13. Something I wanted to know for while. PayPal was doing this hidden for our business for a while now, but we had to take their merchant services due to other service provider transaction price.
    Thanks for sharing the best thoughts about how to watch on for PayPay crime and will be be sharing this with our other PayPal users who get charged thousands annually for their eCommerce sites.

    • Peter Sandeen said:

      Hey Fernando,

      Yeah, they’re still one of very few options for people outside the US. So, to some extent, they can still steal because people have to use them anyway…

      Thanks for spreading the word 🙂


  14. You should check out Love how the guys are disrupting the banking/money transfer industry. (Listening to friends’ experiences on transferring money between their own bank accounts in different countries, it’s bizarre that a chunk of the money just disappears in the process and neither the sending nor receiving bank is able to tell where it went…). If you have a limited amount of project clients, TransferWise probably suits well for making the transfer across countries. Their geo-coverage is still quite limited, however, even though they seem to be expanding rapidly.

    • Peter Sandeen said:

      Hey Miikka,

      Thanks, interesting system. Definitely worth considering in some cases like bigger consulting projects. But for now, I’ll have to stick to looking at options that integrate easily with Infusionsoft, to which I’m switching in a couple of weeks…


  15. […] the complaints against the online payment network are typically predictable (the fees are unreasonable and unclear, their customer service is severely lacking, and they have a penchant for closing and limiting user […]

  16. Stellare said:

    Hei fra Norge! 🙂

    Thank you so much for this very useful information. I am setting up a system and was thinking about using PayPal. After reading about your experiences I will find other solutions that does not include stealing. They have to make money too, but hiding their income is unethical in my book.

    So, thanks a lot Peter!

    • Peter Sandeen said:

      Hei Stellare,

      Thanks 🙂 I’m going with WorldPay, which is almost identically priced. The setup process is a bit more complicated, but it shouldn’t be especially difficult… Maybe that would work for you, too.


  17. Ken said:

    One option, while more complicated, that might be worthwhile considering for the amount of money involved, is to establish a US-based corporation.

    You would be able establish a US business bank account to receive funds in USD. Transferring them back out again to your home country could then happen using one of the low-cost currency exchange services (search for them and read the fine print carefully).

    There is a lot to learn about this process and certain administrative requirements that are critical but if you’re moving enough money, it can be well worth it.

    Peter, I’d say your situation would be an example of where it starts to be worth the trouble. I’d hire someone in the US to do most of the admin work.

    • Peter Sandeen said:

      Hey Ken,

      That’s an option. But I’m wary of putting myself into the US legal system, which I don’t know enough of; I’d be subject to many potential (big) problems I can now almost certainly avoid completely.

      And from the looks of it, WorldPay should be a good alternative 🙂

      But thanks for the idea. I’ll reconsider it if I run into more trouble with other options.


  18. Bree said:

    I’m in the U.S., and even here, Paypal’s fees are frustrating. I know I’m not losing thousands of dollars a year, but I thought I should let you know about how it is for some of us U.S. freelancers and entrepreneurs, too.

    Every time I earn my usual $700-800 a month with one of my clients, PayPal takes about $20, which amounts to $240 a year (this doesn’t even cover the amount I lose when other clients pay through PayPal, either). That doesn’t seem like much compared to thousands others are losing, but for me, that would cover a whole month of health insurance or groceries.

    Any American readers of yours might want to consider Freshbooks (which is ironically based in Canada). Freshbooks gives you the option to only lose 50 cents per PayPal transaction. That’d mean you’d have to do 40 transactions with clients over the course of 1 month to even get anywhere near losing the $20 I am, and most of us don’t do that many transactions in the first place! So it’s a really good deal, especially when you can get this 50 cent charge even with their free account level — the only thing to note is that you must be based in the U.S. and clients have to pay through PayPal using a U.S. bank account, and cannot pay with a credit card (at that point, you need to shell out $20 a month for a premium-level Freshbooks account, which could still be worth it depending on how much you’re losing per year).

    I realize PayPal is open about these transaction fees even in the U.S., but for a company making millions off of other people’s work and money, it’s extra low of them to cheat non-U.S. citizens out of cash.

    • Peter Sandeen said:

      Hey Bree,

      Thanks for this. Even though PayPal’s basic transaction fees are quite low, they still add up and are really frustrating. It’s just difficult to sometimes avoid them.

      I haven’t looked into Freshbooks lately. The last I checked, I didn’t notice the deal with PayPal; they were more of an add-on than a way to process the payments. But great if they’ve become an even better option 🙂


  19. […] PayPal Steals With Hidden Fees (and how to protect yourself) (Peter Sandeen) […]

  20. Thanks for this, Peter, and I am so saddened that things are coming to this world-wide. Thanks for the double-dose of a follow-up and for your clearly understandable explanation of the trouble. I am amazed that more are not making this clear. I hope you find better service at WorldPay.
    Question: Would you recommend making this change to someone who deals only with US funds, or who is handling only smaller amounts? I am in that situation and almost feel I should switch, just on principles

    • Peter Sandeen said:

      Hi Katharine,

      If you only use USD (and you have a bank account in the US), then you shouldn’t have problems with the currency conversion fees. That said, they’re known to, for example, freeze people’s accounts because their relatives owe something for PayPal. In other words, they blackmail people (or have done so in the past).

      And there are plenty of stories of how they’ve suddenly frozen an account and kept all the money in it (though I haven’t seen this happen to anyone I know well).

      So, it’s unlikely that you’ll have any trouble with them, but it’s possible. And at least I want to switch just because of principles. …but now I’m hearing worrying stories of WorldPay as well, so I need to do even more digging :/


  21. I had the same experience. My clients pay me in USD and my account is in Can. $. I had noticed that the exchange conversion was exaggerated but had not taken the time to check it out. Thank you for pointing it out so clearly. I will look for other options.

    • Peter Sandeen said:

      Hey Aline,

      In Canada you have plenty of options. But from what I’ve heard, it’s really worth the time to look for complaints because they often tell more than anything else about a company’s reliability…


  22. Kerrianne Edwards said:

    Thanks Peter, this was a timely eye-opener as I searched for a merchant provider that would be compatible with 1shoppingcart. I ended up deciding on SagePay – a good rate and happy to pay $US into a $US account. I’m in the UK so I don’t know if it would work in Finland but it might be worth checking out.

    • Peter Sandeen said:

      Hey Kerrianne,

      Great 🙂

      I need a solution that works with InfusionSoft. And I’m now talking with a Finnish company, though it’s getting more and more complicated the more I talk with them… I might check out SagePay, thanks 🙂


  23. Hammad said:

    Yes I agree with you on all this.Stealing $4.59 on $96 transaction is like we earn for them rather than for oneself.Its like they barge into ones right without even considering ones consent.Concealing a steal as merchant fee and of this magnitude on a personal account (Had to look that one up)!

    Totally senseless bullshit money making tactics

    • Peter Sandeen said:

      Hi Hammad,

      I think they “only” steal 2.5% from currency conversions. The rest is their normal fee (which might be considered high, but at least they’re straight about it). But as can be seen from the post, I don’t like how they do business…


      • SYED said:

        Thank you peter for giving us this info.. their is not like hidden charges and they dont charge 2.5% commission their current commission rate is 4.4% + 0.30 per transaction.. 🙁

        • syed said:

          Thats why hammad you got to pay $4.59 for a $96 transaction.. it would be $96-4.4% ($4.22)+ $0.30 its $4.52 approx which you’ve paid!!!

        • Peter Sandeen said:


          Sorry if I misunderstood what you meant, but though you’re right about their official commission rate, this post is about the hidden currency conversion fee, which is 2.5% (at least in Finland), and they don’t show that to you anywhere…


  24. […] from it: How many can you sell? How much can you charge? How much will your payment processor take (or if you use PayPal, remember to count how much they steal on top of the normal fee)? Will there be refunds (and how much do they cost you)? Will you pay for advertising? Are there […]

  25. Interesting article – I wonder if they allow USD withdrawal to Canada as most Canadian banks offer USD accounts.
    Definitely going to look into this (and WorldPay too)
    Thanks for the heads up!

    • Peter Sandeen said:

      Hi Lorraine,

      I’m guessing they don’t allow that. But it’s worth asking about 🙂

      Actually, my plans have changed. I won’t use WorldPay because they couldn’t keep their prices consistent (the sales person said something, the pricing page something else, and the application form yet different prices)… I’ll use a custom integration instead 🙂


  26. Tony said:

    I know all about these terrible exchange rates as I have been doing business online for quite a while. I am so tired of them stealing our money with nearly every single transaction and it doesn’t matter that you send it as a gift to someone, they will still hit you with their made up exchange rates. I just got hit by it, that is how I found this, I wanted to see if anyone was talking about it because I am fed up with it. They also hit you with fees for an invoice, some people don’t realize it. I just paid my Japanese contact, he sent me an invoice, he got hit with about 2750 yen for 70300 yen and I was hit with about $35 or so on the same amount because of their exchange rate. I checked the rates at the time on and it was $1 USD = 99.222 Yen, while PayPal showed the rate at 96 Yen, nice. I think if we start a petition on this, might be able to do something. I know that we are not a lone. I am working on finding a better method and I will check out the site you posted in this article. Thanks!

    • Peter Sandeen said:

      Hey Tony,

      I hadn’t even thought of the currency conversion in that case… I’ll update the post at some point and add a mention of that, too.

      Let me know if you have any questions I can help with.


    • Jorge said:

      I have found that sending an international USPS money order works when paying my friend in Japan for anime products. Max per money order is $750USD. Fee for that type money order is $5USD. In Japan the post office also is a bank. He just takes it to the Japan postal bank there and he can get it cashed or deposit it in his postal savings account. The conversion rate is about 1.5%. A lot cheaper option than WU for small amounts.

  27. […] charge you a commission. That might sound like a good thing, right up until you realise PayPal exchange rates are shockingly different to the ones you’d see on a forex site like [Hat tip to Peter Sandeen for pointing out […]

  28. sadam said:

    I noticed it too I bought something on ebay and used paypal. the exchange rate was .358169 compare to the banks rate of .3704

    • Peter Sandeen said:

      Hey Sadam,

      I’m afraid we’re one of the few who actually check it :/


  29. Ashish said:

    I am a working freelancer and i get all my payments in USD through paypal. First Paypal takes fee when someone trasfers to my paypal. Which is quite high. Also when i withdraw money to my bank account it gives less conversion rate. today it was 1USD = Rs. 61.40… But i got it as 59.4 from paypal… It is pure stealing

    • Peter Sandeen said:

      Hi Ashish,

      Yep, that’s their business—taking a supposedly unnoticeably small cut from everything you do :/


  30. Benedict Lee said:

    Thanks Peter,

    Yes I have been trying to find a solution for the same problem, then I came to this article by searching at google. I am from Hong Kong and have a small ‘fast-retailing’ online business which margin is low and ‘shelf lives’ are short. The kind of retail business which a lot of the stocks keep coming in while a lot of stocks keep being sent out but only make a little money from each deal. If I sell US$10,000 of stocks per month and then all the costs except that paypal conversation fees is US$9,000. My net profit could have been US$1,000. However with that lousy exchange rate I loss US$280 to just that. A whooping 28% of my net profit.

    Yes I struggled to find a solution to go around that. The possible thing I can think of – To find a supplier that accept paypal and charges me USD.

    • Peter Sandeen said:

      Hi Benedict,

      PayPal really doesn’t sound like the “ideal” solution for you. Have you looked into the options where you pay a monthly fee but the transaction costs are fixed and almost non-existent? You might end up with a better net profit…


  31. Duong Do Hoang said:

    I use both Paypal and Skrill (Moneybooker)
    Paypal always steal money through currencies exchange (with very very low rate) to my VND bank account and do not allow me to withdraw to my USD bank account
    Skrill (moneybooker) allow me to withdraw in EUR/USD directly to my bank account.
    and Skrill (moneybooker): transfer fee is more lower
    Paypal is very stupid thing, but eBay accept only Paypal, the other they accept but hard to configure.
    It is not fair, both Paypal and eBay are shit

    • Peter Sandeen said:

      Yep, the way PayPal does business is unethical. I don’t use eBay, so can’t really comment on that…

      • Great article,
        I live in Greece and our national currency is Euro. I accept payments in US dollars too.
        I use my US Dollars Balance to pay my suppliers and my Euro balance to withdraw my profits. I know it is not a 100% solution but i am avoiding currency convertion.

        • Peter Sandeen said:

          Hey Pavlos,

          I’ve been doing something quite similar to avoid losing as much. But I can’t avoid significant losses even though I do what I can…


  32. Leonardo said:

    I have a paypal GBP balance because i’m paid by a UK site in that currency, and when withdrawing to USD paypal is paying 1.58-9 when the current rate is 1.64-5 as of jan-2014, that’s 4.4%, not sure how much a bank would generally charge but paypal charges too much!

    • Peter Sandeen said:

      Hey Leonardo,

      Yep, that’s a big difference. I think it shouldn’t be that much (they have a fee table hidden deep into their site, but you can find it if you really put your mind to it). If they really take that much, it might be a good idea to check what the fee should be in case there’s something you could get back.


  33. aaron said:

    If bitcoin becomes mainstream then this whole problem can go away.

    Receive bitcoin for a very small percentage (.5-1%). Convert the bitcoin into local currency for 1-3% fee. A few companies already do this.

    • Peter Sandeen said:

      Hey Aaron,

      Interesting idea. I’ve heard of some companies that do it, but I think it’s going to be a “while” before it catches on in the main stream 🙂


  34. BiYaGo said:

    Hi Peter,

    Yes, it is correct. Today, I noticed it. :'(

    Please reply on my email, if you have solution for Indians.


    • Peter Sandeen said:

      Sorry, don’t have a clue what would be a good solution for you. Generally the higher-end options result in lower costs, but only if you have enough sales to justify monthly costs etc.


  35. Nikos Antoniou said:

    Dear Peter,

    As I know Paypal give the option of billing you in the currency listed on the seller’s invoice.

    So, instead of Paypal let your bank handle the conversion at market rate..

    There is any trap in that way?

    Thanks for the article,


    • Peter Sandeen said:

      Hey Nikos,

      The issue is that you don’t necessarily want to bill your clients in your native currency. For example, I almost always bill people in US dollars because most of them are more used to dollars than euros. Otherwise your idea is exactly what you should do 🙂


  36. Dhrumil said:

    Hi Peter,

    I am agree to you. But how we can stop it???…

    Is there any legal way to deal with this?

    • Peter Sandeen said:

      Hi Dhrumil,

      I think you could win a legal case. At least in Finland it would be an obvious win. But the time and money it takes to go against a company like PayPal… I’m not going to.


  37. Carthage said:


    Great article. I know I am a bit late to the discussion but I am looking at Stripe here in Ireland and having read your article, I checked to see if it is available in Finland. I seee that it currently in Beta and marked as coming soon (whenever that may be). I do not now how good they are but it will be another option for you.



    • Peter Sandeen said:

      Hey Carthage,

      Thanks for mentioning that 🙂 I’ve looked into it a long time ago, but didn’t realize it would work in Finland (maybe it didn’t even have a beta then). I’ll check it out, but I already have a custom integration almost working, which will take over at least most of my payment processing.


  38. PyaPal has a high fees when it comes to currency conversion without mention cross border personnel transactions, plus its differences between a country and another.
    US and Candada have the lowest fees for cross border personnel transactions:
    2.9% + $0.30, but other countries it can up to 7.4% + $0.30, Brazil as example.
    If you are confused or wondering how the fees work, you can read PayPal user agreement for your country, I also built an online calculator for that(currently its n beta) based in what they say in their user agreement.

    • Peter Sandeen said:

      Hey Beladel,

      Great tool 🙂 Could you make it so that when you put in the information, you’d see how the different options compare?


      • What do you meany by “you’d see how the different options compare?”, can you explain more?

        • Peter Sandeen said:

          I mean that if the user could just input the numbers and click a button to see what the costs would be in each of the different options.

          • Very nice suggestion, I will inform you when I add it to the calculator.

  39. ad said:

    I agree

    in india same they charge heavily on the exchange rate

  40. mehmet said:

    Hi Peter,

    Paypal exchange rates are pain in the nose. May be TransferWise solves your problem.

    Good luck.

    • Peter Sandeen said:

      Hi Mehmet,

      Thanks, but I’m already developing a custom system, which will solve my issue 🙂


  41. Jamie said:

    I’m in Australia and finally got sick of being ripped off by all the PayPal fees. Since most of my clients are in the US and pay via credit/debit card the fees were insane.

    This is what I was paying for almost every transaction:
    Transaction fee of 3.4%
    Fixed fee of $0.30
    Credit/debit card fee of 3.9%
    Conversion fee of 2.5%
    “Latest conversion rate” that was always 2-3% in their favor

    So overall I was losing 12-15% of my payments to PayPal.

    For any freelancers or small businesses handling international transactions I HIGHLY RECOMMEND using Payoneer. There is a 1% currency conversion fee, ATM withdrawals are $3.15, and there is an annual fee of $29.95 for the mastercard.

    If you use this affiliate link you get $25 added to your account for free, pretty much taking care of the annual fee for you.

    If you use any other PayPal alternatives let us know!

    • Peter Sandeen said:

      Hi Jamie,

      I’ve heard good things about Payoneer. I think it’s not (or wasn’t) available in Finland when I looked, or maybe there was some other issue with it, so I didn’t sign up…


  42. Aaditya said:

    Hey friend,
    If I open account but don’t use it much, do they charge monthly or yearly rent???

    • Peter Sandeen said:

      Hey Aadiatya,

      They don’t have monthly or yearly fees.


  43. Rauno said:


    Thanks for the read. Landed on your site from Google searching for paypal exchange rates. Searching, because just noticed the same thing you are experiencing. I´m from Estonia by the way and usd to eur is something i have to deal with daily. No matter how you look at it, it is stealing and i really hope we have a chance to use an alternative to PP in the near future.


    • Peter Sandeen said:

      Hey Rauno,

      Yep, I’m looking forward to having an alternative. And if things go well, I should have one in a few days… But it’s a custom integration, so hardly a widely applicable replacement for PayPal :/


  44. B said:

    Dude…. Im not saying paypal is that great or anything, but the conversion rate you are ultimately getting with them is slightly better than the majority of places. You keep quoting “the actual exchange rate” you google, and find on financial site like bloomberg or where ever you are looking. That is what is the called “interbank” rate. Only big banks have access to that rate, no one else. So you always pay a premium somewhere, the banks are mostly to blame. Paypal did not necessarily steal from you because they most likely have to pay above the interbank rate themselves… Really all I am saying you can call it stealing by pay pal and repeat it over and over and over again. Learn about the interbank rate and how trading currency actually works. If you are looking for the best rates you should be using a forex broker that does international transfers. A massive industry for remittances has sprung up just because of the fees bank charges (the spread) above and below the interbank rate. Forex brokers can you closest you will ever get to that interbank rate and even they have to take a cut..

    • Peter Sandeen said:


      Just to be clear, I’d pay <2€ per currency conversion for my bank if PayPal allowed me to transfer my PayPal balance to my USD account in Finland. And I'm not a bank 😉

      And I call it stealing because they don't provide any kind of a receipt of a charge they make. That's technically stealing no matter how many ways you slice it.

      Sure, I'm not saying they shouldn't be allowed to charge for a currency conversion. They should just provide the legally necessary documentation of such charges, so that business owners could include those charges into their accounting. And I think it's just a giant middle finger to their customers that they've blocked the ability to transfer into currency bank accounts (which would allow me and others to bypass the currency conversion charge PayPal charges).

      So, rather than implying that I haven't done my homework, why don't you read the article first?


      • Jan de Graaf said:


        I don’t agree with the way you describe things. PayPal has *no* currency conversion fee. It has high currency conversion rates. As a user you choose to use their currency conversion service by their rates. So, there is no fee that can be put on a receipt.

        I do agree that it is a shame they (very often) won’t transfer money to ones bank in the correct/requested currency. In the Netherlands it is possible to have bank accounts with different currencies (I have one for USD). PayPal transfers in USD to that account involve no currency conversion at all. So clearly, this is different per country or even per bank.

        Best is to bill your customers in the currency you want/need. I ask 90% of my customers for EUR and some for USD and GBP, because I sometimes want to buy online using those currencies. True, I have to keep my non-EUR money with PayPal all the time, no interest, bummer…but with today’s low interest rates that’s not really a big difference.


    • Ricky Scanlin said:

      Ok, this guys is obviously part of the PayPal legal team. This thread is working, they’re threatend by it.

      I say we make a push for getting PayPal split up in two 5 separate compaines because it’s a monopoly and they think they can get away with anything. The same way the oil companies were split up in the 70s.

  45. B said:

    *****Really all I am saying you CANT CALL it stealing by pay pal and repeat it over and over and over again****

    • Peter Sandeen said:

      To reiterate, if a business (e.g., PayPal) charges for something (e.g., currency conversion), they have to, at least when requested, provide a receipt for the charge. If they don’t, to my best knowledge, it’s technically stealing (or maybe it’s “fraud” or some other technical legal term—but the point remains that they “steal” from their customers when they refuse to provide receipts).

      So, really all I am saying is that you should read the article before commenting… When you don’t, you just appear to be too stupid to understand the argument made in the article, which doesn’t seem to be the case based on your writing.

      • Jan de Graaf said:

        Again, PayPal does not charge anything for currency conversion. They ‘just’ have a highish currency conversion rate. So, no stealing, just bad rates. Just like every bank or exchange office offers different (highish) rates. And, many banks even actually ask a fee on top of their conversion rates, PayPal doesn’t. Banks do put *that* fee on their receipt.

        • PSadmin5adgubvi said:

          Hi Jan,

          I get your point, but they specifically tell you (when you read deep enough into some agreements) that they charge a currency conversion fee.

  46. zzlangerhans said:

    This is a little off-topic but US banks do the same thing on international wire transfers. They force conversion of USD into the local currency at an unfavorable rate even if the local bank accept US dollar transfers. In that case, what will happen is the person on the other end withdraws USD minus the 5% hidden fee (or embezzlement, as I call it) from the currency conversion. I used Bank of America to transfer $14000 to China, and my recipient was given $13300 in cash. $700 dollars was kept by Bank of America (or their “external vendor” for Chinese yuan, as they claimed).

    • Peter Sandeen said:

      I’ve heard of that, too. Sounds like a crazy idea to me… :/

      Thanks for sharing and for the details.


  47. Mike said:

    In Canada:

    Will there still be any currency exchange fee if my account is set up for USD and accept I am willing to accept US bills.

    And if I pay using USD with a Canadian Account, is there another fee attached? (Convent CA to USD to buy the product and then still have to pay the Government import tax fee w/o S/H)

    There should be an open to have both USD and CAD on same account since my bank allows it.

    Thanks for the informations,

    • Peter Sandeen said:

      Hey Mike,

      I’m not a PayPal rep, so can’t be quite sure (though their reps consistently give wrong info, too), but at least I have to pay the conversion fees both ways. So, you most likely pay them too :/


  48. Rosse said:

    Paypal has bad exchange rate until now!

    • Peter Sandeen said:

      Hi Rosse,

      When you said “until now” do you mean they’ve changed something in the last week or so?


  49. Keri said:

    It’s really not that hard to read Paypal’s User Agreement to see what their fees are. Not hidden, not stealing. After all, they are a business that needs to make money too.

    Try reading Section 8 – Fees and Currency Conversion.

    For example, converting USD to CAD or vice-versa, there is a 2.5% fee on the amount. When tested, it is, indeed, 2.5%.

    Before creating a Paypal account, you did click ‘I agree’… maybe read through the agreement before agreeing next time.

    • Peter Sandeen said:

      Hi Keri,

      You didn’t read the post then?

      I specifically mention that it’s probably mentioned in the terms of agreement. But that’s not what makes it stealing—not providing a receipt of the fee is what makes it stealing. Or more specifically: they provide two receipts of each currency conversion, but they both specifically state that there was no fee even though there was.

      So, maybe read through the post before commenting next time. …as you suggest I do with agreements?


  50. Rookie said:

    Thats a good read, sad you’re a victim of Paypal too. I’m from India and I work online and receive payments thru Paypal. My payments are sent once per year in USD to Paypal account and Paypal steals almost a half month’s salary from me with their hideous exchange rates. For example, assume 1 USD costs 60 INR at the current exchange rate; Paypal will give me 58 INR per USD when I withdraw money to bank; and if I buy something using Paypal the same day in USD (hosting,domain etc.), then Paypal would charge me at 64 INR per USD, so I have to pay a lot more than expected. When withdrawing a lot of money at once from another currency to our home currency, we are loosing a lot of money to Paypal’s exchange rates..

    • Peter Sandeen said:

      Hey Rookie,

      Yep, it’s sad. I’d be fine with the currency conversion fee if they provided a receipt of it and didn’t hide it so well (i.e., providing receipts that specify $0 conversion fee).


  51. Jan Gregory said:

    You wrote

    ““The total cost through PayPal [for currency conversion] is usually less than many international multi-currency bank transfers.”

    That is just a flat-out lie. A total untruth. PayPal conversion rates are always more than any international bank charges for exchange rates on an Electronic Funds Transfer>

    In 2014, how can we have no many government bodies protecting consumers and have a scam like this right out in the open?

    You commented that “it doesn’t seem like much… but it adds up.”

    Does it ever… PayPal is making billions annually and the only overhead is providing a “secure network” for electronic funds transfers

    They are not providing a service, they are doing what all thieves do… placing themselves as the primary gatekeeper to commercial transactions that should be free enterprise where business has a choice amongst banks

    There is not a single reason why banks are not working together internationally to provide merchants these services at competitive rates. The banks operate on a level playing field with open currency exchanges… why aren’t they providinhg needed services to merchants.

    • Peter Sandeen said:

      Hey Jan,

      I agree 🙂 Though, with small transactions, banks often charge a fixed fee on top of the currency conversion fee. And then the total cost can get higher than PayPal’s fees. But at least those bank charges are legal, and you get a receipt.


  52. chris said:

    I just completed an overseas transaction tonight .I made a purchase from Japan,i am in Australia.My paypal acc fully funded it .So no credit card etc.I was slugged 4.5 % above the current exchange rate .The cost $48 Au.on top of todays exchange rate.

    • Peter Sandeen said:

      Hey Chris,

      Yep, sounds familiar. And if you look at the currency conversion receipts (either of the two they provide you), you’ll see that “currency conversion fee” was $0. Or at least I assume so… :/

      Hope things change at some point.


  53. Jim said:

    Hi. I only read up to the point where you complain about the exchange rate they use.

    No one will ever exchange currency for you at the official exchange rate. Currency exchanges, banks, paypal, no one. Saying that there are no fees doesn’t mean the exchange rate is the official one. It means the exchange rate is whatever Paypal says it is, but there isn’t an extra fee beyond that.

    When they say they’re “using the latest exchange data”, that means they are adding the small fraction they normally add for conversions to the latest official rate. This is exactly the same procedure and language banks and exchanges use. I don’t understand why anyone would be confused about what’s going on, and claim it’s “theft”.

    So I stopped reading. If you make some better points later on, that’s too bad. You shouldn’t have started with the silly stuff.

    • Peter Sandeen said:

      Hi Jim,

      The point is, as you would know if you read the post before complaining about it, that they don’t provide receipts of those fees. The fees are fine. Not giving receipts of them is not.

      Or actually, they do give receipts where they claim that the currency conversion fee was zero.

      So, that’s theft. If they charge for something (as they clearly tell that they do), they need to provide a receipt of that charge. That’s what banks and exchange companies do.

      And the currency conversion rate they use “normally” is the actual currency conversion rate. They just take a cut when they actually perform the currency conversion. So, it’s not that they’d just decide to use a different currency conversion rate in general.

      Please, read the post you comment on. Otherwise you just seem silly.


  54. Hi Peter. I am starting up a business, and I am rather stuck with this problem. PayPal is not available in my country (Pakistan), but most of my clientele wants to pay through PayPal. I am currently receiving money through wire transfer and it costs my clients $40 per transaction! My relatives are in Canada so I got them open an account in PayPal and after I withdrew for the first time I got struck by lightning. 2.5% just vanished, I also contacted PayPal if I open a USD account in Canada, but PayPal just replied what Conrad has mentioned. So I am was in double whammy! Then I found Skrill (previously MoneyBooker). I opened a USD account in Pakistan, linked it with Skrill, and my clients are paying me happily through it. Skrill charges on client side is 1% of money (which is a lot less than $40 they are paying every time right now), and Skrill charges me $4 for every withdrawal to my local bank account in USD. End result is that I get USD in my local account with very less charges and worry.

    • By the way, I am seeing that PayPal has increased currency conversion charges from 2.5% to 5%. And they have listed it now in the user agreement (now visible in the help section)

      • Peter Sandeen said:

        I think the fee depends on country… Some countries have higher fees than others.

    • Peter Sandeen said:

      Hey Danish,

      That’s great 🙂 Skrill doesn’t quite solve my dilemma because last I checked it doesn’t integrate with Infusionsoft. But good that it worked out for you.


  55. Exactly! I am searching for a way to not to be stolen by Paypal and came to your website. The 2.5% fee is too high as I am also making frequent transactions. I am currently trying to find some alternatives.

  56. Hi Peter,
    thanks for this article. I found it Googling, because I noticed exactly the same problem. PayPal is not popular in Poland and most merchants use instead PayU system. Apparently because of this reason: in Poland there is the Złoty (PLN) and PayPal forces their conversion to PLN even when transferring money to bank accounts in EUR, for instance.
    This is a malicious system, there are no other words for it.

    Thanks, best regards,

    • Peter Sandeen said:

      Hey Roberto,

      Yep, sounds familiar 🙂 Hope you’ll find an alternative—I didn’t find many worth mentioning…


  57. Jenifa said:

    You know so strange i was actually trying to figure out how to charge my client enough to cover this conversion fee and paypal fees when i ran across this article..I am a US citizen and we get robbed equally on every foreign transaction. First paypal always somehow uses the lowest exchange rate possible even though i have just checked everywhere that day and i see what the rates are which are higher than what paypal pays. Then they charge me to convert the money into USD, which it took me a minute to even figure out they were charging for that..They absolutely do not display it prominently that there are additional fees for conversion of monies into USD, its wrong and bad business practices..It is not always easy for the client to change the monies into USD before sending it or paying for goods so this still means somehow i have to figure out a way to include this into the price of whatever goods or services i am charging for..Its a lot of money..i dont know what the real solution is but thanks for at least talking about it.

    • Peter Sandeen said:

      Hey Jenifa,

      Yep, it happens any way you have the currency conversion in there. You can consider charging in your own currency even if it’s not your customers’ currency. But it’s not necessarily the right call at all.


  58. Kreso said:

    Hi Peter,

    I know I am resurrecting old news but it seems it’s still relevant since google points this way when looking for info.
    I am in the same boat like you were, and I found some very valuable information I would like to share.
    I live in Croatia/Europe, and on my PayPal account it says USD. Of course when doing transaction they convert my USD to my local currency, and then my bank has to convert currency back to USD since my bank account is in USD. I lose about 5% this way :/

    So, after talking to my bank this is what my bank told me to send to PayPal!
    Actually, before reading that email I want to point out that after sending this email to PayPal, I got a response back (within 24 hours) saying that my accounts currency is USD and will not anymore be converted when withdrawing money!

    Send this to these emails: [email protected], [email protected].

    “I hold a foreign account with my bank so I would prefer to receive funds in a currency that supposed to be a primary currency on my PayPal account. As far as I know, PayPal is not allowed to convert the PayPal currency amount into the local currency
    amount without my permission as per the Visa Europe rules and regulations.
    Visa rules strictly govern how DCC is offered to customers, ensuring cardholders are given a real choice and that all fees and charges are fully transparent. The rules state that merchants’ transaction information must show:
    • The original amount in the merchant’s currency
    • The amount in the cardholder’s home currency
    • The exchange rate and its source
    • Any fees, commission or charges whether applied within the exchange rate or separately to the final transaction currency amount
    • A declaration that the cardholder has been given a choice.
    Please, update my account to disable converting when withdrawing funds from PayPal.”

    Hope it helps to new people (I read you Peter have given up on PayPal),

    • Peter Sandeen said:

      Hey Kreso,

      Thank you! I’m actually still tied to PayPal because the custom payment system is still under construction (late by several months by now). I’ll try sending that to PayPal to see what they say this time. But the last time I quoted legal stuff to them, they just said, “F you—we don’t care. So, sue us if you want that we honor those laws.” Sure, I’m paraphrasing, but that’s surprisingly close to what they actually told me.


  59. lara said:

    Cool article, thanks for writing it!
    I noticed this a while ago and was disgusted. I live in Australia and regularly buy from the U.S and other countries, and am constantly hit with having to pay more because of their scamming exchange rates. Recently I purchased something for $543USD. According to the latest exchange rates everywhere, that equals $580AUD as the Australian Dollar was buying about 93.57 cents. However, when I go to pay…I notice PayPal’s exchange rate is 90.67 cents. And so now, my total isn’t $580. It’s $600. So just in one transaction, they took $20. And only three weeks prior to this, I had a transaction that totalled $610USD (which was $652AUD), but according to PayPal and their shoddy exchange rate, equalled $677AUD. So in less than a month, PayPal has taken $45 off me for only two transactions. I believe it should honestly be illegal for banks and companies such as PayPal to have their ‘own’ exchange rate. Like what is that? The exchange rate is the exchange rate, and that’s what it should be charged at. And any fees for currency exchange should be clearly outlined and published for anyone to see, not hidden. When I add it up I don’t even know how much money PayPal has taken off me over the years…it would be hundreds. A few cents may not sound like much on the exchange rate, but you’re right, it adds up. And quite frankly I’m sick of it. I seriously wish there was another company other than PayPal who doesn’t do what they do and is as safe as they are, but I’m guessing no such company exists.

    • Peter Sandeen said:

      Hey Lara,

      Yep, I share your frustration. I get that charging currency conversion fees is a part of the business model (for basically all global money handlers). But as far as I know, PayPal is the only one that provides currency conversion receipts that claim no such fees were charged…

      For me, the losses are definitely in the thousands.


  60. Jenny Carter-Vaughan said:

    We’re having real problems with Pay Pal. We have a US$ bank account and are selling a product internationally in USD, which we have to pay for in US$. However when we tried to add our Barclays US$ account the answer from Paypal is a big fat “No”. They will only pay us in sterling (because we’re in the UK) so to get our money out we have to pay rip off charges to Paypal to convert into sterling and then pay to convert it back to US$.

    Clearly PayPal could do something about this if they wanted to, but they prefer to make money converting money that we don’t want converted.

    Does anyone have any ideas of an alternative method of collecting international payments securely which doesn’t involve Pay Pal?

    • Peter Sandeen said:

      Hey Jenny,

      I share your pain…

      Wire transfers are getting more common. But the banks in the USA are still decades behind much of the rest of the world on that front, so if that’s your target market, I don’t know of any good alternatives.

      However, if you’re in the UK, you have a few other similar services (PayPal’s competitors). Take a look at the options. Maybe there’s one that has better terms 🙂


    • Raj said:


  61. Johanna said:

    Yup, I just found out about this. I wish I realized it sooner. Thanks for sharing though.

  62. Alex said:

    I appreciate you taking the time to investigate and elucidate the details of this situation.
    Pay bills process certainly seems at best slanted in their favor and at worst out right criminal. I’m curious however as to their refusal to send American money to another country. Is this legal by international law? Is it legal and business according to US law?
    Given the information you have provided I will be sure not to conduct any business through PayPal that involves transactions where currency exchange or business outside the US is involved.
    Again let me express my appreciation for your efforts,

    • Peter Sandeen said:

      Hey Alex,

      I’m not sure what the US law says about it. But I think they don’t entirely operate under US law, instead, they operate under Irish law (or some other country in Europe) where they have their European headquarters. Although, I’m not sure about that at all.

      In any case, I doubt any of the possible countries would have laws that allow what they do…


  63. SK RAJA said:

    The product cost is about AED 949, whereas paypal charged me AED 998.5.
    They have taken 5% as a transaction is charges, which is very high. I am really unhappy with the very high amount of charge by paypal.

  64. Richard said:

    You mentioned somewhere that you might charge a little extra if customers pay using PayPal but be advised that this surcharge is expressly forbidden in their terms of service.

    Section 3.4:

    3.4 No Surcharges. You agree that you will not impose a surcharge or any other fee for accepting PayPal as a payment method.

    • Peter Sandeen said:

      Hey Richard,

      Thanks for letting me know. I can’t remember saying that (so, if I have said something like that, I’ve already decided not to do it). But really, thanks for telling me 🙂


  65. Leon Mauer said:

    PayPal violates it’s own bi-laws and ensures that they get paid regardless if you win or lose. Example- bought a Chinee phone for $80 because PayPal was on the page. A month later a phone came- knock off-in Chines- and pieces missing. Well their own bi-laws state if broken or not as depicted-so as a buyer I should be reimbursed. Well PayPal and have decided that to get my money back I need to send it back at a cost of $43. At the end of this fiasco I will have nothing except a defecit of $19- and PayPal will earn $9- and will earn $70.99- I have no phone-3 months of aggravation so PayPal is a scam organization- why not use your own credit card- and resolve your own disputes- and not have to pay fees for nothing.

    • Peter Sandeen said:

      Hey Leon,

      I haven’t had similar issues (though I’ve never been in a situation where any such issues could’ve raised), but I’m not at all surprised :/

  66. Thank you for the time you must have spent, detailing the way Paypals fiddles its customers. I use paypals on ebay and sometimes for other transactions and hidden fees crop up all the time. They are never big amounts and sometimes I just haven’t the time to waste trying to trace a small transaction fee but it really annoys me. So thank you for the trouble you have taken in pointing out what unfortuneatly seems common practice in the finacial world. They really are ‘Bankers’ it seems.

  67. Rio Santiago said:

    I agree with you. im from the philippines and working as an online writer for a US company, the conversion for US to PHP is atleast 2 pesos smaller in paypal the actual conversion in my country, not to mention that I need to pay for their 5% commission from my salary. Every month I lose about $50 to paypal

  68. Catherine said:

    Hi. Im a 16 year old and you know how reckless we are. Anyways there is a game that i like to play. But boohoo for me, I can’t get ahead of the game without buying by using a some type of card. I saw the paypal option and thought, oh. i just need to buy a prepaid paypal and put money in it like a gift card. Stupid me did exactly that. Now I had to go through the activation. They asked for my ssn and drivers lisence. But that was after lying about my age because I was desperate at the time and didn’t think straight. So desperate me gave them a picture of those two. Now im pulling my hairs out. I don’t know what to do. Could paypal abuse my information in the long run? Even though I have nothing in my name yet. Also. In the long run, as long as I don’t link my bank account to paypal, they can’t touch my money. Is that correct? Please reply. I know im in the wrong and Im so scared that I’ve set myself up to a dreadful path.

    • Catherine said:

      I know most of you would tell me to talk to my guardian but I want to be aware of what im dealing with. I know I can’t solve anything by myself but I can gain knowledge of the subject for my well being.

    • Peter Sandeen said:

      Hi Catherine,

      Sorry, I have no idea what they will do. But as long as they don’t have your money or a way to access it, I doubt they’ll go after it. But I wouldn’t put it past them based on the type of blackmail they’ve done in the past (hold someone’s account frozen because that person’s family member owes PayPal money).

      • Catherine said:

        But I haven’t owed paypal any money at all. In fact im still waiting for them to “activate” it. Also. I don’t plan on ever using paypal. Im done with these tricks to get into your wallet. Thank you for the reply. I feel assured that as long as I keep my money away from them, it’s safe and sound. P.s when you say “hold someone’s account frozen” are you referring to the paypal account?

        • Peter Sandeen said:

          Hey Catherine,

          Yep, I referred to keeping their PayPal account frozen (and all the money in it). The story I referred to is an old one (a few years at least), but I still think it exemplifies how they work. If they’re willing to blackmail other customers because their relatives do something iffy, I wouldn’t put much else past them either.

  69. Maiya said:

    Lebara mobile responded several times ‘we are facing problem’ when I reached confirmation stage of payment to top up the SIM. Having fed up, I tried with the next button ‘Paypal”, it worked but with costs (i) Service charge of USD 1 and inflated exchange rate. Later it charged USD 1 for another service I could not figure out. Further it charged USD 1.95 to generate PIN, which I could not complete. All these without prior intimation / information and confirmation / permission. This is the first time I am using Pyapal. Should I trust Paypal and continue with it?????

    • Peter Sandeen said:

      Hey Maiya,

      You can trust them to do their best to take money from you. But I still think you can trust them to work pretty much as advertised. The drawback is steep, though.

  70. Supichaya said:

    Thank you for pointing this out.
    I have been using Paypal to send money in foreign currency and every time I look at the exchange rate I was amazed by how high the rate is even though Paypal claimed to use the current exchange rate. As you have pointed out, the exchange rate is different from the rate in any bank in the world. I wish one day there will be a law to protect customer rights in this matter.

  71. Bence said:

    This is very frustrating. I live in Hungary and I have a Hungarian bank account. I receive funds in USD into my Paypal account.

    When I want to withdraw funds from my Paypal account, *the only option is to withdraw the funds in my local currency, in HUF*.

    I cannot withdraw the funds in USD, so currency conversion will be involved. But the Paypal currency exchange rate is very unfavorable! So yes I also lose money due this hidden fee.

    I searched for a solution and there is no other option, I can withdraw only in HUF.

    The only solution is to try to avoid Paypal when receiving payments. I must ask my partners to pay me via wire transfer for example.

    • Peter Sandeen said:

      Hi Bence,

      Yep, I haven’t found a “solution” either. Avoiding PayPal seems to be the best choice…


      • Claus said:

        As a scandinavian paypal user, i have always wondered why the exchange rate was much higher than normal until i read this article, i realize paypal has not just been taking processing fees but also when exchanging money.

  72. So glad to find this as I have just been hit hard by their hidden “fees” (they stole 1000 Swedish crowns on a Ebay buy)
    I noticed two things:

    Ebay show the price of an object in different currencies linked to the “normal” rate of exchange during an auction and the final price. This is the price you think you are going to pay and has very likely guided your bidding strategy.

    Ebay and PayPal are joined at the hip and one believes that the price (exchange rate) will continue through the process of paying, (on small transactions I bet nobody really checks this) but no, the fees we never see kick in disguised as a manipulated exchange rate very much in their favour.

    In my case I didn’t notice what they had done until too late, no warning from their side that they were now moving the goalposts and do I really want to continue?
    I really can’t say if I was offered this option:
    as everything went so fast with Ebays new one-click-and-its-paid syle.

    My theory is they disguise their income from “fees” as exchange rate deals as they are probably easier to manipulate and hide, therefore we will never see them on a receipt.

    • Peter Sandeen said:

      Hey Mark,

      I haven’t noticed that option before. And it doesn’t help if you’re the seller. But the frustration (and scam) work the same way :-/


  73. neil bell said:

    hi peter, a friend posted your thing on paypal and had a read… all dry interesting as i had a similar question for paypal as they said they will not transfer USD or EUROS to my swedish bank as they do not accept anything but KRONER which i find difficult to believe! actually, i have not asked the bank but will because they are giving you less because of the conversion rate they use! anyway, well done for bringing this up and letting people know. neil

    • Peter Sandeen said:

      Hey Neil,

      Sounds very familiar. I assume the deal is the same in Sweden as it is in Finland; your bank probably has no trouble accepting USD to a currency account—PayPal just won’t let you use it (even if they confirm that it’s okay in writing, they’ll back out later).


  74. Markus said:

    They stole me too today!! THE LAST TIME!! They converted EUR/CHF 1.65 near daily FX rate of 1.2160!!?? I WAS RIPPED OFF!! The told me I could choose who will convert the money paypal or credit card company…but all bullshit, I never got such an option or any kind of conversion option at all! I anyone is taking any law steps against paypal then let me know I will join the law suit!! This is huge rip of going on world wide and nobody is aware of it till until it’s too late…

    • Peter Sandeen said:

      Hi Markus,

      Sorry to hear of that, but as you said, it’s going on world wide. I don’t know if there are any law suits against them. Unfortunately 😉


  75. Rituparna said:

    Thank you Peter for your great analysis. I am free lancer web developer from India. I use PayPal for all of my clients. I was thinking the same from many days but not sure. After reading this its all clear.

    Can you please suggest me any other alternative of PayPal?

    • Peter Sandeen said:

      Hi Rituparna,

      Sorry, I don’t know what would be a good alternative for you. That depends on where you work/live and how you want to bill people, so take a look at the alternatives and choose the one that fits your needs best 🙂


      • Mac said:

        For Europe transactions the best way is to use bank transfer, costs only 1-2 euros and you can send or receive thousands.
        For buying or selling overseas it;s a nightmare.
        I am trying to avoid paypal as much as possible, but when dealing with americans it’s difficult.

        • Peter Sandeen said:

          Hey Mac,

          Yep, bank transfers are simplest in Europe. But in my experience, people in the states see them as complicated (which seems to be true since online banking isn’t so common there).


  76. Dave said:

    I noticed that a long time ago, PayPal is using Credit Card conversion standards. If you see on OANDA currency conversion tool , you’ll notice it has drop down letting you choose conversion type, INTERBANK +/-. you’ll see the % fees. Credit Card is 3%.

    So to finalize, PayPal is NOT converting your money based on world clean conversion rate. They behave like Financial institution letting you take your own money out of ATM using Credit Card in a different country which adds 2%-3% on top.

    Thats it.

    • Peter Sandeen said:

      Hey Dave,

      Yep, the rates are similar (though not exactly the same for all currencies) as credit card ATM charges. But they still don’t provide a receipt of the charge, which is illegal at least is Finland :/


  77. Chris said:

    Peter, I am going to share this on our Facebook page. It caught my eye yesterday and I tried digging through our records for an hour so at least I could record the expense, but I found nothing. Saw your page shortly after – this should constitute fraud.

    • Peter Sandeen said:

      Hey Chris,

      Yep, fraud seems to be the legal term. And yeah, you can dig till the end of times and you won’t find a way to include their cut in your accounting.


  78. Helen said:

    Yes, I have been noticing that when I do a currency conversion, the £USD I had converted is significantly lower than the £GBP balance. I detest PP. Good article.

  79. Tom Cunningham said:

    Download now FREE -> not free, you require an e-mail address.
    This is not free, this is requiring me to use my time to read/delete/mark as spam your marketing e-mails when they arrive.

    Shame on you, after your soapbox on Paypal’s practices.
    I might have paid money for your ‘advice’ but not with my address.

    • Peter Sandeen said:

      Hi Tom,

      Sorry to hear I disappointed you. In my vocabulary (and in Finland in general) “free” means “no monetary payment or work.” I totally get that you see subscribing as a payment—I just don’t. As for your need to read/delete/mark as spam my emails, if you don’t want them, just unsubscribe, you don’t have to read the emails to get the freebie.

      I think putting me asking for an opt-in to get a freebie and PayPal stealing from all their customers who make currency conversions on the same line is just weird. If you see them as equally unethical, I don’t know what to say. PayPal does its best to hide the fraud. I don’t hide the fact that you have to give your email even though I don’t explicitly state it; I assume people notice when they write their email into the box.

      Since our perception of ethics seems to differ so much, I don’t know if we’d work very well together. Hopefully you’ll find someone who’s a better match.

      All the best,

      • Theloh Slobus said:

        Thanks for an interesting article, Peter. I just wanted to say that I think you’re far too kind to Tom. Despite never having been anywhere near Finland, I take it for granted that ‘FREE’ offers are often conditional on providing an e-mail address, and I assume that has been the experience of most Internet users, and I’ve never heard anybody complain about it before Tom. And if he didn’t want to risk spam into his normal address, he could easily have created a separate one, just like the one I’m using here (as you might reasonably suspect, Theloh Slobus isn’t my real name). Anyway, when I see a complaint as unreasonable as Tom’s, I have to suspect at least the possibility that you are being punished for telling the truth about Paypal, with the apparent punishment seemingly being every bit as non-transparent as their conversion fees. All the best. Theloh.

        • Peter Sandeen said:

          Hey Theloh 😉

          Maybe I was too kind, but I don’t know what I would’ve achieved by being less kind 🙂


  80. Mihael said:

    Yes, I totally agree with you. Looks like the era of the great PayPal might be ending, since this is clearly theft. I just sold an item for about 100 EUR, so thats my balance on PayPal now (after i got charged a recieve fee), and then bought an item in USD. Paypal automatically offers to covert my EUR to USD at their rate, loose 3 EUR, and pay in USD. Well I didn’t since I noticed the trick and choose to charge my MasterCard, but later on i did a small purchase and just went quick through the payment procedure as usual and already lost 50c at 10 EUR buy, that’s 5% value, which isn’t a lot in money since the buy wasn’t high figure, but it still bothers me. And I can’t convert it back now. I’m starting to dislike the company, might be time to look for alternatives.

    • Peter Sandeen said:

      Hey Mihael,

      Sounds familiar. And yep, they’re definitely ripe for being replaced by a better service 🙂


  81. hp jaeger said:

    I couldn’t agree more with Peter.

    Paypal is an outrageously expensive transaction service comparable to Western Union in the physical world. With the main difference, that Western Union is upfront and honest about their end-to-end charges.

    Paypal built a system which – once your money is on their account, will avoid with everything they can for you to withdraw that money without paying significant additional fees.
    They tell you that they charge you eg. 3.5% if customers buy from you. Thats what you calculate for the cost of doing transactions with paypal. The truth is, once you withdraw that money they’ll steal additional 2.5 – 3% from you for a “forced-on-you” currency exchange you didn’t ask for and you didn’t want, at an outrageous conversion rate (3 to 5 times more expensive than a common bank).

    here my open letter to paypal:

    (edited 16.8.2014)
    Dear Martin Zell
    i well understand that it is quite straight forward to do business in a single local market.
    but what paypal (like many other american businesss) seems to have not understood yet, is, that europe, asia etc. consist of dozens of markets and therefore currencies.
    by taking between 2.5 and 3% from your clients on an unrequested, but forced-by-paypal currency exchange, you make sure, that any business of serious volume will walk away from paypal as quickly as they can. Our business is growing at 10% per month and we are planning our processes well in advance. A few percent of our business transactions so far were going through paypal with which we started less than a year ago.
    Our decision for the moment is taken – we have disabled paypal in most of our GTM platforms and are in the process to completely move over to a number of credit cards and banking cards. This has forced us to establish our own e-payment platform (which up till now was the beauty of paypal – paypal provided this all to us in a conclusive way). It was costly for us to build our own but it gives us the choice now to work with the most efficient transaction services. Our end-to-end cost for credit card payments incl. currency exchange today are at below 3%, banking card payments below 2%. Happy to talk to paypal once your company has decided to start applying common business practice (end-to-end transaction cost of paypas will need to be diminished by 70+%).

    On special client request we’ll still accept paypal payments – with a 7% upcharge (approx. our end-to-end transaction cost with paypal). So paypal will get the couple of thousand Euros per month. This fits paypals business model and this is what paypal deserves. In a nutshell paypal is an outrageously expensive transaction service comparable to Western Union. You’ll need it when you need to transact within a few minutes and when there is no other option.


    Letter from Paypal (dated 15.8.2014)

    Dear HP

    Thank you for contacting PayPal regarding the option to withdraw funds in any currency to your local bank account.

    Money withdrawn from any foreign currency balance(s) in your PayPal account to a Swiss bank account will be automatically converted to Swiss Francs. The conversion will be based on our currency exchange rate at the time you begin the withdrawal. The exchange rate will be shown to you on the ‘Withdraw Funds Confirmation’ page. Please know that this functionality applies for every PayPal customer worldwide.

    PayPal operates in 190 markets and we develop standard policies to ensure we fully comply with regulations in different jurisdictions. While we continuously improve our products and services to serve local markets, some features may not be available now. Please be patient and we definitely value your suggestion.

    Please not that if you have a bank account registered in the U.S., you can withdraw U.S. Dollars to your U.S. bank account.

    Please let us know if you require any further assistance.

    Martin Zell
    PayPal Customer Support

    • Peter Sandeen said:

      Hey Hanspeter,

      Yep, they’re expensive. Really expensive when you count in the currency conversion fee. But what really annoys me is that they hide it and won’t provide receipts of those charges…


  82. George O said:

    Hi, Peter i open an account at paypal but i cant add my bank details because im in finland as a foreign citizen since i dont have a personal ID number i cant open an account in finland so i dont know what can i do, any help will be much apreciate,thanks

    • Peter Sandeen said:

      Hey George,

      I’m not sure, but I assume you can use a foreign bank account. If not, reach out to PayPal and ask them directly because this is such a specific question.


  83. Andrew said:

    Hi, I would love to know how you did to unblock the limit in paypa, because they ask for Social Security since I’m not an american citizen and don’t live in US it’s getting hard for me to get what I do online.

    I use Payoneer to capitalize the money I get, and always loose 1 dollar for every 100, not sure if it’s paypal or payoneer, but at the end of the year is something, but I honestly don’t care I think of it as a payment for a service since I’m not an US citizen and live outside US, but for US citizen is stealing since paypal work with bank of america, they shouldn’t charge for transfers within the US and if they do it shouldn’t be 1% should be lower, way lower.

    • Peter Sandeen said:

      Hey Andrew,

      Sorry, I don’t understand the problem with limits. I haven’t had any problems with anything like that.

      As for Payoneer, I can’t say much because I haven’t tried it or even really looked into it. But only 1% (total) fee for receiving payments is pretty low.


  84. JP said:

    Hi Peter. I stumbled upon this article of yours and would like to know do you know of real online jobs that pays through Paypal? Im based in South Africa and really want to make some extra cash from home as iam currently studying and want to pay my fees.

    If you know please give a shout out

    Thanks hey

  85. Alex Chan said:

    I noticed exactly the same thing on PayPal and I agree it is stealing. I previously purchased a high end camera via a website which offered payment option via Paypal. It then made another purchase and then realised the conversion rate was rubbish. I calculated that Paypal stole £8 from me because of the rubbish conversion rate.

    My tip would be to make purchases on your Credit Cards that charge 0% on purchases both local and overseas. I have now switched to my Post Office Credit Card and I will use Paypal to a minimal.

    My faith in Ebay and Paypal have reach a new low…

    • Peter Sandeen said:

      Hey Alex,

      Sounds familiar. But glad you didn’t lose more than that.


  86. Marj said:

    I use paypal instead of a credit card (on the sites that allow) and I guess no matter what you use somehow some company somewhere is stealing from you, be it interest rates or currency conversion fee.

    • Peter Sandeen said:

      Hey Marj,

      I guess you can see interest rates as stealing, but technically they’re not illegal. But what PayPal does is (to my knowledge) plain illegal.


  87. Sam Chalvet said:

    Hi Peter,

    The exchange rate that is reported by Google, Bloomberg, etc. is valid on paper only. There is always a lag in the business world, sometimes it is in your favor and sometimes it isn’t (mostly they manage to have it in theirs). I will challenge you to find anyone who will give you the exact current exchange rate (as reported by the previously named companies) and then please share the information.


    • Peter Sandeen said:

      Hi Sam,

      Every Finnish bank. Sure, they might be a bit late, too. But they don’t ever have a hidden extra charge built into the exchange rate, which is what PayPal does (they take the current rate and deduct a few percentages from it). PayPal’s exchange rate will never be above the actual rates.

      And I’d challenge you to find any other business that hides the fee into their exchange rate and then refuses to provide a receipt of it.


  88. João Pimentel Ferreira said:

    Excelent text, as a Portuguese I feel exactly the same when I use Paypay for buying in ebay!

  89. Erika said:

    It’s not just with businesses but also with private accounts. My friend had to transfer me money to pay for something. They are in Europe and I’m in the US. They had to pay like $60 to even send me the money and then on the conversion I lost like $300 and my friend had to go and send me more to cover the cost. This was after I called paypal to ask if I could deposit the money in Euros and let my bank do the conversion. They said yes but then they did the bank’s rate was way more favorable to the point where I was getting more then owed. I took a month to get paypal to do undo the conversion so I could refund my friend. On top of that after they re-did the conversion it was 200 euros short of the originally amount. i had to call multiple times before they added the missing amount back. It would have been cheaper and easier if we had done a wire transfer (30euros) but their bank wouldn’t do so to countries out of the EU.

    I travel so I know places charge a commission fee. Paypal should just be up front about it so one can factor that in when sending money.

    • Peter Sandeen said:

      Hey Erika,

      Yep, it’s everyone and every time when the currency changes. I’m actually surprised you even got them to undo and refund anything. Good that they did, of course, but I’m surprised.


      • Shamaz said:

        IS anyone know how much payoneer deducted to transfer the amount from one payoneer account to other..

  90. Farshad said:

    PayPal also adds an extra fee named ‘Cross-border’ fee. Not sure what does this mean. Do they carry money in bags across borders?

    Add this up to low conversion rate and for me total cost raised uğ to 6.7% per transaction. It is laughable because with such rates even a full-featured e-commerce partner such as FastSpring is cheaper than PayPal.

    • Peter Sandeen said:

      Hey Farshad,

      I haven’t noticed the “cross-border fee,” but it sounds quite unnecessary. But I don’t really know anything about it, so can’t comment.

      But yeah, if you’re paying 6.7% to PayPal, you should probably switch 🙂


  91. L.W. Hubbard said:

    I just used PayPal for the first time in a few months and I noticed they’ve started docking 250 yen (2.50USD) just to withdrawal money to my bank account, after already taking their (what I feel is too high) cut to receive funds in the first place.

  92. Spyros Katsavos said:

    Nice article, well written. I knew that paypal was charginh more for convertion but i didn’t knew that forces you to convert when you withdraw money. I have never used it to get money only to send. But what you can do, really? Paypal is so widely used especially in ebay, unfortunatly you can’t avoid. I wish it was stated as different charge but my bank does the same. (it charges me 2% for convertion up to a mazimum fee although but it is not written separately).

  93. salenik said:

    I live in Croatia and had to pay 500 € in Italy
    I used my card with euro currency but they converted € in Croatian kuna and then again in €.
    Difference was 30€.
    when withdrawing money PayPal charges a 5$ fee for withdrawals to card.
    If I have 100, it would be logical that the rest is 95.
    But paypal first change this amount of 100 in my local currency, and then again in card currency. after that they charging a 5$ fee- of course with conversion.
    In every transaction I lose 6%
    100(USD)-3%(conversion USD in HRK)
    97(USD)-3%(conversion HRK in €)
    on my account now I have an amount in € equal to 94(USD).
    Now i have to pay 5$ fee.
    5(USD)+3%(conversion € in HRK)
    5,15(USD)+3%(conversion HRK in USD)
    94-5.30 = 88.70(USD)
    At the end i have a value of 88.7 converted in €.

  94. JimF said:

    In Canada, I have heard that the banks exchange rate being different than other published exchange rates can be due to the fact that a bank will purchase a large amount of foreign currency when the rate is expected to rise. This allows them to apply the higher of two rates,,1. their actual purchased rate or 2. the current published rate.
    So basically, like services of many large companies, it is difficult to nail down an exact rate and definitely impossible to compare one bank to another.

  95. Alvin said:

    Having the same problem here in Singapore. I want to withdraw money from paypal(USD) to my bank(Singapore dollars). The exchange rate on paypal is 1 USD = 1.24473 SGD, while the one on yahoo is slightly over 1.28. That’s more than 3.5% stolen 🙁


  96. Jonathan said:

    Yes this is crazy, i just found out about it today.
    i am dutch and sold a juicer today on ebay for 399GBP , which is exactly 509,08 euro today. (ebay even states this below the 399GBP amount)
    Well, guess how much actually arrived on my paypal account?
    458,83 Euro.
    That is 50 euros quick profit for doing nothing.
    there goes any profit i was hoping live from.
    very funny paypal, this is the last time, trust me.
    i am going to make a British bank account immediately.
    the yearly fees to own a bank account are nothing compared to the fees of just 1 single sale. (can pay the bank fees for 5 years with that)
    Come on people, Time we spread the awareness together now!
    Thanks for enlightening us Peter.
    Blessings in abundance 😉

  97. Janneke said:

    It also happens when you’re a buyer.
    I use Ebay a lot and here’s the thing. Ebay owns Paypal.
    When I go to or (cause they have all the cool stuff) Ebay tells me approx. how much the conversion will be when I buy a certain item that’s listed in USD or GBP. It’s always much lower than what Paypal eventually charges me in Euros sometimes it’s more than 10 cents per GBP that I pay more when paying with paypal. They shouldn’t be doing that they’re making me think something is cheap so I’ll buy it. Then after I’ve pressed the button and want to pay and actually find out how much it is it’s too late.

    Ebay is stealing your money each way they can. 8% selling fee (only on the actual product without shipping that’s why they’ve got a limit on shipping cost that a seller may charge (even if it’s more expensive for you to ship it) so you’ll be forced to up you’re price so they can get 8% from that.
    Then they get 0,35 Euro + 3,5% from the total amount (including the shipping fees) from your sale.
    It’s like being f&&*ed without being asked nicely if you’d like to bend over. (Pardon my French here but that’s how I feel) If there was a more honest competitor I’d switch in the wink of an eye.

  98. Marius said:

    They even admit it:

    I understand that on this transaction, you will have some currency conversion loss. As such, as an once off goodwill gesture, I will credit your PayPal account €##.##EUR in order to cover for the currency conversion loss.

    However, please be advised for the future, that you will need to convert your funds to EUR in order to withdraw to your card.

    • Peter Sandeen said:

      Hi Marius,

      Interesting, I never got a refund… But good to hear they’ve started to change their habits 🙂


  99. Wally said:

    Very good write up!!! I was facing this problem since I moved from Germany to Canada many years ago. Till now my best solution was to use, but few days ago I discovered that they got extremely greedy, too, and now they are charging ridiculous fees. So I looked closer at other options, including Paypal, but in vain. To make things worse – you cannot add a bank account from another country, they allow you to add a bank account only from the country you are residing in. In the past I thought that the bank was ripping me off, when exchanging money, but nowadays this seems to be the most appealing solution. Do you have any ideas or suggestions how one could transfer/exchange EUR and convert them to Canadian/USA dollars, without always paying a solid sum to those “service providers”?

    • Peter Sandeen said:

      Hey Wally,

      I’m not sure about your specific situation. But depending on the sums you’re transferring and the frequency, you might even want to look at some other kinds of services (WesternUnion etc. that operate in similar ways).


  100. HeyHo said:

    Thanks a lot for this true info!
    I just called Paypal since i live in Norway, but i accept payment in USD and EUR for my small business. They told me you can ONLY transfer in NOK to an account in Norway using their own currency rates. And here comes one part of the stealing!
    And the exchange rate for PP as of 21/11/2014 is 8,21766NOK for 1Euro while Nordea’s is 8.4145NOK for 1Euro.

    So guys, is there any other good services where we can transfer/withdraw to our accounts using EURO or USD without converting in the first place?
    It’s much better to do our banks do the conversion and get a much better conversion rate!

    • Peter Sandeen said:


      You could look into Stripe. Lots of people are raving about it, though I haven’t tried it, so can’t say much about it.


  101. Mugged ByPayPal said:

    …Yes Paypal are a bunch of thieves, there are many sites that charge you a crazy exchange rate but the way Ebay advertises a lying cheat of a rate to get your item to look cheap and then Paypals extortionate opposite rate is just donwright robbery. I never realised this until I bought something expensive, up to now I’ve just been frittering away the $ to Paypal, but no more damn you thieves, tell the world, boycott Paypal, boycot ebay, use Amazon, they do what they say on the tin!

    Death to Paypal

  102. Kate Jacques said:

    Thank you for this article, I’ve used PayPal for years and this article said it all. I get paid every month in dollars but I exchange that to British pounds and just by sheer chance, I happened to double-check last month that PayPal were getting the conversion correct. And, of course, they weren’t. They were taking $7.50 out during the conversion. When I contacted them about this, it was quite curious how they responded. Their agent told me “We use an exchange rate set at the time of conversion”, which I told him was ludicrous because there wasn’t going to be a $7.50 difference in any exchange rates. Within a few minutes, the $7.50 magically appeared back in my account and the support ticket was closed, with no explanation, or apology, or anything.

    But as the author of this article states – this month, they’re doing exactly the same thing. I honestly have lost all trust in PayPal and I’m glad this article is exposing their behaviour.

    I fully support the author and urge all PayPal users to look CLOSELY through their transactions

  103. ree leish said:

    Actually, it is true that paypal are ripping its consumers of their money (from my country at least – Philippines). They will convert your money from USD to Philippine Peso (for example) subtracting 2.5% of the conversion fee.

  104. Juan said:

    I havent bought or sold anything this past month, I want to know why I got a statement from PayPal charging me $2.45. I thought I only got charged fees whenever I used PayPal for a transaction. I’ll appreciate any answers. Thanks.

    • Peter Sandeen said:

      Hey Juan,

      Sorry, no idea. The statement should say what the charge is for, though.


  105. Jona said:

    I totally agree with you. I’ve noticed that Paypal currency rate is really low…

  106. Ben said:

    Hi Peter,

    I have just read your blog after finding a 1.24 Euro charge to my bank from Paypal, I looked everywhere and just could not work it out until I clicked on their Paypal statement where I found this nasty fee and looked for another solution which I found last week, I tried it, it works and it works extremely well. I pay different companies within the EU and abroad, therefore Paypal started to cost me a lot\(I was just paying the fees without mistake), I then heard of a new company Transferwise that is currently battling Paypal head to head by charging ridiculously lower fees…Now instead of paying 50 Euro per transactions(I send big amounts..), it went down to 2.50-3 Euro which is incredible!

    Did you ever heard of Richard Branson(Virgin Media)? He is one of their main investor, this is why I have a lot of faith in their company.

    I have contacted their support and they are already working on an API like Paypal !!!! Yeah!!! Finally, a new solution that will cost less….

    I am selling MP3s…..imagine my cost each time I have to sell one via Paypal…

    Thanks again for your blog and hope more will try this new company.

    Just on a side note, you can now create a “Buy Now” button like Paypal…try it.

  107. Ricky Scanlin said:

    I’ve unfortunately known about this for well over a decade, as I got an early start in the online trading business , way back in 2000. Even way back then when I first complained, I had hoped something would be done about it once enough people complained, but 15 years later, the 2.5% fee on conversions remains unchanged.

    Can anyone think of or offer any suggestions on how to avoid these fees? I’ve thought about flying to the US to open a bank account there, then withdrawing cash and flying back to Australia. The amount I’d save would cover the cost of a round trip airfare. I’d just need some free accomodation 🙂

    My bank charges around 0.3% when foreign currency is deposited.

  108. Ricky Scanlin said:


    I heard that google invested around $300 million USD into a failed venture to create competition for PayPal.

    • we need a better solution so badly – hopefully google will get it right.

      I have just another fresh story:
      After paypal limited our seller account again (this keeps happening for unknown reasons from time to time. paypal writes that ‘some unverified activity was recognized’), i submitted them the required docs on 18.dec 2014.
      Since i wrote have a dozen of resolution emails to paypal requiring them to unlimit my account again. Each time i got a few emails back asking me to go to the resolution center and follow the resolution steps. i repeatedly told paypal that i did this already and no open requests were visible anymore on my account. Upon which i got yet another couple of emails requiring me to go to the resolution center and …. you get it. So it went on and on.

      in the meantime it took paypal 27 days to find out on 14. Jan. 2015, that they need yet another set of identity proofing documents. During this entire period my account was blocked against my will.
      But not only that: My monthly subscription at eg. Spotify was cancelled because paypal not only limited my account from transferring money to another account, but also stopped all monthly payments which i had running from that account. Hence my subsctipions were cancelled, and things like music and movie services don’t work any longer. This is quite unbelievably unprofessional.
      I have already taken 90% of our business off paypal and our business by now penaltizes paypal payers with a 7% extra charge in order to cover our cost of doing business via paypal. We consider lifting this charge to 10% as paypals incredibly seller-unfriendly behaviour keeps adding cost to us when processing with paypal. I am deeply offended by paypals ignorant, unprofessional and quite inacceptable behaviour.

  109. Clay Puzz said:

    Currency conversion can never be free of any losses. I you’ve ever tried trading spot currency pairs through a zero commission broker, you’d quickly see why. There is a market for the currency pair you wish to interact – EURUSD in your example. To provide the transaction liquidity, that market has to be open and someone else has to sell when you want to buy, or vice versa. The computers, employees, electricity, and telecom circuits you are using are operating expenses. When you click the mouse to withdraw (or sell EUR for USD), Paypal is going to a spot market through a broker and selling the currency pair for you. If you’re doing this a 2am GMT when everyone is sleeping, who is taking the other side of the trade? Answer: Some guy or robot that demands a premium for staying awake or operating his robot. That premium is called a spread (the difference in price between the bid and ask prices of any market); and there is ALWAYS a spread in every market in the world – used cars, day-old wheat bread, etc. That guy or robot is called a market maker, and he/it only participates (exchanges your currency) if it is in his/its best interest to profit. What used car salesman (market maker) will buy a car for $4000 and sell it for $4000? Don’t you think he will demand a fee for his liquidity by buying (bidding) for $3500 and selling (offering) for $4500? When you buy a used car, do you think he is stealing? Or is this a reasonable / unreasonable way to profit from a transaction for his services of keeping the car lot open? The spread price is for you, the market participant to decide fair or unfair. And you vote by participating, negotiating, or not.

    During the waking hours (trading day) of both sides of the currency pair, the spread (Ppal cost to you) may be tighter (lower). If you’re selling EURUSD at 1am GMT, the participants in the EURUSD spot market are going to demand a wider service premium for filling your order at that hour. That spread for EURUSD is usually never more than say 18 pips. Your example is citing a 220 pip spread – which is quite excessive. But as the saying goes, “the price is whatever the market will bear.”. And you continue to click the mouse after all, becoming part of the market, and you are choosing to bear the spread expenses. The only way markets change is if you stop participating in them. This is Capitalism where there are expenses, but noone forces anyone to participate – it is by free choice, a vast improvement over what we had 1000 years ago. I choose to be happy about it personally, otherwise I’d be stuck farming radishes as a Serf for some Feudal Lord.

    • PSadmin5adgubvi said:

      Hey Clay,

      Thanks for the detailed comment.

      But I feel like you missed my point entirely. I don’t have an issue with a currency conversion fee. Of course, there can be a fee on it. What I have an issue with is hiding it and (most importantly) refusing to provide a receipt of the charge.


  110. Gary Rolle said:

    I was very frustrated with the exact same issues you describe. Especially that they would not transfer USA $$ to a USA $$ account in my country. To avoid the currency exchange fees I opened a bank account in the USA. My Paypal funds are deposited there, and then I later transfer the funds to a USA $$ account in my own country. As I use USA funds for travel, purchases, and also for investing in USA $$ stocks, as long as I keep the funds in USA $$, there are no currency exchange fees. If I ever do need to convert, I do so when and where of my own choosing.

  111. vince said:

    From New Zealand, i realize they charge extra. I thought buying won’t cost anything more than the price of buy. Their conversion cost more than the current currency exchange. You are right about them.



    I notice this manage of the currency exchange rates by Paypal this week with a refund that a seller makes me, so i think that Paypal is a den of thieves.

    My question is, if there are a government office that take care about this bad business practices Paypal makes and protect us from this abuse?

    Another question I have is how Paypal reports to IRS the taxes from the profits arising from its operations including the profits obtained by operations where currency changes are made?

    I join this claim since it seems that this company is beyond of any legislation from governments where Paypal have operation including USA

    • Craig Buckingham said:

      I apologise if it’s been mentioned I don’t have time to read all of the posts, however to put it another way, and I didn’t see it mentioned by the author or in the first 10 posts or so, is this:

      The question that needs to be asked is:

      1)Does Paypal do the currency conversion at the same rates they are charged and therfore no profit is made on the conversion? or
      2)Does Paypal put a margin on the rates it receives and make a profit on the currency conversion?

      If the answer is 1) then there is no hidden fee.
      If the answer is 2) then there is a hidden fee and the transaction is not free.

      • PSadmin5adgubvi said:

        Hi Craig,

        I don’t know what/if they pay for the currency conversion. But in any case, they’ve hidden the fee pretty well from the end user.

        And much more importantly, they don’t provide a receipt of the charge. That’s what my issue is really with…

        • Craig Buckingham said:

          Yes Peter, my feeling is that Paypal are making a margin on the currency conversion either directly or indirectly.

          Indirect method could be they do their conversion through a broker that is a subsidiary company owned by them or they have a business partnership with another broker and derive an indirect profit this way.

          Needless to say, if it is structured this way and Paypal are not passing the conversion rate on directly, there is an additional cost over the wholesale market rate and this extra cost should be shown as a fee.

          I recently did a Western Union money transfer and the currency exchange rate they gave me was virtually the same as the market rates on Paypal rates were about 2.5% worse than that around for the same period.

  113. Guru Prasad said:

    I used PaypalHere, Point of Sale hand held machine that synchronises with Iphone so sell some of the refurbished dental equipment from my new business. We did a total of 3 transaction and sold equipment to a single customer. Just after the last invoice was paid, Paypal team reversed the amount ($7000 Australian) and started asking a huge list of documentation and finally decided to freeze my funds and close my account. I had lengthy conversations with their Philippines call centre in Manilla and they took hours to get to the point and transferred me from dept. to dept. They mentioned that my money ($7000) would be sitting in their account for the next 180 days = 6 months and they would let me know if they want to release the amount for me! I would have no control over that amount as they put my account on limitations and eventually have closed my account.

    I have been speaking to each of their customer service Dept. guys and each time it goes to a different person. I have to tell the story for them from the start again. Nobody exactly knows that they are doing there ! All that they say is they can’t to anything and I need to sit for 6 months until my buyer files a dispute.
    My buyer is happy with the products they have received, however, many Paypal customer service guys and dispute dept. guys have asked me to contact the buyer and ask them to get a refund and return my items. My buyer is happy with the products they have received they don’t want a refund or return the equipment. However, they were trying to help me and hence, spoke to Paypal and Paypal informed the buyer that it was not their business and the buyer could keep using the equipment as they have paid for them. How tricky can this get?
    What is a way around this ?
    My business is suffering as we used credit to buy these items we don’t know how long do we really need to wait not knowing what happens with a substantial amount of $7000 not available for my business.
    This is nothing, but, day-light robbery! Can anybody help ?
    Who looks after these kind of things in Australia?
    We thought Paypal was a globally known brand and used their POS to collect money for our selling our equipment via credit card sale and really don’t know how to sort this out ?

    We have lost our complete faith with Paypal and want to inform everybody that it has been a nightmare dealing with them. Please don’t use them unless you have a lot of money in your bank account to leave substantial money in Paypal account and not knowing what happens with that.
    Really, perplexed this can happen in 21st century. How these things can happen so openly on global level ?? It’s so shameful that a big company like Paypal could do this.
    I’d love to get some answers and feedback from this forum.

    • Lito Pascual said:

      Wow, what a story. I’m so sorry to hear that.

      I feel that I’m not getting the whole story here. Why did paypal freeze your account? Too high of transaction? Is there a limit as to how much money you are suppose to keep in your account? Why would Paypal tell you that your customer has to file a dispute, if it has nothing to do with them? Did they took to themselves to assume that the buyer payed too much by mistake and that Paypal wouldn’t want to be chasing you for a refund in a later date when the fund is already withdrawn?
      I’m just trying to learn here, I’m sorry, I don’t have an answer for you.

    • Ricky Scanlin said:

      Go to the Australian Financial Ombudsman. They will set you right. No one can mess with them. PayPal will pay huge fees to them just because you opened a case, and if they don’t resolve the issue to your satisfaction, they’ll continue to payt huge fees. Do a google for the ombudsman.

  114. Jean Gauthier said:

    Even worst, If you purchase an item let’s say 1000CAD and converted to US with the 2.5% fees, there’s a $25 fees… If for any reason youneed to cancel the order, they’Re not going to cancel the transaction on your CC, they’re going to refund with another 2.5% fees. So it adds up and in total, you get a $50 total fees for a cancelled order…

  115. Gabs said:

    Paypas said: Withdraw money to your bank (FREE??????)
    Conversion from: -$570.00 USD
    Conversion to: P24,462.80 PHP
    Paypal “latest” Exchange rate:
    1 U.S. Dollar = 42.9172 Philippine Pesos
    Google Exchange rate:
    1 US Dollar equals = 44.14 Philippine Pesos

  116. Lito Pascual said:

    Hey Peter,

    Thanks for this report. I’m new to the game and will be accepting payments worldwide through paypal. If I charge in equivalent to $US, for the grand total of the transaction, would this mean that the buyer is the one “paying” for the hidden fees, weather it be currency conversion or transaction fee?
    Then the only thing I have to be concerned about is the additional 1% (3.9% as suppose to 2.9% ) fee. And the $0.30 per transaction. Is this understanding correct?
    If so, why don’t you just charge the buyer the amount you desire to receive to the currency which you will not be charged any additional fees and let the buyer take the hit on currency conversion by having them pay more?
    Is this a possibility? or am I missing something?
    If this is correct, with this go around, Paypal is “stealing” from the buyer instead of the merchant.

    • PSadmin5adgubvi said:

      Hi Lito,

      I charge in USD because that’s the normal currency for most of my customers. Sure, I could charge in EUR to avoid the currency conversion fee, but I’d rather make things easy for my customers.


  117. Igor said:

    They stole at least $28 for something I bought on eBay for total (incl. shipment) of $94.68. This is just too much even if they calculated difference between buying and selling my currency for US dollars. It made my purchase (if you calculate that shipment was $60) way more expensive than I thought. This is worse than what my bank is doing to me – my mortgage is tied to EUR and they are allowed to make much greater exchange rate than what is what you get from any exchange office or central/national bank for our currency. This is called stealing / will no longer buy using PayPal!!

    • KIryl said:

      I have USD card! And I’m buying in USD on ebay. 125 USD price…138 USD taken off my card. 5-6 years before it I haven’t got such a problem! But now they steal money. Convertion from USD to USD! It’s GREAT IDEA! Paypal I hate YOU!

  118. An Nguyen said:

    Hi, I’ve just come across this article and gotta say: True. I actually have found out this big difference in conversion rate between Paypal and Bloomberg exchange rate. Like today, USD/ EUR is 0.87 but in Paypal falls down to 0.85. This is really such a clear stealing from Paypal!
    So far I haven’t found out any other ways but Paypal to receive flows of USD. I have had to withdraw USD from Paypal to transfer into my bank account in Euro. I know I got loss and I feel very annoyed by this thing. Could we have any ideas/ solutions?

  119. andy said:

    I just sold my hifi gear for $1,500 USD,but paypal just give me the same amount of canadian dollar. I can go to the bank and get more than $1,700 canadian easily. I think paypal is just like a DRACULA AND RIDICULOUS.

  120. andy said:

    Is there anyone can do anything about what is being so unfair to payap customer? People always say United States is a very democracy country and how well it developed but I think it is only for the RICH PEOPLE AND BUSINESS. For poor people like me, no way to get help.Paypal just can charge what ever they want,the only think I can do is not using it.

  121. Pankaj Sharma said:

    Hi there,

    Glad you wrote this article. Here’s one example, I receive $250/month from a client, paypal charges it’s fee 4.4%+0.30 USD and what I receive out of $250 is $238.7 in my PP account, I am okay with that. However,I have a problem when PayPal claims, they use real time exchange rates for currency conversions. I always check in before withdrawing my money to my Indian bank account in INR, Paypal exchange rates are always different, I am not sure what exchange do PayPal follow or they have their own exchange. I have been a paypal user for 7 years now and must have paid 1000s of dollars in hidden fees to PayPal by now apart from the normal fees they charge. Really pissing me off!

  122. Thank you for exposing this, Peter. This is the kind of information that everybody has to know.

    Also, it’s not just Paypal. Here is an infographic we did on the hidden currency exchange fees:

  123. Bruno Fehr said:

    Well, I don’t know where is the surprise. If you are a customer and you haven’t read the T&C who’s fault is that? How is Paypal stealing. As a merchant it is in my contract those 2.5% and since I was in a position to negotiate due to my high revenue with Paypal, I did it. Yes, it takes time and allot of fighting but you can cut on the rate as if it was butter.
    If you are a private person using Paypal, change your settings and set you account to charge you credit card in the currency you are performing the payment, this way you will pay your bank for the conversion and not Paypal.

  124. Keri Rengsi said:

    I’m from India and I tried using PayPal for the first time a week ago, well I read in their website that signing up is free. Anyway I hadn’t even made a purchase and got notifications saying Rupees 70(1.13 US dollars) had been deducted. It concerned me because the deduction was done without me having to share my full card details. I immediately removed my card from the account and in a few minutes the amount was refunded back only to have it taken again in a week. As you can imagine I’m really confused about it. Is it legit for PayPal to have done that? Please tell me,and are its services really free outside of the US?

  125. I was considered about these less conversion rates too. So after seeing this post I called the Paypal customer care support and they told me that they charge something around 2% of the conversion amount from each USD they convert. So at the end they show the lesser conversion rate.

    Although I was not satified but at the end they are still charging less.

  126. Nick Lang said:

    Sorry – but the highly rated and reputable “Consumer Reports” organization rates Paypal as consistently the best deal when sending money overseas.

  127. Anupama said:

    Is there a fee of 6% on top of every transaction made on PayPal (to cover Forex)?
    I booked a tour in China, which was 1150 Chinese Yuan (USD 189 / MYR 674) I am paying Ringgits.The tour operator informs us of 6% PayPal fee. So its USD 14 more.
    I try to pay USD 203 (189+14), which is MYR 724 from PayPal Account. I end up paying MYR 750.

  128. Lee Tsui said:

    Totally agree with you, they are stealing $100 USD off me on one transaction and wont allow me to send to a USD account in the UK. It’s really robbery and I bet many people don’t even notice this happening to them.

    Paypal needs to clean this up because I have lost trust in them for not making this clearer, I think 4% is way too high when they are already taking from me on the original money wired to me, it’s worse than Government stealth tax!

  129. In my experience PayPal gets about 10% of any money I am sent through their service. Their currency conversion rate is way off compared to current rates of USD to VND and they charge an additional 60,000VND as a withdrawal fee.
    The false currency rates is stealing and misleading.
    It is too expensive to use PayPal but there just isn’t a better option to receive money online at the moment. I am hoping Google Wallet evolves. Thanks for the post. I think most people who have used PayPal internationally experienced the same thing and we hope for a class action suite.

  130. Gerald Schmidt said:

    Dear Peter,

    you are right on the money (pun intended).
    I couldn’t have put it more clearly.
    Thanks for exposing a big lie

    Greetings from Vienna, Austria

  131. River Wright said:

    [[Apologies if this is a very old post, there are no dates.

    I had a similar issue with PayPal. I have had many problems with them in the past week, so I sent them this half-serious/half-exaggerated note (after they sent a generic response signed “PayPal” asking for a detailed, specific response). Not sure if they will show, but used many italics to note the sarcasm laced throughout the message.]]

    Dear “PayPal”,

    Firstly, MAN I feel so special that ALL of PayPal has read and responded to my email.

    HA! Gotcha! I already emailed you “as many details as I could” about my problem and was very specific, but thank you for this generic, unhelpful email that referred me to information I had already read before finally resorting to emailing “support”.

    A few questions:

    1. If you charge to convert USD to CAD, why was there no clear warning saying such (One that was readily available and not hidden in the User Agreement–c’mon you know no one reads those. Oh wait! You DO! Sneaky, sneaky….)? If you are going to charge $.26 for a $5.01 exchange (a 5% fee), then that information should be very clear.
    2. Why would your exchange rates be any different than every other place that I have looked? You claim yours is the most “current”, yet everywhere I go $5.01 USD is $6.26 CAD, not $6.01 CAD. And even so, you claimed a conversion of $5.01 USD would be $6.07 CAD. I see $4.75 USD/$6.01 CAD. I am $.26 short of what you claimed to be the exchange. Did you conveniently factor in what my $5.01 would get me, even though you funneled away the $.26? Awww. How sweet. What you did is stealing. Thank God, Joseph Smith, and Buddha I found out you were stealing funds on this small payment rather than a larger one.
    3. I mentioned an outstanding balance due to *you* changing my primary payment settings. You clearly did not respond to my very detailed, specific original email (as this response is as generic as it gets) since there was NO MENTION of how to even start to resolve that issue.

    Please get back to me when an ACTUAL customer service rep reads my original email to your “support team”.

    River Wright

  132. Tom said:

    This is NOT a fee or a charge. You are buying Euros from PayPal and paying for them with USD (or whatever the case may be). They are clearly telling you the price for those Euros up front. Of course they mark the price of these Euros up a little. Everyone who sells things marks the price up. Do you expect them to change money for you at no cost? No one does that.

    If you go to the grocery store and buy an apple do you think they are selling it for more than they paid? Of course. Do you ask them for a receipt that shows the “hidden fee?” If you ask them “Is there any fee for buying this apple?” they will say “no” too. Are they stealing from you?

    Anyone who deals in multiple currencies should be educated enough to look at the offered rate and decided if that’s a competitive rate or not before they buy. (Just like anyone buying apples should be able to shop around and figure out what a good price is.) If you really looked at that exchange rate and thought you were getting a mid-market rate then you are in over your head and you are lucky you ended up at Paypal where the rate is actually quite good. Next time you are at the airport change some money at one of those little booths. There they might mark the rate up 5% (which will _not_ be called out on the receipt, just like with Paypal) and then tack on a fee — a _real_ fee — and that will be listed on the receipt.

  133. John Dave said:

    Hello, I noticed the fee. I am a personal/small seller on internet as long as I can profit from selling goods I am ok with it (surely knowing the fee is important for making price to make profit in first place as you already stated that the main problem is PayPal hiding the fee.).

    Of course, I am not trying to say something good for paypal.

    To avoid the conversion rates, I have tried to ask my buyers to use my primary currency to pay me. (some may pull off the deal though, so normally I will just let it be as I already courted the fee. *again, as you say user should know the fee, and your post surely help.)

    If you run a eshop or self own website, I believe PayPal API can select what currency to use.

    PS. another PayPal fee is 5% of total if the money is used in buying goods or service. (same way as above, I could ask buyer to use “friend or family” to avoid it, but it may make my deal seems like a scum)

    also, if you withdraw a small money below a value (around US$150 in my city) you have to pay a fixed fee too (around US$1 in my city)…… (I read the FAQ, if I remember right withdraw to bank in US don’t need fee, but I maybe wrong, but fee apply in my city it is for sure.)

  134. Fred Winchesterton said:

    You can’t possibly expect, anywhere, to get the rate that you see on Google Finance/Yahoo Finance/Bloomberg, etc. Those are mid quotes, you’re always going to have to pay more if you’re buying the currency and receive less if you’re selling. Bid and Ask.

  135. anakonda said:

    I am currently having the same problem. Transferring every month UK pounds to my Finnish € account. Currently, the rate is 1.44 but Paypal offers 1.39 so stealing quite a lot. In the UK, you can’t even use any other payment service than Paypal or you loose some customers. I am sure that if I had a bank account in the UK, transferring Pounds to my Finnish bank would give better rate and less fees in the end. Paypal seriously needs a competitor.

  136. tapan said:

    PayPal’s effective rate is closer to 10% from my experience.

    I have been a PayPal customer for a really long time but more recently its becoming unaffordable for a small business like mine to continue using PayPal to receive funds.

    Not only do they charge a heavy upfront PayPal fee but they also give an extremely unfair exchange rate.

    Just today I received two sums of money
    62.4 USD = INR 3969.88
    419 AUD = INR 19660.48

    This is based on the International Exchange rate as of today, so ideally I should receive INR 23630.36 less any PayPal fees.

    However the withdrawal request I just placed to have the funds transferred to my bank account shows I will receive a net of just INR 21305.26 in my bank account after 5 days. Thats a whopping INR 2325.1 by way of fees and a unfavourable exchange rate (a full INR 2 less than market)

    Effectively in percentage terms that’s 9.83 % of the total transaction value.

    I am forced to explore other alternatives if from every payment PayPal is going to deduct an average of 10% . In some cases even my margins on products/ services I sell/resell are not as high.

  137. David said:

    I sell goods on eBay with a very little profit margin. Paypal currency conversion rates eat away half of it.

    I do use Halifax Clarity credit card for eBay purchases because it offers interbank exchange rates and 0% transaction and 0% exchange fee. And PayPal has remembered my choice and whenever the purchase is in foreign currency and I select this card, it automatically keeps the transaction in sellers currency. For example if I bought something today for $144, it would cost me £91.90 if I bought it with Halifax Clarity credit card in original currency. If I sent $144 from PayPal balance, it would cost me £95.70 using ‘Family and Friends’ option.

    However if I sent money for goods to seller directly, that would incur PayPal credit card transaction fee. Paypal would charge me $149.92 if I chose the credit card and at Master Card conversions rate it would be £95.67. So basically I would save 3p if I used my credit card.

    I would not call this stealing though. The exchange rate is displayed clearly. If you bought foreign currency at exchange boot which says, ‘No exchange fees’, you would be presented with currency selling and buying price, not fee.

    PayPal fees are competitive. I am not defending PayPal but stealing is a word a bit too loud.

    When you sell something not at a price it costs but at a price it’s demanded, that’s called marketing not stealing. It is basis of any successful business.

  138. Bill K said:


    Since I don’t see dates on any of the entries, I’m not sure how current your information is, but I just searched PayPal for their exchange rate and found it clearly explained: “We receive a wholesale rate quote from our bank twice a day and add 2.5% to determine the retail foreign exchange rate to apply to transactions that involve a currency conversion.” That seems pretty transparent to me – not “hidden” as you’ve argued.

    I’m not saying you can’t find better deals, but it’s certainly not uncommon practice for any bank or currency exchange office to use a “retail” rate rather than the mid-market rate you seem to be suggesting they should use. Those retail rates can certainly be infuriating, but I think it’s a stretch to call that “stealing.” If you want the mid-market rate, you should look at an online currency exchange service like CurrencyFair or TransferWise.

  139. kaushik said:

    Yes You are right peter.
    They use their own exchange rate which is always lower than current rate. That is why they name it as “Paypal Exchange Rate”

  140. Adrian Busuttil said:

    I purchased an item on ebay costing GBP340. To convert to EUro, latest currency rate gives this to around €465. Paypal tried to charge me €488, as per article listed with the ‘current conversion rate that is around 2.5% different. Solution to get around this was simple. When paying there is an option to let Paypal charge you with the source currency and then your bank will convert this to Euro. I selected this option and presto my bill came to around €468.

  141. Paul said:

    Paypal applies an approximate 2.5% spread above the official bank rate in order to cover any losses incurred by the sudden fluctuation in the market – however , this almost never happens and as a result Paypal will keep the 2.5% fee.

    This stop loss stuff is very poor , but you agree to their exchange rates before process so who can complain?

    I notice all other payments providers , eg : Stripe,2Checkout all use similar spread above sell methods – so it’s unavoidable.

  142. Vincent said:

    Just bought a lens ($1000) on Ebay. The given exchange rate brought me here:

    Google & 1 eur = 1.118 dollar
    Paypal: 1 eur = 1.084 dollar (this rate was possible 6 weeks ago)

    Yes, I think I just got ripped off. Only payment through Paypal was possible.

    Hopefully enough journalists/competitors will pick this up, so a fair fee will tranparently be asked in the hopefully near future.

    Thanks for helping Peter.

  143. Cathy Bergen said:

    I’m a Canadian resident who only uses PayPal for straight up purchases, but I almost never deposit funds to my “PayPal Account”, but rather ensure that the appropriate funds are in my primary account for PayPal to withdrawn from. Most of the purchases that I make are in USD. If I were to open a USD bank account, and changed my primary account to said USD bank account, would PayPal withdraw USD to make the purchase?
    No, I’ve not even bothered to ask Paypal, as their Customer Service department gives me a bloody headache.

    Thank you for all of the information.

  144. SkiFi said:

    as I live in Europe currency converison is a daily Routine .. for my sent orders I try to ask everyoen to send me EUR but it happens that I get USD, GBP, CZK etc .. I noticed the fee right after first time it happened I mean I noticed the difference in Exchange rate and I had to readjust my fees to it … in my Point nothing really bad becasue this is not often still PayPal is a good sollution for me but yes the fees should be clearly stated !!

  145. I agree with you .. they are thieves!
    Any other similar websites people can recommend?

  146. Christos said:

    I’m glad to know that other people than me have the same problem with me.

  147. joe said:

    Thank you for the information. I just started using Paypal last month. I got a bank statement yesterday that provoked me to give them a call. The telephone worker barely spoke English and wasted a bunch of my time. She was not able to even find my transactions. I will not be using “pay pal” again. The exchange rate thing is intended to confuse and frustrate, may even be (should be) criminal.

  148. Paul said:

    If it comes to converting currencies, I use transerwise. Check it out. 😉

  149. Dave Kinsella said:

    Amazon do the same thing if you buy from them in a currency other the one for the country in which the site is run. So I buy from to Ireland. And I realised after about 3 years that their currency rate is always higher than the banks. By about 3 percent. I figured they had stolen about €100 from me in this way over the course of 3 years. Multply that by thousands or millions…

    But don’t ever cross their line when selling either on Amazon or through Kindle or CreateSpace or you will be banned for life, with no hope of ever getting back in. So states the terms of agreement.

  150. aliosa said:


    HUGE FEES for each transaction (~ 10%)

    For card confirmation PAYPAL takes 1,5 euro and never received back !
    I wrote to PAYPAL but nothing !

  151. aliosa said:

    YES PAYPAL takes fee from receive and sender.

  152. Terror Martin said:

    I don’t know if this article was posted this year or last year and it is just an old article, can’t find the date for it. But, I knew it! I remember seeing that 2.5% conversion fee somewhere in their user agreement or on their website but now, I cannot seem to find it and I don’t remember where I saw it but I definitely did. And I know they charge this ‘hidden fee’ because for example, I remember trying to put through this Ebay order that cost USD$375, and I knew there was at least USD$377 on my card ( I hadn’t ‘refresh it’ in quite a while , my bank is set up in a way where your money doesn’t go directly onto your card but goes onto your account when you deposit it so, you have take the money off of the account and tell them to put it onto the card), moreover, I tried to place the order for USD$375 but lo and behold, my card was rejected and the order didn’t go through I had to contact my bank to see what the problem is my bank said ‘insufficient funds’ and the charge for the fee was more than USD$377, so I ‘refresh’ my account and never really thought of it until I started researching the Internet because I just felt something was really ‘not right’ and I was being charged a hidden fee which doesn’t even show up. But now, I know I am not being paranoid and I am not really searching for something that is not there.

  153. Mike Cogswell said:

    Great Blog! I am in the US ..I recently bought an item from Japan, when I saw the x-rate I was like ..what heck is this? It was 30 bucks more then any convert tool I could find. Surprised, I figured they added a fee, but when I checked the transaction details the Yen x-rate was much lower then the going rate, I was expecting to see a rate for that day or even plus/minus a day would have been ok. I would rather see an accuracy x-rate then have the fee itemized on a separate line item ..seem like a game of smoke and mirrors to me! Keep up the great work! Mike


  1. […] PayPal is stealing from its customers with carefully hidden fees (with no receipts). You can lose thousands of dollars a year if you don't protect yourself.  […]

  2. […] the complaints against the online payment network are typically predictable (the fees are unreasonable and unclear, their customer service is severely lacking, and they have a penchant for closing and limiting user […]

  3. […] PayPal Steals With Hidden Fees (and how to protect yourself) (Peter Sandeen) […]

  4. […] from it: How many can you sell? How much can you charge? How much will your payment processor take (or if you use PayPal, remember to count how much they steal on top of the normal fee)? Will there be refunds (and how much do they cost you)? Will you pay for advertising? Are there […]

  5. […] charge you a commission. That might sound like a good thing, right up until you realise PayPal exchange rates are shockingly different to the ones you’d see on a forex site like [Hat tip to Peter Sandeen for pointing out […]

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