fishee

I know about the whole 1% and 3% CC conversion fee discourse and how Capital One ostensibly eats the Visa 1 %, etc. but does anyone know how paypal works? I just paid my apt deposit and the conversion sucks. 260 Euro converted to 317.96 USD according to paypal although XE states that it should be $310.05. So paypal sets its own conversion rate and skims off the top? This is regardless of my method of payment since I actually paid directly from my bank account with an e-check. Does this mean I cover the costs of conversion for the receiving landlord? What does paypal charge them for receiving money? I know they usually get charged a 3% fee for CC payments but I used an e-check so I assume they won't have to pay those fees.

StLSusan

2 years ago I paid for an apartment in Paris with Paypal. I do not reemember what the exchange rate was but I do remember that I had to pay landlord an extra 16 euros when we got to apartment(we had been advised so I was ready for this...).
This was to cover the penalty they paid for me to use Paypal.
Still worth it, BTW as it was instantly transferred and I did not have to deal with a bank international transaction.

Robert2533

PayPal is a service, not a bank, so they charged you a typical transaction fee, in this case, 3%. The exchange rates quoted on XE are for large dollar exchanges, not for smaller transactions.

It would have been simpler to pay with a credit card than to use PayPal, but most small operations, like the people you are dealing with, are not the same as major hotels, who usually do not charge you a credit card transaction fee to book a hotel room. Most small operators do not include this transaction fee in their posted rates. You were also charged a transaction fee by you bank for them to issue the e-check. In the future you should stick with the credit card.

fishee

So you're saying if I used a CC to make a paypal payment it's cheaper than to just paypal directly from my bank account? I use paypal for ebay all time and pay directly out of my checking account so I guess this fee is only for international purchases? Were they also charged a transaction fee on their end? Merchants generally pay a 2% fee to VISA/MC -- but since I didn't pay with CC they weren't charged anything were they? Does anyone who actually accepts PayPal payments abroad know these details? thanks

grantop

I sell on eBay and use PayPal to both send and receive funds. Be careful if paying by credit card via PayPal in the future, the fees are higher for the person receiving the money and some do not accept a PayPal payment drawn on your credit card. Ask first. There was nothing wrong with paying by e-check.

I wouldn't stew over $7.91, in the grand scheme of things it's not a big deal and most likely won't kill your vacation. Sure if you made a ton of these transactions you might want to think about alternatives, but this isn't a big deal. I'm not trying to be a smarty, just saying that I don't think you were raked over the coals. It is as Robert said it is a service, not a bank. 3% isn't a ton to pay for the convenience of paying your landlord who might not be able to take a credit card over the phone. You didn't have to wire money, etc.

Anyway, don't worry about it and look forward to your trip!

fishee

thanks for the info. I have to send her more money in around 4 weeks as this was just a holding deposit. Do you think she'd accept a check from an American bank (since there's plenty of time for her to see the check clears) or will I have to paypal again?

grantop

I think you should ask her how she would like the balance to be paid.

Christina

If I were in Europe, I would not accept a personal check simply because it could take a very long time for that to clear. But your landlord may feel differently. However, you don't have to do that, especially if you are trying to convince them to do it. YOu can easily get a cashier's check made out at your bank and send that by Global Priority Express US mail, which only takes about 5-7 days. A cashier's check should be more acceptable to them than a personal check, as it means you already paid for it (in actuality, I think you can cancel payment on a cashier's check, but there isn't the problem that you didn't have funds for it). I've paid European landlords with cashier's checks that way. YOu just have to get one that understands this system, and is willing to accept a reasonable conversion rate on the dollar to euro fee. The one I had was really great and set it at the interbank rate and sent me an email telling me exactly the USD amount to make it out. I then checked the current conversion rate online to see what it was, and found out there was virtually no markup at all.