XE vs. eBay vs. PayPal Conversion Rates

[STL]

I think this is a great and very useful thread.

I've switched between using my own cc's conversion and Paypal's conversion at times b/c at times you'll find there's actually a lag in Paypal's rates which can be to your benefit on days when the exchange rates are depreciating.

On days where there's high upside, I often opt for my cc's conversion. Most times I've gotten it right though I generally avoid weekend transactions b/c the lag before it shows on your cc statement is longer (sometimes you have to wait to Tues/Wed before it appears if you pay on Friday). I try to make payments at the top of the week for that reason.

I also use:
http://markets.theage.com.au/apps/mkt/forex.ac

as my source for rates. It's fairly accurate if you take the average of the two buy and sell rates.

[i_amtrunks]

Very helpful Jay, and interesting to boot.

Will keep all this info in mind for future reference.

[Defcon]

Yes thanks for this info it should be useful to many. I have been aware of this recently. The exchange rates will differ between these institutions and will always lag behind the actual and sometimes will be well under. I don't expect them to be in line with the actual but it is infuriating when they are well below.This will really make a difference on large purchases.

[STL]

Good example tonight. I just made payment for some Botcon 2006 items at $636 USD for a large lot.

The current spot rate via the Age website was 0.7551 without the 2.5%, so if you factor it in it the exchange rate is approx 0.7301. Paypal's effective exchange rate after 2.5% was 0.7497. I used the lag in rates and pocketed myself the difference between

$636/0.7497 = $848.34
$636/0.7301 = $871.11

which comes to $22.77. I basically saved myself a deluxe by using Paypal's conversion rather than the interbank. The good thing about Paypal's convertor is you get the exact amount taken from your account straight away and you know what it is as discussed above.

Given that where I work our short-term forecast for the AUD is downwards and in light of current day-to-day trading in the US, the Dow Jones and Nasdaq down by 2.4% and other markets doing about the same, I went with the Paypal conversion. There's no way the AUD will push back above 77 US cents in the next two days so the lagged Paypal conversion worked out in my favour.

[canofwhoopass_87]

Good to see we have our own little group of financial / economic advisors on the board.

I've been thinking about this for awhile now - I tend to use the google and xe sites just bc I hate the damn load time on paypals "send money" conversion page.

But anyhow, thanks for the info. Very helpful stuff you guys !

[Also] Great to see the AUD regaining strength

[TheDirtyDigger]

So in practical terms how can I use this?

Point in question; I have three overseas ebay auctions I have to pay for at the moment. How do I (or even can I) exercise my right as to which conversion method I use to pay for these through ebay?

[jaydisc]

If you have a credit card attached to your PayPal account, you can use that as a funding source instead of a pre-existing balance or bank account. I believe the link is labeled as "More Funding Options". If it's a foreign currency, you also will then see PayPal's EXACT AUD amount they'll charge you. You can alternatively choose to have eBay pull from the credit card in the sold currency, and then your bank will likely give you a different rate. I believe the link is labeled as "Other Conversion Options".

It's best to KNOW your credit card's foreign currency markup as if it's less than PayPal's 2.5%, you'll tend to do better using the card's conversion, but when you use your credit card, you usually get the currency rate of two days in the future, so try to be aware of trends as best as you can be.