CANADIAN DOLLAR TAKES THE PLUNGE - TIME TO MOVE THAT PAYPAL MONEY!

[craftycatsattic]

Is it just me or is anyone else excited about this?

I just moved my US paypal money at an exchange of over 15%. If memory recalls, the looney hasn't been this low since February 2007.

Woohoo!

[cartoonsinabox]

Its good but the sales aren't rolling in like before.

[funkywatch]

Are you seriously using Paypal to convert your money? Their rates are a complete rip-off!!!

You can save thousands of dollars by opening an account in the US (I did it at my local RBC branch) and transfering money to your canadian bank account using Custom House's online service (xetrade.com) via EFT. Transfers usually take 2 or 3 business days (same as having PP deposit in your account.) You will save on the FX rates plus the PP withdrawal fee every time you wish to take money out (PP does not charge when withdrawing to accounts in the US)

[coxengines]

Is it just me or is anyone else excited about this?

YUP!

On top of that, sales have been climbing every week. I am up almost 40% from 3 months ago and almost 20% from last month.

I buy all my product in US$ and sell it in US$, meaning my profit increases proportionally with the exchange rate.

Another bonus: I get paid shipping costs in US$ and pay in CA$:-)

Xena

[pierrelebel]

"You can save thousands of dollars by opening an account in the US "

????

Let's keep it in perspective.

I have a US$ account at a bank located in the USA since 2001. Yes, the conversion rate I get from my bank is better than the regular PayPal conversion rate by about seven tenth of one percent (on average over the years).

If you transfer US$100,000 you will save about $700, based on PayPal regular conversion rate.

You really need a huge volume to save "thousands of dollars".

It should be noted that the PayPal spread for large users is now competitive with Canadian banks as announced by PayPal on August 20th for sellers doing more than $3,000 a month ("PayPal wants to be as competitive as possible and so that’s the reason why we were able to lower our foreign exchange conversion rate to 1.5% or 1% for merchants and sellers receiving more than $3000 in payments per month"). .

[coxengines]

Good point, Pierre, and thanks for pointing it out again.

I should do 100-120k/year and $700/year is not worth the hassle to maintain a US bank account. That aside, I'm sure those accounts are not free either, further marginalizing any potential savings.

Xena

[pierrelebel]

"I'm sure those accounts are not free either"

Actually, my account at TD Banknorth cost me ZERO (other than cheque printimng every few years).

Based on the recent changes in PayPal policy for large sellers (over $3,000 monthly), you will not lose any conversiuon rate when compared to Canadian banks.

The advantages of having a US$ account, in addition to saving on exchange converstion rate, is to use US$ to pay for purchases (if applicable) and pay eBay fees is US$ (again saving the conversion). .

[coxengines]

Makes sense, Pierre.

However, my eBay fees are billed in US$ and I pay them from my US$ PP balance.

Some of my stock purchases are also from my US$ PP balance, others are paid from my Canadian based US$ account by cheque.

Meaning I can't really see the difference between maintaining a US$ account in the USA versus one in Canada.

Or am I missing something here?

Xena

[pierrelebel]

" I pay them from my US$ PP balance"

I pay the with my US dollar denominated MasterCard. I get 30 more days to pay (interet free) and get AirMiles on my eBay fees (at over $10,000 a year it does add up!).

"Some of my stock purchases are also from my US$ PP balance"

If your suppliers accept PayPal that's fine. Most of mine do not. They want to be paid by US$ check or credit card.

"I can't really see the difference between maintaining a US$ account in the USA versus one in Canada"

The only major difference is that PayPal cannot transfer US$ to your US dollar denominated account held at a Canadian bank. .

[funkywatch]

XE rates are lower than Canadian banks. Just checked to compare. With RBC the instant rate is 1.1327 and I am getting 1.1411 from XE. You can add $850 to your $700 savings.

Another advantage is that you can bid on a lower rate and your transaction kicks in when the rate goes down. You can also buy forward contracts to lock-up a rate up to a year. Try that at the bank...

Besides, who wants to give more money to Paypal?

[coxengines]

The only major difference is that PayPal cannot transfer US$ to your US dollar denominated account held at a Canadian bank.

Got it! That would a reason as, presently, I convert most my revenues to CAD and then some back to USD later, for my non PP payments.

Thanks Pierre!

Xena

[pierrelebel]

funkywatch -

What is the current spread to buy/sell US$1000 at xe.com ? .

[recped]

I'm not sure what their current spread is but they do guarantee the lowest spread available for transaction under a certain amount (I think it's $1 Million.

I set up my account with them a few years ago, I checked at that time and certainly they offered the very best conversions at that time. If I recall correctly if was about 75 basis points from the standard mid-market rate. The good and potentially bad part of XE is that you trade using "live" rates (updated every 60 seconds), most banks use a daily rate for smaller transaction or an hourly rate for larger transactions. During "normal" times these make little difference but with the highly volatile conditions we have at the moment you can come out ahead (or behind) using either method. (on Friday there was a swing of more than 5% in only 4 hours).