eBay

gloriaguides · ‎10-11-2003

Paypal, an ebay company, "converts" my US$ for me before depositing it in my bank account. Problem is, they use an exchange rate about 3 cents lower on the dollar than the current ebay.ca rate. So, I lose 3% automatically (on top of all those other fees I pay them, including the stupid 50 cents transfer fee). Anyone know anyway to avoid this? Do I need to open a US$ account at the bank and have the Paypal money transferred to it?? What do you do? Hoping for some practical business ideas, GLoria

x-modz · ‎10-11-2003

When I was moving tens of thousands of dollars a month through PayPal a few years back, the exchange was even *worse* then this at that point.

I took it up with PayPal, and they basically said "Oh Well, thats our posted rates".

So, I opened an account at the US Division of TD Canada Trust - TD Waterhouse.

I did all of my PayPal withdraws to the USD account, and then called TD Canada Trust to do a cross-border transfer of funds from the USD account, the CDN account.

The exchange rate was *much* better.

Another alternative is to get a PayPal debit card. Use it like your regular ATM card at any Canadian bank machine to get CDN cash from your USD PayPal account. The exchange is just about bang-on with posted exchange rates from previous experiences, as a direct result of what I beleive to be credit-card regulations that ensure such.. (The PayPal card works like a Mastercard). The $1 USD fee is easilly absorbed for larger transactions, as the difference in exchange can quickly counteract this.

Best of luck.

muminlaw · ‎10-11-2003

Someone was telling me recently that PayPal can now deposit US dollars into a US dollar account in a Canadian bank. Anyone heard if that's true? If so, I'll rethink my position on accepting PayPal.

We have an account with the Bank of America that we could have PayPal deposited into, but the bank informed us that we would then get into annual detailed explanations to the IRS about doing business in the US (rather than WITH the US) and facing possible income taxes there. Also, with the new bill re remote sales tax collection that they're talking about on the .com PS board, that could prove to be a factor as well for anyone with a US based bank account.

Glenda

Glenda

x-modz · ‎10-12-2003

I looked into this a few years back, and it was a no-go.. I wanted to open a USD account with the Canadian side of TD Canada Trust, as opposed to opening a USD account with the American Side (TD Waterhouse)..

Anyhow, PayPal said that as soon as it crossed the border (regardless of the fact that the Canadian account was in USD) that it would be converted to CDN funds...at that point, incurring the severe conversion penalties.

Then of course, TD Canada Trust informed me that being a USD account, receiving a CDN funds transfer, the funds would be converted *back* into USD once deposited...which would have led to even MORE loss in conversion.

It was a really screwed up system, all thanks to PayPal's insistance on the funds conversion before crossing the border. If they would just do a plain-jane USD transfer across the border, instead of doing that infuriating (And absurdly low exchange rate) conversion before hand, all of us Canadian sellers would be much better off in the long run.

Like I said, a *real* USD account (Which must be based in the USA) did help, however.

muminlaw · ‎10-12-2003

To be fair, the double conversion at the border is not PayPal's idea. They sent me a 2-page letter some years ago detailing the International banking law, which is what determines their inability to deposit USD into a Cdn based USD account.

I guess I'd better drop them a note again in case the law has changed. I just wish I could remember which friend told me that they are having PayPal deposited into their Cdn-based USD account. I also should have checked to be sure that he knew whether it was being double-converted in the process!

"Like I said, a *real* USD account (Which must be based in the USA) did help, however." Does that not get you into explanations to the IRS? My US based bank insists that all non-US residents with an account in their bank, must complete an annual questionaire from the IRS. If that extends to remote sales tax collection (the bill being debated right now), one could conceivably be required to complete 50 sales tax questionaires! What a nightmare that would be!!!

Glenda

Glenda

kpamber · ‎10-13-2003

I believe that the TD bank is now affiliated with Wells-Fargo, not Price Waterhouse.
You can open an American funds account with the td...can you not just transfer to there from paypal?
I use my debit card as well, $400 C per day is the max withdrawal, but it is great!
Karen

gloriaguides · ‎10-13-2003

Gees, I wouldn't want to have to get involved with the IRS! I still have a US Social Security card etc because I grew up down there. I did read somewhere else about point spreads, etc. that made me feel a bit better about it all. I also just converted to a Merchant's account so at least I'm paying lower fees at paypal (If you average $1000 US or more a month, you can get a lower-fees Merchant account with Paypal). haven't tried the debit card thing. Does it say Paypal on it? Thanks for all your responses, I meant to get back here sooner but it's been a great (and therefore busy) weekend at ebay. Glori

dan.j.m · ‎10-13-2003

As for dealing with the IRS, since you aren't conducting business in the USA, all you have to do is file a W8-BEN form, which just basically says that you're a non-resident, non-citizen and not conducting business there.

The US bank may withhold 30% of your interest (not your money) but I doubt its much money anyway.

In fact, the W8-BEN may just be for getting back that 30%.

Just call the bank where you have your account. If they let you open up an account without showing a Green Card or SSN, they should have someone knowledgeable on matters such as this.

coumel · ‎10-14-2003

My paypal is still in US funds, i own the debit card and usually try to wait and see the best time to withdraw it depending on the exchange rate, which brings me to my next question:
Do you take the Gain/Loss money from the exchange rate into account when you are doing your accounting? I'm asking since i usually always trade in US funds, i imagine it is the same with most Canadian PowerSellers and we must all be losing money right now with the US dollar's decreased value. I'm sure you have all experienced losing some money with the exchange rate just from the time an auction ends to the time you actually get paid for it?
Anyway, i was just curious, i elected not to take it into account for the simple reason it's already anough of a pain crunching numbers as it is, it would just be too darn complicated taking into account a rate that changes on a daily basis.
Let me know what you guys do, thanks!

allstarsalez · ‎10-20-2003

lucky for us i live 30 minutes away from driving across the US border. we r from Vancouver, bc.

what we did is opened corporate bank account in blane little town right after the border and now we transferring all cash from paypal to the US account which saves us TONS of money.

paypal fees & XCHANGE rates are just WAY TOO ridiculous.

open an US account but be careful as paypal can get pissed off at you and limit your account which was the case with us when we tried to transfer money to US account.

john

sageleafkids · ‎05-11-2008

This is a debate that has been going on forever. No matter the financial institution you deal with (PayPal, big bank, etc.,) there is going to be a difference in what you are offered for an exchange and what the "posted" rate is. I have found that typically the big banks offer a rate that is about .5% better than what PayPal offers. This is just due to the volume that the big banks deal in compared to what PayPal deals in.

We opened up an RBC Centura account. You need to file forms with the IRS, (your bank helps you with this), but as mentioned earlier, you are not American, and you are doing business in the U.S., so you aren't giving any money to the IRS.

We opened up the US account in order to make our $US purchases. With a $US credit card, you keep you money in the same currency. You are saving between 4-5% of your money by doing this.

For example, let's say that for the purpose of this scenario, the Canadian dollar is on par to the US dollar. You make a sale and take a $100 payment in US dollars.

If you were to take that $100 in US dollars and make a stock purchase of $100 in US dollars, you don't lose any money, so the $100 you collect gives you $100 to purchase.

Now take that same $100 in US currency that is in your PayPal account. You convert that to Canadian dollars and deposit it to your Canadian bank account. You now have about $97.50 Canadian.

Now you take your Canadian dollar credit card and make a $100 purchase in US dollars. Your credit card company will charge you about 2%, which means that your $100 US purchase will cost you about $102. You only have $97.50 in your account, so this transaction cost you about $4.

Bottom line is whenever possible, avoid currency exchange, it doesn't matter who is doing it for you, it is going to cost you money.

If you are collecting revenue and $US and making purchases, or incurring expenses in $US dollars, then avoid the exchange whenever possible and open up an account in the US. Most big banks in Canada have subsidiaries in the US, so it is easy to do.

Just my thoughts.

Peter

ds2286 · ‎05-11-2008

Paypal does not issue the debit card to Canadians anymore. I have tried to get one several times with no luck.

You could get one a few years back, but not anymore.