# Why doesn't paypal charge the same pounds to dollar rates as the currency converters? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [July 19, 2014, 4:37am UTC](https://boards.straightdope.com/t/why-doesnt-paypal-charge-the-same-pounds-to-dollar-rates-as-the-currency-converters/693511 "2014-07-19T04:37:46Z")\ **Posts on this page:** 8\ **Page:** 1
**Author:** ![aceplace57](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/aceplace57/32/3500_2.png) [@aceplace57](https://boards.straightdope.com/u/aceplace57)\ **Post date:** [July 19, 2014, 4:37am UTC](https://boards.straightdope.com/t/why-doesnt-paypal-charge-the-same-pounds-to-dollar-rates-as-the-currency-converters/693511/1 "2014-07-19T04:37:46Z")
I used these two online converters to see what a item would cost in pounds. > **[40 GBP to USD - British Pounds to US Dollars Exchange Rate](https://www.xe.com/currencyconverter/convert/?Amount=40&From=GBP&To=USD)** > > Get the latest 40 British Pound to US Dollar rate for FREE with the original Universal Currency Converter. Set rate alerts for GBP to USD and learn more about British Pounds and US Dollars from XE - the Currency Authority. > **[Convert Pounds Sterling (GBP) and United States Dollars (USD): Currency...](https://coinmill.com/GBP_USD.html)** > > Calculator to convert money in Pound Sterling (GBP) to and from United States Dollar (USD) using up to date exchange rates. they gave the almost the same value. I go to Paypal (a few minutes later) to make my payment and get charged more (over eight bucks more)? Paypal indicated a service charge but that was paid by the seller. (they show what I paid and what the seller got) What’s up with that? Why can’t I go to a currency converter and know what the heck I’ll have to pay? ---
**Author:** ![Lord\_Feldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lord_feldon/32/341_2.png) [@Lord\_Feldon](https://boards.straightdope.com/u/Lord_Feldon)\ **Post date:** [July 19, 2014, 5:26am UTC](https://boards.straightdope.com/t/why-doesnt-paypal-charge-the-same-pounds-to-dollar-rates-as-the-currency-converters/693511/2 "2014-07-19T05:26:19Z")
PayPal bakes a [2.5% conversion fee](https://www.paypal.com/mh/cgi-bin/webscr?cmd=_display-fees-outside) into its exchange rates: > [@](#): > > If your transaction involves a currency conversion, it will be completed at a retail foreign exchange rate quoted to PayPal by an international financial institution, which is adjusted twice daily based on market conditions. This exchange rate includes a 2.5% fee above the wholesale exchange rate at which PayPal obtains foreign currency, and the fee is retained by PayPal. 2.5% would only account for less than $2, but I imagine they get a range of quotes and pick the one that’s the worst for you, whereas the currency converter sites would look at an average. (Imagine if you bought something that cost 10 gallons of gas. PayPal would buy the gas at the cheapest station, charge you the amount quoted by the most expensive station plus 2.5%, and evidently not even send the whole 10 gallons to the seller.) ---
**Author:** ![aceplace57](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/aceplace57/32/3500_2.png) [@aceplace57](https://boards.straightdope.com/u/aceplace57)\ **Post date:** [July 19, 2014, 6:46am UTC](https://boards.straightdope.com/t/why-doesnt-paypal-charge-the-same-pounds-to-dollar-rates-as-the-currency-converters/693511/3 "2014-07-19T06:46:56Z")
A Sweet Deal for Paypal. ☹ I try to avoid transactions with overseas sellers. But it can’t always be avoided. I remember when Paypal started. It was just a convenient and secure payment service for Ebay. Now it seems very much like a bank. ---
**Author:** ![Lord\_Feldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lord_feldon/32/341_2.png) [@Lord\_Feldon](https://boards.straightdope.com/u/Lord_Feldon)\ **Post date:** [July 19, 2014, 7:03am UTC](https://boards.straightdope.com/t/why-doesnt-paypal-charge-the-same-pounds-to-dollar-rates-as-the-currency-converters/693511/4 "2014-07-19T07:03:04Z")
Of course, there’s always going to be _some_ fee for converting currency. I just don’t know if PayPal is better or worse (although I have my suspicions). You’re not going to find pounds sold at cost any more than you’re going to find gasoline or oranges sold at cost. ---
**Author:** ![Cazzle](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cazzle/32/75_2.png) [@Cazzle](https://boards.straightdope.com/u/Cazzle)\ **Post date:** [July 19, 2014, 11:34am UTC](https://boards.straightdope.com/t/why-doesnt-paypal-charge-the-same-pounds-to-dollar-rates-as-the-currency-converters/693511/5 "2014-07-19T11:34:30Z")
PayPal has always screwed international users on the conversation rate. I remember it being a problem when I first started using the service, back around 2000. ---
**Author:** ![jtur88](https://avatars.discourse-cdn.com/v4/letter/j/e9c0ed/32.png) [@jtur88](https://boards.straightdope.com/u/jtur88)\ **Post date:** [July 19, 2014, 4:03pm UTC](https://boards.straightdope.com/t/why-doesnt-paypal-charge-the-same-pounds-to-dollar-rates-as-the-currency-converters/693511/6 "2014-07-19T16:03:02Z")
The currency converter presents a fictitious midpoint in the spread between the buying and the selling bid for the currency. PayPal uses the bid quote that represents their position in the transaction, either as a buyer or a seller of the currency… ---
**Author:** ![aceplace57](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/aceplace57/32/3500_2.png) [@aceplace57](https://boards.straightdope.com/u/aceplace57)\ **Post date:** [July 19, 2014, 7:05pm UTC](https://boards.straightdope.com/t/why-doesnt-paypal-charge-the-same-pounds-to-dollar-rates-as-the-currency-converters/693511/7 "2014-07-19T19:05:26Z")
So far I haven’t dealt with Euros. I’ve bought a few items from UK sellers. But they took pounds. I guess before long any overseas seller will require Euros? Ebay brings the world together. I’ve even bought a couple cd’s from Australia a few years ago. ---
**Author:** ![astro](https://avatars.discourse-cdn.com/v4/letter/a/9dc877/32.png) [@astro](https://boards.straightdope.com/u/astro)\ **Post date:** [July 19, 2014, 8:36pm UTC](https://boards.straightdope.com/t/why-doesnt-paypal-charge-the-same-pounds-to-dollar-rates-as-the-currency-converters/693511/8 "2014-07-19T20:36:35Z")
I do a lot of selling on ebay. IMO the 2.5% fee is a pittance for the convenience of being able to buy something halfway around the world in a different country with a completely different currency from a small seller who does not do currency conversions. It’s an astounding bargain. [This complaint reminds me of this](https://www.youtube.com/watch?v=uEY58fiSK8E)