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How does PayPal work on Euro apartment deposits?

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I've only used PayPal once, for buying something on Ebay. But I'm seeing it mentioned more and more by European apartment owners as a way of making a deposit in Euro. Does it work like you normal credit card charge would in Europe? In other words, if your card charges a Visa 1% either with or without an extra percent, is that all you'll be charged by PalPal? Or do they set their own exchange rate?

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