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Avoid PayPal Money Transfer Currency Conversion Fees | CurrencyFair

June 26, 2018 how-to / PayPal

A Guide to Avoiding PayPal’s Conversion Fees

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PayPal is a popular way to send and receive money and to pay for purchases online – it’s fast, convenient, and a fairly simple way to handle online financial transactions. However, one very significant downside – especically if you are using PayPal to transfer money abroad – is how unfavorable PayPal’s exchange rates and expensive their transfer fees are.


As we shared in our recent article called Money Transfer Companies Compared, Paypal has been great for spreading online commerce but as a way to send money from one country to another, PayPal exchange rates are not bringing value or savings to their customers.

Some people still believe that Paypal is free for currency exchange. No, it’s not – it’s actually very expensive.

How to avoid PayPal’s money transfer conversion fees

Our friends at Monito have created the below infographic to explain the process involved when you use PayPal for international money transfers:

Infographic: avoid PayPal fees for international money transfers

When transferring money in a foreign currency, there is always going to be a fee for that service. As you go along, you will come to realise that PayPal is similar to the costs of a traditional bank – it’s certainly a lot more expensive than CurrencyFair.

A traditional bank is typically the most expensive way to send money abroad. They take the standard exchange rate (known as the interbank rate) and then add a hefty margin on top. They then add on an expensive sending fee for the honour of sending your money for you. PayPal doesn’t charge you the upfront fee. Instead, it simply rolls the cost into the PayPal exchange rate margin.

See how we compare to other online money transfer companies

What is the Real PayPal Exchange Rate?

Unfortunately, it is difficult for you to work out exactly what the PayPal currency conversion rate margin really is (and it’s not really in their best interest to promote that fact).

Our previous article on PayPal and other money transfer companies highlighted a discussion forum devoted to understanding the hidden elements in the PayPal exchange rate:

“Regarding getting a good estimate; PayPal says here that they base their rate on the ‘Interbank Exchange Rate’ and that ‘Customers may use these rates as a reference’. However they of course go on to say that these rates are not guaranteed, and if you want the precise rate you need to see what rate they apply in the transaction. I am not aware of any way of obtaining the precise rate programmatically.”

Starting at 2.5% and ranging up to 4% depending on your country of residence, PayPal’s exchange rate slices large chunks off your money transfer.

Why is CurrencyFair so Much Cheaper than PayPal?

We compared how much you could be saving with CurrencyFair and avoiding PayPal’s hidden fees (updated December 6th 2017):


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