PayPal Hack to Save 5.7% on International Currency Conversion Charges
No matter how much I curse PayPal but it remains as only solution for my international transactions. It is well known fact that PayPal takes higher currency conversion while paying and lower conversion while withdrawing. For a country like India where 1 USD equals 55 INR, it makes huge difference even if we are able to save just 5%.
I am using a little hack during PayPal checkout which saves me 5.7% (on an average) every time. Not an hack actually but a small adjustment in PayPal Payment settings which often goes unnoticed.
When you are checking out or paying anyone from other country, there is a link to choose ‘other conversion options’.
By clicking on this link, you can select from either 1. PayPal’s currency exchange rate or 2. Bill the invoice in Seller’s currency.
Option 1 is selected by default which you have to change to ‘Bill me in currency listed on Seller’s invoice’.
That’s it. You have an instant savings of 5.7% on your purchase.[alert-note] Approved Credit Cards for Bloggers and Freelancers in India [/alert-note]
Why and How this Happens?
When you choose to get billed in Seller’s currency, PayPal doesn’t convert the amount in your currency. Instead, it bills your credit card in seller’s currency. Now, the conversion responsibility is on bank. Your bank’s conversion rates are obviously lower than PayPal. Hence, you make a saving!
Example: I wanted to send 120 USD via PayPal which equals 7033.19 INR according to PayPal exchange rates. But I chose to get billed in Seller’s currency (US Dollars) and my bank charged Credit card just 6661.34 INR.
Here’s a screenshot of SMS Notification from Bank.
Unfortunately, there isn’t any hack or hidden setting for lower currency conversion rates while withdrawing money from PayPal to Banks. But I hope at least while paying, you can save big amount of cash.
I am using this technique since years and assumed everyone aware about it but a recent interaction with some friends concluded that they never gave it a try. Maybe because, the ‘conversion option‘ text is too small to get noticed. Anyways, now you know so make sure to do it next time paying someone via PayPal.
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Update: The amount shown in SMS Notification isn’t final. There is a Conversion fee deducted by bank on the such transactions but total amount is still less than what PayPal was going to charge. Thanks Tushar Thakur for letting me know about it. You can read the calculations in my comment reply to him.