Paypal

[Starscream212]

Hello, i just a question about paypal.
With the Australian dollar being at around 90US cents, ive decided to buy a few figures from ebay.
But when i complete the transaction paypal has the currecny rate at 88US cents.

I realise its only two cents which is no big deal, but just out of curiosity why does paypal always have the currency conversion a few cents lower? is that how they make money?

Thanks

[liegeprime]

yep , you nailed it, they charge their service fee that way.

[jgon2098]

I think its 2.5%, also I'm not aware of any financial institutions that does currency exchange for free, 2.5% is not great but still better than your airport ones...

[griffin]

As the others have suggested - the posted exchange rate that you see on TV and in the paper, is just the mid-rate. In other words, if you were buying US$ with AU$, or AU$ with US$, your rate of exchange will be a couple percent on either side (to cover profit of the exchange service... or if they charge an actual fee, it covers them if they need to convert their own currency stockpile before the rate changes too much against them).

So it might say US90c, but to buy US currency it you will only get about US88-87c.
And in reverse, it would take about US92-93c to get back an AU$1.

[Starscream212]

Thanks for the explination guys!