Robespierre

Duh.

Like my Smith Barney card, xe buys and sells currency at market rates and profits from the spread. To me, it looks like I'm getting the "mid-market" rate, which is the best I can hope for on a $10,000 transaction.

clevelandbrown

PayPal sent me an email solicitation a few days ago. I deleted it, but from memory I think they said they charge you 2.5% above the wholesale rate (often called the interbank rate) charged them by their bank. They also emphasized that when you authorize the transaction, they will display the exchange rate prior to your final approval.

I suspect the high cost of a cancelled reservation might reflect the fees PayPal charges the receivor, which I wouldn't think the receivor would make good on, as that money is already gone.

One reality to consider in this matter is that landlords are often individuals who may only be familiar with one type of transaction, so you may be wasting your time trying to talk them into accepting another type.

I haven't yet used xe.com, but in investigating it I ran through their demo and their fee for a wire transfer was far lower than I have seen at banks.

Many of these companies make their money by dealing in volume, so what appears to us to be a minimal profit may be quite a bit of money. I'm also leery about trying to get my comparison's too precise. I'm pretty sure the "interbank rate" isn't an actual trade rate, but rather the average of the bid and asked prices, and the rates change constantly, so to be very accurate, one would have to know precisely when the conversion was made. I seem to recall reading the MC/VISA rates are based on a markup over the wholesale rate at closing the day before the conversion, so they have some flexibility to select the time and location of the actual trade, to maximize their return.

gambader

Hello,,, I posted a question about paypal fees on a different thread...and here I have another question along that vein:: I sent a deposit 2 weeks ago to the landlord of a VRBO apartment via Paypal. I didn't know about the 2.5% + on the exchange rate, but I probably would have done it this way regardless. HOWEVER now I just received notification of an 11.95Euro "paypal fee" from the landlord - for my 300Euro deposit!! That fee, in addition to the fee that my mastercard will surely tack on (3.5%, I've heard!) Plus the relatively poor exchange rate - really kills me.

From your experience, does the landlord pay the paypal fee (like paying a free for credit card) or does the renter?? I'm not sure whether I should fight this one.

ira

Hi gam,

>From your experience, does the landlord pay the paypal fee (like paying a free for credit card) or does the renter?? I'm not sure whether I should fight this one. <

You should have asked first and you wouldn't have been surprised when the fee showed up.

PayPal charges the recipient of the money.

Your landlord wants the full amount of the deposit.

You pay the PayPal fee.

12E is still less than a bank transfer fee.

gambader

Hi Ira,

Thanks -- the problem is that I didn't even realize that Paypal charged such a fee per transaction. I would venture to say that even those who know about the charge might assume that if it's not mentioned, it would be absorbed by the merchant, like the charge to them to have their customers use mastercard or visa. I remember that occasionally when traveling abroad (mostly Middle Eastern countries), merchants would tack on the credit card fee they needed to pay (at the time, 3%) - feeling that the customer should pay for the privilege of using the card. For competitive reasons, that practice has largely been abandoned. Since Paypal is relatively new, I guess some merchants still charge separately.

Of course, in reality, one way or another the customer will pay - but I would have preferred a higher price quoted than realizing afterward that I had a charge. I have an allergy to being nickel and dimed, even legitimately, especially when it's a surprise!!

ANYHOW>>>>the wonderful ending is that I wrote to Pascal with my concern, and he very graciously offered to absorb the cost. THAT is great customer service, I think!!

Thanks, Ira. You are a very helpful poster, by the way! Quite invaluable.

Robespierre

Does PayPal charge the sender or receiver? If I buy something on eBay and the price is stated as £100, PayPal will debit my account $190 and credit the seller's account £100 - I actually paid the markup.

gambader

When I buy stuff using paypal (ebay, amazon, other vendors) I've never had to pay a fee. So I guess in my case, the vendor has always paid the mark-up...unless I've missed something.

Robespierre

Go to your PayPal account. Look up the amount that came out of one account and the amount that went into the other, and run those amounts through xe.com's markup calculator:

http://www.xe.com/ccc/

geraldineb

I was renting from VRBO.com last summer in the USA. Most of the owners for that state posted that if one used the " Paypal" for payment one needed to add another 5% to the rental charge. ( Mind you there was no currency exchange involved.)

Two weeks ago there was a news show talking about " Paypal" and how it not always protect the renter.

I wished now I had paid more attention to what they were saying! Did anyone else hear this?

I decided to take the chance and pay by personal check to avoid the extra 5% charge.

adoptionisfab

A vendor can set up 2 kinds of Paypal accounts:
• One that only accepts checks for which there is no fee to the vendor.
• The other accepts credit cards for which there are fees, that I think are fairly high.

ira

Hi gambader,

>ANYHOW>>>>the wonderful ending is that I wrote to Pascal with my concern, and he very graciously offered to absorb the cost. THAT is great customer service, I think!!<

Good for you and good for Pascal.

Sher

Patrick. Also about a bank transfer something to consider.
I paid my bank fees to send three transfers to Portugal last year for three apartments.
For two of the rentals, I was credited the exact Euro they received from their bank. For one of the rentals, she insisted that her bank charged her another $17 fee and she passed that on to me. I wasn't going to argue for $17, but it seemed fishy to me.

I have a Paypal account and am interested in finding out your outcome. I will never wire from my bank again. It was too expensive, too cumbersome and too time consuming.

Lovejoy

I just payed for an apartment rental in London using PayPal.I used their eCheck option tied to my bank checking account.

The exchange rate was 2.5% over the wholesale rate,$1.8115 vs $1.7715.

Not a bad deal considering my bank wanted $35.00,and alot more hassle to do the same transaction.