DISCLAIMER: Your mileage may vary, and this test illustrates what I encountered as a non-US resident buying a product from the US.
When you buy products from international sellers, whether on eBay or other sites, you are posed with an option to choose either:
1. PayPal’s currency conversion process
2. MasterCard and Visa currency conversion process
The question I always ask is: which gives me a better rate?
I had a hunch that PayPal would try to make some money off the conversion, so I ran a test while buying an item off eBay.
The product price was USD888.25, and PayPal was offering me a rate of MYR2,854.89 (that’s Malaysian Ringgit, but it doesn’t really matter, it could be Australian Dollars or Indian Rupees for all intents and purposes).
I decided to go with USD888.25 and see whether I would be charged more or less than PayPal’s prescribed rate of MYR2,854.89. A day later, I checked my banking system online and was shown that the charge for USD888.25 was converted at only MYR2,830.33, which is a saving of approximately USD7.50.
Here are the screenshots that show proof of the transaction amounts. The first screenshot below shows the conversion that was performed by my bank.
Next is the screen that shows what PayPal “offered” to convert the currency to.
In order to change the billing currency, it’s simple. Click on the “Other Conversion Options” link that is shown, then select “Bill me in the currency listed on the seller’s invoice”. Hit “Submit”, then you will be billed in the seller’s currency, and your bank will do the necessary conversion.
Here is the screen that shows the seller’s currency instead of my own home currency. Click “Continue” and you’re on your way to saving money!