Why is ebay/Paypal charging 3.7 % instead of 3% to exchange my moneys canadian to us funds.

[parrawl-0]

This subject was discussed a while back and I think I have a good solution for anyone who is selling from Canada to different countries...ex., US, Australia, Europe, UK, Japan, etc.  I have recently found a solution that helped many different ebay companies in Canada save a lot on the foreign exchange costs.  It's a pretty simple fix!

[a52split]

A simple solution is to have a bank acct at a US bank that you can pull USD from your PP and put it into.   Then convert the $ on your terms.

[marnotom!]

Are you calculating the percentage based on the Canadian dollar's official "buy rate", "sell rate", or the midmarket rate, which splits the difference and is what's commonly (but not necessarily accurately) quoted on currency exchange websites and in the news?

[ypdc_dennis]

Convert your PayPal money balance before buying (or moving $$ to a bank account).

PayPal charges more if they do the exchange rate conversion when you buy.

Some statistics (Sept 7, early morning):

$100 US converted to Canadian dollars

"official" rate - 131.41

Paypal - 128.35 (balance to balance) 2.4%

TD - 127.81 (non-cash rate)

RBC - 127.41

travelex - 117.10 (a top spot on google does not mean it has any value) 10.9%

-..-

[momcqueen]

What solution are you selling? Your post does not say. 

[reallynicestamps]

@a52split

have a bank acct at a US bank

It is important to realize that your US dollar account at the Royal Bank, or any Canadian bank, is not what we are talking about here.

The easiest US banks for a Canadian to get an account with are RBCBank, which belongs to the Royal Bank, and TDNorth, which belongs to TDCanadaTrust.

With snowbird season on us, you should see ad in Royal and TD branches pretty soon.

[parrawl-0]

You can deposit your funds from Paypal to a currency broker and then have the broker exchange the funds and direct them to your bank account.  Much better rates than PayPal.  Usually about .25%-.50%

[parrawl-0]

You can deposit your funds from Paypal to a currency broker and then have the broker exchange the funds and direct them to your bank account. Much better rates than PayPal. Usually about .25%-.50%. I have been doing this for Paypal sellers for quite some time and I've been able to not only achieve better rates than Paypal, but also use technical analysis to sell funds at the better part of the day's range to increase profits.

[parrawl-0]

Those rates are still not good. Banks will charge large spreads because they are not going to get repeat business. PayPal has sellers captive for the exchange because that's where they hold their funds which enables PayPal to charge a massive spread.

[parrawl-0]

I'm talking about the interbank rate that shows up on bloomberg at any point in time. If you're looking to sell USD and buy CAD, you can see the interbank rate on bloomberg and Paypal is usually 3%-5% off of that rate at any given time in the day. I'm able to get a rate of .25%-.5% at any point in the day.

[parrawl-0]

Right, but through what agent will you convert the $? Most banks and Paypal are charging massive spreads on the funds anyway, so you're still not able to get as close to the true value of your money.

[reallynicestamps]

That rate ,which changes constantly, is about huge transfers of funds between banks including national central banks.

My nephew in The City does this buying and selling currencies. The scale is enormous. He handles serveral million dollars an hour.  It's a very high pressure job. 

[marnotom!]

My understanding is that the interbank rate and the midmarket rate are the same rate, and it's not a useful jumping off point for comparison to PayPal's or bank exchange rates. You need to be comparing currency "buy" or "sell" rates for an apples to apples comparison.

[reallynicestamps]

No, the interbank rate is just what it says, but it is more targeted than that.

So Barclay's Bank and the Royal Bank of Canada will have an interbank rate, which may only be good for one or two transactions but Barclay's could have an entirely different rate for Citibank.

The midmarket rate is the average of all the rates around the middle of the trading day.

[marnotom!]

Hmm. Interesting. I found three websites that claim that the terms are synonymous.