A friend suggested setting up PayPal or Venmo so I can receive money rather than use ATMs while traveling. Generally speaking, how does this work? E.g., do the funds need to go to my bank account, or is it like a virtual credit card, or…? Do they take a cut? Does the currency convert if I’m traveling and is there a fee for this? I’ve sent donations via PayPal but have no idea how the other end functions, and I know nothing about Venmo. Thanks.
All of the above.
The ‘traditional’ way to use paypal to receive money is for the person to send it to you, then you deposit it into your checking account. However, you can just leave the money there and spend it at other places that accept paypal. The next time you send someone money it will (IIRC) deplete that money, then take the rest from whatever account you want it to (even another credit card).
Plus, now, you can use it at brick and mortar stores as well. On many credit card machines you’ll see options for Paypal/Venmo. The CC machine will display a QR code. Use the app to scan the code and transfer the money.
Also, paypal does have a credit (debit?) card. However, I don’t have one, so I couldn’t tell you if it works like a traditional credit/debit card or more like paypal.
You already have a paypal account I assume, since you’ve sent money to others. If someone wants to send you money, just have them use the email address attached to the paypal account. As for fees, if they send the money ‘as a friend’, there’s no fees. And if you transfer money to your bank account in 2-3 days (as opposed to ‘today’), there’s no fees.
It can change currency. But I couldn’t tell you what the fees are for that. I’ve sent money from the US to Spain a few times and I don’t believe they were charged for the transfer itself (since I did it ‘as a friend’) but I couldn’t tell you if there were any conversion fees.
Slight nit - one can setup PayPal outgoing with only a credit card to buy stuff or pay friends. To get / spend any incoming funds you need to provide them with bank acct info. I did some (legit) survey for which they stated they’d pay all respondents $5 via PayPal. It sits in my balance, untouchable, because I haven’t given PayPay my bank info & don’t intend to, either.
Venmo requires a cell phone & texting capability. OP talks about traveling; if traveling internationally, depending upon the country you’re in & your cell phone plan you may either not have service &/or pay per call/text/data used. It’s not specifically a fee to use Venmo, but it might cost you something because of the plan/country combo for your phone. Probably not as big if you’re with one of the big carriers over having your cell plan with a MVNO
I asked my brother who is extremely well traveled and his answer was…it depends.
He recommended getting a credit card that has no fees for currency conversion. Those fees tend to be about 3% but, of course, read the fine print. That said, those cards often have a fee just to have it. Is a $100 fee for the card worth it if you only spend $1000 and incur $30 in fees? You need to do the math and decide.
ATMs will certainly hit you with a fee but these days it is rare to need cash unless you are in rural places. That said, it is probably worth keeping $100 in cash in the local currency in your front pocket while traveling. You will pay a fee for it. Consider it insurance.
I checked PayPal’s page and it seems they charge a 3% fee for currency conversion but it is really pretty complicated and hard to tell. For instance, I am not sure if they charge you a fee to PayPal someone in Spain $100 in US currency (assuming you are a US customer).
The other confounding factor is conversion rates. Are you getting a good or a bad conversion rate? When you buy item-X and swipe your card or PayPal it what conversion rate is being applied? It is not remotely obvious. However, MOST currencies do not fluctuate much so, according to my brother, avoiding that 3% transaction fee is what will save you money. Unless you end-up somewhere like Russia where the Ruble crashes overnight. Chances are that will not happen…if it does, sucks to be you.
My brother’s recommendations were have a little of the local currency in cash in your pocket and get a credit card with no foreign transaction fees. That will not be PayPal or Venmo which will charge you. But, in the end, you need to do the math based on how YOU will travel and the money you expect to spend. Also, realize you will always pay something extra because a conversion is happening. Somewhere, somehow, that will add a cost that is unavoidable. Even if you hand US dollars to the person they likely raised the price a bit because they are assuming the conversion risk and hassle to do it.
Also, he carries 2-3 unsigned checks as a last resort. Not many will take them but some will. In a pinch it might help and is easy to do.
I’ve had PayPal for a long time and have always been able to receive funds to my PayPal account and spend them with PayPal without giving them my bank account information. I hope this has not somehow changed? Is there a reason you don’t just use PayPal to buy something with your $5?
Upon looking again (& it may have changed since I last looked, which has been a while) I need to either give them a bank acct to send it to or give them SSN & DoB to be able to keep it in PayPal & use it. $5 isn’t enough for me to sell out my info. I’m sure every hacker out there would like to get into their systems. They have to be perfect 100% of the time. Target wasn’t; Home Depot wasn’t, Equifax wasn’t, others too. That potential hassle isn’t worth $5.
TL/DR - you can sign up to send money via PayPal w/ just a credit card but to get funds in & use them one needs to give them additional, personal, non-public info that then makes one potentially vulnerable to identity theft.
Except I never gave them any info except a credit card and my e-mail and I get to spend money people send me using paypal. So how do I do that??
I don’t quite understand what they are hoping to achieve with this. Are they saying it is common for foreign merchants to take Paypal or Vemno (and cash) but not a US debit or credit card? Or that its common to take both but the fees are less for paypal/vemno?
Neither of these seem to be the case to me, though I’ve not done tons on international travel that recently. If your bank and credit card charge a fee for international transactions, I’d shop around for one that doesn’t (the pre-paid ones are scam IMO. just get a regular US card that has no fee for international transaction).
Or something else I’m not grokking? Are you talking about getting money from the US while you are abroad? If so thats just a transfer between US accounts, I’d look at Zelle.
I think you need to explain more of your use case here, because this doesn’t make sense to me. The reason to use an ATM while traveling is to get cash so you can give the cash to merchants in exchange for goods and services.
How does Paypal or Venmo help with that process? If a merchant takes Paypal they almost certainly take credit cards, so you could just use a credit card.
If someone sends you money via Paypal or Venmo, you will have a Paypal or Venmo balance, but that will not really help you purchase goods or services.
It seemed easy enough to find the answers, imo. Though we may have been asking different questions.
That PayPal page says that making a purchase with PayPal is free, but there is still a fee for currency conversion. IE just buying funds in your PP account.
Transferring to someone (international or not) has a possible fee depending on the source of the funds (bank account, Amex, non-Amex) with a currency conversion adding a 5% fee, (minimum $1 to 5 at max). There looks to be a near nominal fee for the recipient. (30 cents USD, 0.35 Euro)
I’ve sent money via PayPal to a friend in Canada a couple times and I never noticed any fees dealing with the small amounts I was sending. (Under $50)
But dealing with more volume or amounts would make it more attention worthy.
I know little about Paypal and nothing about Venmo, which is why I’m asking. They were recommended in response to me saying I was looking for an alternative to using ATMs in Europe. Perhaps the person who suggested them didnt take in that I will indeed be in rural areas where cash is needed.
Ok, I think the person who suggested them didn’t really have a clear use case either. Just ignore the suggestion and use ATMs.
Yeah this really isn’t good advice. Paypal and Vemno are not alternatives to ATMs in any sense. They an alternative to wiring money. However the money ends up in your US account (Paypal, Vemno, a wire, a check) you still have the problem of how to use that money to pay for something in Europe. The only 100% sure way is hard cash, though places that only take cash are less common in Europe than the US.
Your time is better spent making sure you have a US credit card that is accepted in Europe (has the right chip+PIN combination which is a whole thing) and your credit card company doesn’t charge you a fee to use it.
And never choose the currency conversion option at the ATM, this is 100% always a scam. It might as well say “Would you like us to take some of your money for no reason”.
Ok, now that I’ve said that there’s no reason to use Paypal or Venmo when traveling, I realized that there kind of is, which is that sometimes your ATM card gets lost/stolen, and having a way to access and transfer money quickly in some form from a computer/phone can be useful.
A while ago on a trip when I was at an ATM someone approached me and said that her cards had been lost or stolen (she was clear, I just don’t remember which), and she needed some money for a train ticket home and could Venmo me the money. Obviously this could have been a scam, but there were enough elements of the place and the story and the woman that it seemed legit enough to me, and it was not a huge amount of money, so I took the risk and gave her the money. It turned it not to be a scam. The transaction went through and was never reversed, and I and Venmo helped a fellow traveler a little.
So if you lose your ATM card but still have your phone, having a Venmo account might help you get some cash money. Just find the nearest sucker and tell them your story.
Thanks, everyone. Very helpful and interesting!