As discussed in previous posts, once you’re using PayPal to sell your stuff online, you will also want to eventually withdraw the money you make into your bank account so that you can actually use it. Here’s where things get a bit nasty, unfortunately.
If you have a US bank account and a US PayPal account, you can stop reading right here. You’re in luck. All you have to do is attach your bank account to your PayPal account and withdraw USD from your PayPal account to your bank account. There are no currency conversions to worry about, and the transfer itself is free from PayPal’s side.
If you are the owner of a non-US PayPal account and you don’t have a US bank account, things are not so pretty.
You are given two options (depending on your home country, it might even be just one option):
- Withdraw to a debit or credit card
- Withdraw to your local bank account.
By the way, did you know that you can now buy Bitcoin and cryptos with your PayPal account on Coinbase and eToro? Read my guide to buying crypto with PayPal to find out how.
If you sell online you probably use USD as the main currency on your store and hence your PayPal balance will be in USD. What happens is that since your local credit card or bank account are not in USD, an automatic currency conversion takes place on PayPal’s end as the money is on the way out. The conversion rates are bad, to put it mildly. Hence you’re going to lose a lot of money on that conversion.
Withdrawing your funds from PayPal to a debit or credit card can be annoying if you have significant funds. The reason is that you can only withdraw up to $2,500 at one go, and every time you make a withdrawal you are charged $2,50.
So let’s say you need to withdraw $50,000. You will need to go through the withdrawal process 20 times for a total cost of $60. This sounds ridiculous; a time-wasting activity and also a money-grab by PayPal. It is, there’s no other way of looking at it.
The other way of withdrawing is to send the funds directly to your bank account. There are no limits when compared to withdrawing to a card. Sounds like we solved our problem right?
Well, not so fast.
If your bank account is in a different currency than the funds you have stored on PayPal, be prepared to lose a significant amount of money due to PayPal’s horrible exchange rates. PayPal does not let you send, say, USD directly to a EUR-denominated account. This is a limitation on their end, and I suspect an intentional one to fleece their users. There are no such limitations when using other payment gateways such as 2Checkout.
- How to Time PayPal Withdrawals to Get the Best Currency Exchange Rate
- 🧐 Are You Losing out from PayPal’s Exchange Rates?
- 🤔 Which PayPal Account is Best for You?
- 💸 Changing Your PayPal Withdrawal Currency
- Accepting Credit Card Payments via Braintree in Europe
- Braintree vs PayPal Fees, Which One is Cheaper?
- 💸 Understanding PayPal Cross Border Fees
- PayPal Now Allows Withdrawing Money to Bank Accounts in Malta
- 💳 Withdrawing Money From PayPal for Non-US Accounts
- Which PayPal E-Commerce Checkout Service Should You Use?
- 🤔 Should You Open Separate PayPal Accounts for Each of Your E-Commerce Stores?
- 🆚 PayPal VS Wise Borderless
- 💳 Linking Virtual Bank Accounts and Cards to PayPal (Revolut, Wise etc)
- How to Check the Instant Payment Notification (IPN) History in PayPal
- PayPal Stiffs Sellers With Changes in Refund Policy
- How to Change Ownership of a PayPal Account
- How to Buy Bitcoin and Crypto With PayPal