If you have a PayPal account that you regularly use for collecting payments, and your main home currency is not US dollars, you would do well to read on.
Not too long ago, I had written about biding your time to get the best exchange rate possible when transferring your money from PayPal to your bank account. Soon after that, I discovered that there is another area of optimization which we should be aware of.
My home currency is the Euro, so my bank account uses Euro by default. Online I collect payments in USD since that’s the de facto currency on the web. That means that when it’s time to get the gold home I am subject to conversion rates when changing from USD to Euro. This is precisely where many people lose a good chunk of money, so you have to be careful.
Since your bank account is in Euro and your PayPal account is in USD, a conversion needs to take place. Now it’s a well-known fact that PayPal currency conversion rates aren’t the best; they incorporate quite a healthy profit for themselves here. So it might actually be better for you to let your bank handle the conversion at their exchange rates.
All you need to do is check out your bank’s exchange rates, make your calculations on how much Euro they would give you for a given amount of USD, then compare it to what PayPal would give you via their currency converter.
Beware also that some banks charge an extra fee for currency conversions. My bank charges around 1 Euro each time there is a conversion.
If you establish that it would indeed be beneficial for the bank to handle the conversion, you can change your PayPal account from being Euro-based to USD-based via this link.
On a related note, you can check the net amount you will receive from a PayPal money transfer via this PayPal fee calculator. Sadly, it appears that the calculator’s formulae are a bit out of date as the net amounts didn’t exactly correspond when I tested it on my account.
Note that if you have a Europe-based USD bank account, you will not be able to send USD directly from PayPal to that USD bank account. There will always need to be a conversion happening on the bank’s side, and the money will then go to your Euro account. You can try your luck with linking a multi-currency account like Wise Borderless to go around this issue, but it doesn’t always work.
As a test, I made a few transfers of $2,500 to my Euro-based bank account just to test the difference in money between using PayPal’s exchange rates and those of the bank.
Here are the results:
- $2,500 converted to Euro by PayPal: €2,171.92
- $2,500 converted to Euro by my bank: €2,216.06
More than €44 difference on each transaction!! That’s around 2% more added cost on each transaction. Keep in mind that PayPal is already charging you $2.50 per transaction as a fixed fee.
It definitely works better for me to use USD as my PayPal account currency, then withdraw directly in USD to my credit card. Note that changing your withdrawal currency has to be done manually by following my guide.
Buying Crypto with PayPal
Did you know you can now buy crypto with PayPal? That’s right, you can use Binance since it accepts PayPal deposits. Just hit the links below to get started.
You can also read my full review of Binance to learn more about this crypto exchange.
This withdrawal method is extremely popular at the moment, as people worldwide seek to get themselves some Bitcoin or Ethereum due to their extremely bright future price prospects.
Note: If you have any questions after reading this and the several other articles relating to PayPal on this site, please leave a comment or contact PayPal directly. Unfortunately, due to time constraints, I am unable to offer any advice over email so all emails related to PayPal will remain unanswered.
- 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
- How to Withdraw From PayPal into a Maltese Bank Account
- 💳 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 Change Ownership of a PayPal Account
- How to Buy Bitcoin and Crypto With PayPal
I read this: it might actually be better for you to let your bank handle the conversion at their exchange rates.
Can you suggest how do I withdraw the money from my PayPal account using my bank’s exchange rate?
Jean Galea says
As described in the post, you need to contact PayPal and ask them to disable automatic currency conversion.
As of recently, PayPal does not allow you to link “virtual bank accounts”, e.g. providers like TransferWire.
They basically force you to use their RIDICULOUS EXPENSIVE exchange-rates when transferring money between different currencies.
Regarding international payments and money-transfer in general, PayPal is a RIPOFF! I already lost around 100 EUR when exchanging USD to EUR.
Jean Galea says
I just had a refund with a currency exchange. The initial exchange rate was way different to the actual exchange rate and I lost 5%.
IHas anyone found a way to minimize PayPal withdrawing fees?2020
Ryan N says
I am in Australia. This does not work anymore.
I received payments in USD. Then link a USD Transferwise account. Then transfer out, Paypal charges 3% fee to withdraw USD to that Transferwise US account!!!
This is ridiculous! Bye bye Paypal. I am looking for some others to receive USD payments. Any suggestion?
Cha Thi says
I was doing the same up until now. When I try to withdraw USD in my Australian PayPal account, I also encountered this 3% charge today. I landed here while searching for solutions to this one. Anyone has any workaround please let us know. It will be a life saver 🙂 Thank you
If you want a good exchange rate from, for example, USD to euros, do the following:
– create an account on Etoro and deposit your USD here.
– after deposit you withdraw the money to your PayPal account in EURO, costs 5 dollars, however, with larger amounts, this is a considerable saving.
Etoro rate is 1.176
Paypal rate is 1.1342
refund costs Etoro are 5 dollars, but this is definitely worth it!
at USD 2500 quickly earned a dinner for two! 🙂
Cha Thi says
Hi, This is interesting. I tried to do this. I deposited USD in my Australian Paypal account to eToro account and tried to withdraw it to the same Paypal account (hoping to get AUD to my Paypal). But there is no place to select the currency to withdraw from. It only shows $ mark and I believe it is USD. Any suggestions on this. Thank you very much!
Australian dollars are not supported I think. USD/EURO/GBP are supported.
Jorge David says
I tried. Doesn’t work. Paypal allows u to change primary account to USD but then still forces u to convert to GBP when I tried to WD. What a waste of time.
Andrei F says
That’s exactly what they told me too.
to paypal ….your shop takes my money and receive less after order cancelled through ebay,it only $16.02nz ,but id save to buy a turbine ,but i guess paypal and ebay work together and im just a stepping stone,so if ive lost my money through this transaction then i will no be using palpay ever again as you riped my off safe money transfer maybe for the big stores using it and you get your commission and i loose not fare,
Hi to all, today I have situation, frined who live in Germany have paypal in euros in Germany, I live in Croatia and my bank card(Visa) wich is in euros is link to paypal and it is in euros, this is the story. Friend send me 77€ as “friends and familly option”to my paypal accout, somehow paypal converted that to 83.54$ and after that again converded to my paypal balance wich is in euros, but I got 70,31€. I can figure it out why, why is in dollars when I do not have any connection with dollars, why they change it from euros to dollars and back to euros, that is dont have any sense. How to remove dollars from this story, it is insane.
Saurabh pakhad says
Hi I am selling on eBay US from last 2 years.I wanted to know there are any other payment option other than PayPal on eBay.because when I am send money via PayPal exchange rate was 78.00 but at a time of withdrawal the exchange rate was 71.00. but at time current exchange rate was 75.00. Many complaint I am doing with PayPal. but they don’t get any response. so please how this problem can be solved
Bruno Leal says
By any chance do you know how to complain to the EU regulator against this PayPal practice?
Basically I got USD paid into my PayPal account and want to transfer to my USD Revolut bank account as I’m travelling soon to US and want to spend USD.
PayPal requires me to transfer the USD to EUR (paying their conversion rate, etc.) and then converting those EUR back to USD in Revolut.
How can this be even legal?
I have the exact same issue!
Have emailed Paypal a few days back but still waiting on an answer. This is simply outrageous.
I live f Malta wkoll 😀 Gozo actually and like you I am also an online entrepreneur, and I am losing a lot of money with the PayPal exchange rate
I just got my maltese bank account in USD, I called PayPal and they told me that they can change the currency on VISA Cards only, and they cannot change the currency of any bank account :/ unfortunately
Mela, I would like to ask you if you know some Maltese Bank able to issue VISA Cards in USD
None of them do unfortunately.
Paypall ripps you off especially with the conversion rate I lost about 3-7 % in each transaction. Bye bye Paypall
Hi Jean, I have set my paypal account to see it in Euros. I receive $ payments from a Chinese company. Should i convert to see my account in $ as i am getting ripped off.
i am getting ripped of at conversion from USD to EURO , then i am getting ripped off at Paypal fees,
total amount is 558.00 USD
PayPal Transaction Fee
GJ Gads says
Hi! I want to ask my client paid me in USD but it appeared in my local currency (PHP). Now I thought it was automatically converted, but days passed and the value of my funds went down. But the USD value shown below is still the same. Is it because of exchange rate? I thought it was automatically converted,
Alex Brian says
Thank you so much for writing this amazing article on PayPal Currency Exchange Rates. I just wanted to exchange $$$ into Pakistan’s PKR and your article did a lot help in this regard!
PayPal have a pretty crappy customer support team who don’t seem to be aware of the details of their TOS. I made numerous phone calls and they insisted there was no issue withdrawing US dollars to an EU based dollar account. After going to the trouble of setting up the account, I eventually discovered this isn’t possible without a double conversion fee. They don’t seem to be able to work out fees either.
They only allow withdrawals to a USD account based in the United States, if you’re an EU based business or individual.
I’m pretty sure your experience is specific to USD balances. If you have a EUR bank account and have non-EUR, non-USD income in your PayPal account, then you are screwed. Even if you have another bank account in another country which could accept the funds without converting, PayPal won’t let you.
Craig Boylstein says
Just purchased something in Austria from USA. Current USD to Euro rate is .85.
Paypal set it as .81.
Ended being apprx a 5% charge. What should have been a shade under $500 cost $524.67.
Yep that’s typical PayPal for you.
Just rang PayPal and they insist there’s no double currency conversion when withdrawing a dollar balance to a non-US based dollar account. However I have an issue at the moment with their system recognising an IBAN.
Konrad Hugentobler says
I had that same issues until I figured out that IBANs with spaces don’t save properly.
PayPal is strictly unbelievable, steal 4% from my transactions and another 4% for currency exchange, but can’t manage to program a trivial string parser…
I tried withdrawing to a CC but it still converts and it adds 1€, maybe because it was less than 100$. I did the thing in the settings but nothing. Anyway, i pay 1,7% when i buy something in usd or gbp so its not a great save. I get money from shutterstock turbosquid and the like, is there NO way around this robbery???
pamela pelser says
Hi is it possible to make a western union payment via paypal
I don’t believe so.