Paying via $US from PP vs VISA for an Item Sold in British Pounds

[sylviebee]

Whenever the following occurs I'm unsure about how to pay so that outcome is in my best interest.

I won another item listed in British Pounds and I'm unsure if  I should pay via $US from my PP account or via VISA.

My $US PP money eventually gets transferred to my Canadian bank account at which time the rate of exchange matters, or I can pay via VISA now and pay fees right away.

Does anyone here know which method would be my better option?

[marnotom!]

Wow. Tough call.

If you’re getting your US dollars exchanged into Canadian dollars at close to market rates, I’d say pay with your PayPal account.

Your VISA account may be different, but my experiences with credit card exchange rates is that they’re far worse than anything PayPal offers.

[a52split]

Sorry marnotom, but you're wrong.  There's nowhere on the planet that charges a higher commission than PP.  I just checked last week, they were taking 5.3%!  My bank charges 2.25% and my CC charges 2.5%.  The street vendor near my office charges just over 1%.

To the OP, you should call Visa and ask them what they charge. 

You should also look at withdrawing $USD from your PP acct so you can convert it locally at a better rate like I do.  

If you bank with RBC, they have US bank accts that allow you to transfer $USD into them. Otherwise you can open a bank acct at a US bank. Note, having a $USD acct at many of the other Canadian banks is not the same as the RBC acct.  They are Canadian accts in $USD, you need a US acct.

[ypdc_dennis]

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@a52split wrote:

Sorry marnotom, but you're wrong.  There's nowhere on the planet that charges a higher commission than PP.  I just checked last week, they were taking 5.3%!  My bank charges 2.25% and my CC charges 2.5%.  The street vendor near my office charges just over 1%.

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PayPal does not charge 5.3%

One of the problems with PayPal is they fix the exchange rate once or twice a day and then apply their percentage to that. Unlike the banks which keep an eye on live rates and are more active at updating. So if the US$ is rising or falling the PayPal exchange cost can quickly get out of line.

My credit card charges 2.5% but on the rate when the purchase is posted to the card rather than at time of actual purchase, so can be lower or higher than expected when currency is volatile.

$100 US buys (a snapshot when the US$ was rising this week) Canadian:

Base rate (XE): $132.80
Ottawa Currency Exchange (debit or cash only): $131.22
TD (non-cash): $129.62
Scotiabank (non-cash): $129.57
BMO  (non-cash): $129.26

PayPal (between balances): $128.68  (3.1% effective rate).

PayPal's exchange between balances get a better rate than if you wait and do the conversion at the time of purchase (I believe the difference is 0.5%),

If you do a lot of currency exchanging hunting out alternative methods to PayPal is worth your time. There is a reason PayPal is so profitable as a company.

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[sylviebee]

I ended up doing a comparison between VISA and PP by starting the process without actual finishing.  The difference between the two was pennies:  Not worth the time it takes to do the comparison unless the amount being spent in the tens of thousands.