PayPal Conversion Fees (and how to avoid them)
PayPal charges currency conversion fees in quite a few cases. If you make a payment in a currency different from your card or account currency, PayPal applies a currency conversion fee typically around 3-4% above the base exchange rate. If you pay with a card linked to your PayPal account and opt to let PayPal handle the currency conversion, you'll be charged their conversion fee. But if you choose your card provider’s exchange rate, your bank’s foreign transaction fees (if any) will apply instead.If you receive money from another country, PayPal charges an international transaction fee (which varies by country but can be around 1.5% of the amount received). And finally, if you withdraw money to a bank account in a different currency, PayPal applies a conversion fee.
If you link your PayPal account to a Curve Wallet, you can avoid PayPal conversion fees when spending online in a foreign currency or indeed in-store – as Curve enables millions of PayPal customers in the UK to use PayPal anywhere in the world, online or in-store.
What is the PayPal Exchange Rate?
PayPal uses their own exchange rate, which applies a currency conversion fee of 3-4% above the mid-market base exchange rate.This means that if the mid-market exchange rate (real FX rate) is 1 GBP = 1.15 EUR, PayPal might offer 1 GBP = 1.10 EUR after applying their markup.Their rates change frequently and can be checked in your PayPal account under "Currency Converter."Mastercard, on the other hand, uses near mid-market exchange rates, typically very close to mid-market rates.The Mastercard rate is usually much better than PayPal's rate because it doesn’t include an extra 3-4% markup.
So if you want to spend with PayPal in a foreign currency, but you'd prefer to get the Mastercard exchange rate, just link your PayPal account to Curve and leave the PayPal conversion fee behind. Curve is a digital wallet that combines all your debit cards, credit cards and PayPal account into one universal fee-free card.
How to avoid PayPal Conversion Fees with Curve
- Download the Curve Wallet app
- Link your PayPal account to your Curve Wallet
- Tap to choose PayPal as your selected payment method
Curve will create a 16-digit card number, CVV and expiry so it operates like any other payment card, which you can use online at checkout, or in-store. There are two ways you can use your Curve card in-store:
- With a physical Curve Pay card
- With a mobile wallet like Apple Pay, Curve Pay
PayPal Currency Conversion Fee for withdrawals
PayPal may charge a fee when withdrawing money from your PayPal balance to your bank account, depending on the withdrawal method and country. Here’s a breakdown:
1. Standard Bank Transfer (Usually Free)
- Processing time: 1-3 business days
- Fee: Usually free for most countries and currencies.
2. Instant Transfer to Bank or Card (Fee Applies)
- Processing time: Within minutes
- Fee: Usually around 1.5% of the amount withdrawn, with a minimum and maximum fee cap depending on the country.
3. Currency Conversion Fees (If Applicable)
- If you're withdrawing in a different currency than your PayPal balance, PayPal applies a conversion fee (typically 3-4%).
4. Withdrawing to a Linked Card
- Some countries allow withdrawals to a linked debit or credit card, which may have an additional fee.
How to Avoid PayPal Conversion Fees when withdrawing from your PayPal balance
- Use the standard bank withdrawal option instead of instant transfer.
- Withdraw funds in the same currency as your bank account to avoid conversion fees.
- Use Curve to spend anywhere with your PayPal balance and avoid being charged conversion fees
