How to avoid PayPal's currency conversion fees and rates?

Adam Rozsa

Sending money with PayPal can involve different kinds of fees, such as currency markup ranging between 3 and 4 percent, depending on the kind of the transfer¹.

You might be wondering, how to avoid these currency conversion fees and rates? This article will help you – we’ll show these fees, how PayPal calculates them – and how to avoid them.

For example, it may be a good idea to try out other international transfer services, like Wise. With Wise, you can send money all over the world for low fees³ and the mid-market exchange rate. It’s easy, fast and secure – open an account for free today!

Wise sign up

📝 To give you a little heads up, in this guide you’ll find:

Where can I find the PayPal exchange rate?

This article uses information taken from the terms and conditions, and fee structures, applied to holders of US-based PayPal accounts¹.

Although the way PayPal works is fairly uniform across different markets, if you have a PayPal account from elsewhere, it’s worth checking the small print on your particular account.

You may have been wondering – does PayPal convert currency? The answer is yes: whenever you are paying for a foreign product or service, or sending money to friends and family located in a different country, PayPal automatically converts your currency to the local currency – there is no other way if you want to use PayPal.

However, there is an alternative solution – find out more in the next session.

But first, we're going to show you how you can check PayPal's exchange rates. First, you’ll have to log into your account. You can then take the following steps²:

  • Click on the 'Details' button, which is displayed on the left of the screen near the account balance information.
  • This will bring up a summary of your account balance. Click on ‘Manage currencies’.
  • Here you can input the sort of transfer you want to do, and the currency you want to convert from, and to.
  • The currency exchange calculator will then display the currency rate that’ll be applied.
  • If you click to 'Continue' and 'Confirm', the transfer will be processed.

When the currency calculation is displayed, you can check if the exchange rate used is fair by comparing it to the mid-market rate, sometimes called wholesale, spot, or interbank rate.

💡 Try out our PayPal currency conversion calculator today and see how much the recipient will receive if you send them money via PayPal!

paypal currency conversion rates

This is how to avoid PayPal's currency conversion fees

Banks and money transfer providers often give you a bad exchange rate to make extra profits. You might ask the question – how to avoid these fees?

Open a Wise account for free, and you don’t have to pay a currency conversion spread or other hidden fees when sending money. You only pay a small and transparent fee³. As a result, you may save a lot of money.

You might have been wondering, how do we do this?

Wise is different. Its smart new technology skips hefty international transfer fees by connecting local bank accounts all around the world.

See it yourself, how much you can save with free Wise in comparison vs. PayPal:

The true cost of sending USD to GBP

Open your account for free today

💡 Oh, and while you’re at it, check out the Wise account. Where you can manage and send dozens of currencies, all from the same account. With no monthly fees. You can also get the Wise debit card, which you can use to pay for goods and services all over the world.

How does PayPal calculate their exchange rates?

If PayPal converts your funds, they note that there’s a markup applied to the wholesale exchange rate - that’s the rate that they get from a third party when they convert currencies.

This markup means that the recipient receives less than you might expect if you’ve been looking at the mid-market rate. (See the previous section for more about what that means.)

Here’s a table summarizing PayPal’s currency conversion spread, depending on the type of the transaction:

Type of transactionPaypal’s currency conversion spread
  • Purchasing goods or services from a seller, paying in a currency which you do not hold in your PayPal account.
  • Sending money to a friend or family member in a currency that you do not hold at the time of the transaction.
  • Sending money using PayPal’s Payouts in a currency that you do not hold on your PayPal account.
4% (or such other amount - may be revealed during the transaction itself)¹
  • Receiving money either from a buyer or from a friend or family member in a currency that your PayPal account is not configured to accept.
  • Converting your PayPal balance from one currency to another, not in connection with any transaction.
  • Withdrawing funds from your PayPal balance held in a currency other than US dollars to the bank account linked to your PayPal account.
  • If you sold something and the transaction must be refunded or reversed, and you do not have the correct currency available in your PayPal balance at the time of the refund or reversal.
3% (or such other amount - may be revealed during the transaction itself)¹
💡 If you’re selling goods, you might want to find out more about PayPal’s merchant fees. We’ve made a calculator for that!

The difference between PayPal's payment and balance transfer

It’s also helpful to know that you have a couple of different conversion options, when it comes to exchanging your currency with PayPal. Different charges and conversion fees are applied for each option – payment transfers and balance transfers.

PayPal payment transfers

A payment transfer is where you simply use PayPal as a means of transferring the payment, so the cash passes directly through your PayPal account without actually being held there. You don’t end up with any balance left in your account as a result of the payment being made.

PayPal balance transfers

A balance transfer is where you convert cash, which is already held in your PayPal account, to a different currency within your account. You might have a PayPal balance because people have transferred cash to you, and it’s still held in your PayPal account, or because you’ve made a transfer into the PayPal account from your linked bank account.

It’s useful to know that PayPal uses a different exchange rate for balance transfers and for payments. If you convert money as a balance transfer within your PayPal account, you can get a better exchange rate, because the markup added by PayPal is smaller.

paypal currency conversion rates

Other PayPal fees

There are a few other costs involved in making an international payment with PayPal. The fees PayPal charges depend on how you fund the transfer.

When making a personal transfer, PayPal differentiates between three types regarding how you can fund your international transfer. This can be either paying with your PayPal account or using a bank transfer, paying by card or using an Amex Send account.

Keep in mind, that these fees are added on the top of domestic transfer fees and currency conversion markups. To summarize, here are PayPal’s international transaction fees:

Method of paymentPayPal fee
Cards5% (minimum: $0.99, maximum: $4.99)¹
Your PayPal or bank account5% (minimum: $0.99, maximum: $4.99)¹
Amex Send account5% (minimum: $0.99, maximum: $4.99)¹
💡 If you’re using PayPal for business or creating an invoice, there’s even more you need to take into account – check out the links to find out more.
📖 Want to learn more about PayPal's international fees? Read more about:

PayPal’s exchange rates vs credit cards

If you have a choice of completing your transaction using either PayPal, or a credit card, then it’s important to know the exchange rates offered. That way you can choose the one which represents the best value for you.

As exchange rates change all the time, you’ll have to get the most up-to-date exchange rate for the currency you want to convert, and for your specific card. Find them here:

Don’t forget that many credit and debit cards charge a fixed fee for spending or using an ATM overseas. The calculators above let you input this percentage fee, so you get a true figure of the costs of your transaction.

Once you have the current currency conversion rate for your credit or debit card, you’ll need to log into your PayPal account to check the exchange rate being used there.

Bottom line

The good thing is that you have several options to avoid these fees. You can always check out other money transfer providers like Wise to get possibly better deal when making an international transfer.

Just make sure, when you’re comparing the fees and total costs, to check that the exchange rate you’re offered is fair.

Learn more about Wise

💡 Did you know that Wise also offers a business account?

Some key features of Wise Business include:
  • Better visibility and organization of business finances. This is helpful for account reconciliations and audits.
  • Major local account details for a simple one-off fee to receive international payments with ease
  • No monthly account fees or minimum balance requirements
  • Receive payments from e-commerce platforms such as Amazon or via Stripe
  • Create invoices using the free Wise invoice generator or invoice templates
  • Accounting integrations, including a QuickBooks Bill Pay connection
  • Batch payment options. Fast payment of up to 1,000 people

Discover the difference between
Wise Business vs Personal

  1. PayPal - Consumer Fees
  2. PayPal - Where can I find PayPal's currency exchange rates
  3. Please see Terms of Use for your region or visit Wise Fees & Pricing: Only Pay for What You Use for the most up to date pricing and fee information.

All sources checked on 10 August 2022

*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.

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