I use my credit card in paypal to pay for various car parts in the US and Japan. It always involes paying in US dollars. Now when I use canoe to convert currency, but paypays conversions is a lot higher favoring them.
I remember reading about something about paypal getting in trouble for over charging for conversion but I don't remember the full story.
This is the currency converter I use;
http://www.canoe.ca/cgi-bin/calculators/currency/ccalc
Here is my latest purchace; this item is 205.00 US in the converter it is 264.08 CAD, but Paypal says 280.00 CAD. That sucks. I dont see why my credit card cant do the conversion, why does paypal insist on the coversion? I checked with the cred card company and it was also cheap than paypal.
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This is from paypal FAQ:
Why is the foreign exchange rate different from what I see in the newspaper?
The foreign exchange rates quoted in the newspaper or online news sources are almost always the inter-bank rates that are available only to the largest international banks purchasing currencies in quantities of $1,000,000.00 USD or more. A more applicable comparison for consumers is the exchange rates quoted at airports or other consumer currency exchange shops.
The 2.5% spread that PayPal charges is competitive with most multi-currency credit card transactions, in which Visa or MasterCard charge a 1% spread above their wholesale exchange rate, and the card-issuing bank typically charges an additional spread of 1-3%. Visa and MasterCard benefit from a lower wholesale rate than PayPal, but PayPal seeks to keep its foreign exchange rates competitive with credit card transactions and other online payment service providers such as Western Union. Because PayPal does not charge a high fixed fee for sending international payments, the total cost of sending an international payment through PayPal is still lower than for many international multi-currency bank transfers.