This article provides answers to the frequently asked questions concerning automatic PayPal currency conversion, especially when receiving payments from clients/buyers or during the usual money transfer. We try to be as recent as possible.
Does PayPal convert currency automatically?
Yes, according to the help center, PayPal converts currency when there is a transfer of funds from an account to another account with a different default PayPal currency. So if you have an account in GBP for example, and you receive, say, 200 USD from a client or friend in the US, PayPal will convert the 100 USD to GBP equivalent using what they call a retail exchange rate.
What is the retail exchange rate at PayPal?
Well, as you know, exchange rates can vary significantly between any two financial institutions, having a clear understanding of the approximate exchange rate used can help you determine the probable value of money you would receive.
Currently, PayPal uses a rate that is generally comparable to the Foreign Exchange dealer near you. They further note that while some FX rates may be posted on banks’ websites, such rates may only be a reserve for the big financial institutions and banks that change over $1 million in any given transaction.
Is PayPal currency conversion free?
Well, currency conversion at PayPal is NOT free. Apart from the retail exchange rate adopted at PayPal, the transaction incurs and exchange fee that is determined by the destination currency and country.
Disable PayPal Currency conversion
Can one disable PayPal currency conversion? Well, the simple answer is Yes, you can prevent PayPal from converting the currency of the money you receive to save on the conversion fees.
To disable currency conversion in PayPal, use the following steps:
#1 Log into your PayPal account
You will need to log into the PayPal account using the login credentials you signed up with.
#2 Locate the Options Icon
Find the options icon (usually on the top right corner of the browser window on a PC) and click it.
#3 Find the Payments Tab
Find the payments tab or icon and click it so that another tab link appears labeled ‘Manage Automatic Payments’. Click the “Manage automatic payments” link (it may need to be clicked twice to open a classic view) and move to the next window with “My preapproved payments”.
#4 Choose Manage Funding Sources
Here you will get to click the “conversion options” link next to the funding source whose transactions should not undergo the currency conversion process.
#5 Choose Bill me in the currency listed on the seller’s invoice
You will at this point see the second among the conversion options listed which states “I will not know which foreign exchange rate has been applied to this transaction until I receive my card statement from my card issuer.
I acknowledge that by choosing this option, my card issuer will determine the foreign exchange rate that applies to this transaction and that I will not be informed of the foreign exchange rate or any additional foreign exchange fees applied until my card issuer bills me”
#6 Click Submit
Clicking the submit button will process and save your changes, making it possible for you to continue enjoying low-fee transactions.
- PayPal: How does Paypal calculate currency conversion rates?
- Roman Reviews: How to disable PayPal’s currency conversion to save money on fees