Adding a US based bank account to a Canadian Paypal account

[dutchman48]

Apparently, you can now add a US bank account, if it is on US soil, to your Canadian Paypal account and withdraw US dollars from your Canadian account to the bank in the US. Something new to help us canucks. I believe the funds in your account must be in US dollars, no conversions.

[pierrelebel]

It has been like that for eleven years.

[dutchman48]

Not according to Paypal and the option was never there for me before so not sure what is going on

[pierrelebel]

The option was there in November 2002 when PayPal first became available to Canadians

I know since I have used TD Bank (USA) (formerly TD-Waterhouse Bank) since 2002.  Many other Canadian sellers have used TD-Waterhouse and Centura (a subsidiaty of RBC) both located in the USA.

[pierrelebel]

I should have checked my records first!

Small correction.  PayPal was first made available to Canadian sellers on November 1st, 2000 - two years before its acquisition by eBay in 2002. The eBay payment system at the time was Billpoint (100% owned by eBay)

From November 1st to mid December 2000, Canadian sellers could withdraw their money from PayPal directly to their MasterCard and/or VISA.  MasterCard suspended PayPal for a few months in mid-December as this was against their rules.

In the early days, PayPal was charging 7% to 9% "spread" to convert US$ into Cdn$ (remember there was no eBay.ca at the time; all eBay transactions were in US$ exclusively).

The only way at the time to beat the spread was to have a bank account located in the USA.  Banking rules prevented PayPal from transferring US$ into US dollar denominated account held at Canadian banks.

It took about a year for PayPal to gradually reduce its conversion spread to be competitive with US banks and other financial institutions (2.5%).

[inuk_the_polar_bear]

Yer doubting Pierre? Yes, it has been this way for years. Thing is, most Cdn financial institutions have no footprint in the USA. Worse, are credit unions, which only have a provincial footprint.

The problem is the lack of integration between the Cdn banking system and the American system. Canada has a handfull of banks and they co-operate. Americans have thousands and thousands and they do not co-operate with each other.

[pierrelebel]

Actually the real problem is 9/11.

Until then, it was possible for Canadians to open a bank account online with a bank located in the USA.  That door was closed by the Patriot Act, soon after 9/11.

Now, to open a bank account at a bank located in the USA. one must visit the branch and provide proper identification (passport preferably).  No big deal but it must be done in person.

[tobyshitzu]

You can add and withdraw to a US$ account opened in Canada, as long as its at royal.  Google it, lots of links to comments and instructions to what account and what routing number to change to.  I don't, as no need being grandfathered with the paypal debit card.  But lots do, and it works. 

[pierrelebel]

Toby that information is outdated.  RBC sold its interest in Centura in 2011 and the transaction closed last year.

[tobyshitzu]

its still works in 2013...