Why don’t eBay use PayPal’s exchange rate?

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Tamebay reader John has been looking at the exchange rate and wonders why eBay’s exchange rate is fixed at unrealistic levels. To be fair eBay display exchange rates as “Approximately” and you’ll get PayPal’s exchange rate when you come to pay, but you might not buy in the first place if you think the item is too expensive or as is currently the case have a nasty shock when you come to pay and find it costs a lot more than you were lead to believe. Here’s John’s thoughts:

I saw the bank rate today for Euros tipped over 1.24 I wondered what rate eBay used to convert items listed in Euros. I was astonished to find they are using the standard bank rate.

eBay approx exchange rateHere’s an example of a product on showing on eBay UK, sold by a German seller and listed at 850 Euros it is converted by eBay currently as “Approximately £685.15” which is an exchange rate of £1=1.24. If I go into PayPal and get a conversion rate, its currently 1.2 so this item would ACTUALLY COST £708.33

I realise there are lots of varying buying rates available for currency, but NOBODY can get the standard bank middle rate so surely, especially given their close ties with PayPal, eBay should be using PayPal’s current conversion rate.

This is making items appear cheaper for buyers than it will actually cost them, and applies to shipping costs too, it also affects UK sellers, where same items will look cheaper due to unrealistic exchange rates. Surely this is a fundamental flaw?

I realise its an ‘approximate’ conversion, but given that in reality most people will have to use PayPal to pay for overseas purchases, PayPal’s rate would be much more reasonable.

Final tip from John to save money

If a currency payment needs to be made using PayPal, its actually better to convert your £ balance into the currency first, rather than letting paypal convert your payment, bizarrely they use 2 rates !!

eg I try to make a payment to someone for $100 without converting my £ first, I get a rate of £1 = 1.63147, but I can convert my £ first myself and get a rate of £1 = 1.63988

strange but true……………

7 Responses

  1. Does the question of why really need answering? Isn’t it obvious? PayPal inflate the rate to make more money. Dohh!!

    I had a buyer in Australia and after PP had mugged him on the exchange rate he ended up paying an over-the-top £50 extra. This was all in addition to the normal fees that PayPal charge. He was really pissed off and thats not good for my business.

    PayPal operate like a bank but with no accouantability, transparancy, or controls. They simply do as they wish. Corporate gangsters IMO.

    For more horror stories take a look at:
    You wil be shocked at what you read.

  2. Yes, it can’t be coincidence that it exactly matches the new exchange rate (mind you I’ve never checked it over a period of time). I suspect you are being diplomatic calling it a fundamental ‘flaw’!

  3. I use two eBay accounts and two Paypal accounts to minimise currency fees, reducing charges at withdrawal.
    Send Money from Paypal UK to Paypal Euro
    XE Rate 1.19356
    Paypal Rate 1.14905
    Margin 0.037
    Fee 0.005
    Total 4.23%
    Withdraw funds & Convert GBP to Euros
    XE Rate 1.19356
    Paypal Rate 1.16096
    Margin 0.027
    Fee 0
    Total 2.73%

  4. Thanks for pointing this out, John. I would also like to point out that if you receive payments in Euros in your UK paypal account and want to withdraw the Euros to a UK based Euro account, Paypal will convert your Euros to GBP then the bank will convert the GBP back to Euros. Even if you have a separate Euro balance.

    At least that’s my understanding of it, maybe i’m missing something?

  5. .

    I just got a repaid euro card (2nd one) from easyjet which is administered by fairfx.com.

    I just put in 200 euros (=£163.50p = 1.2210 euros per £).

    This is an ideal substitute for |Payp[al and the rates are good.

    Does not help with buyers paying, but does help for us buying in $ and €. Instead of signing in to a paypal account when paying, just use the pay with debit/credit card link at bottom of paypal sign in page & enter card details.

    Apply here:



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