PayPal currency conversion – which should I choose?

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!


  1. Mohd Farhan - March 6, 2012

    Hmm what about the Maybank exchange rate on the day of the purchase and on the day of the day the charge was in?

  2. synical - March 6, 2012

    Interesting. Always wondered. Good to know :)

    Should try this soon.

  3. bcakes - July 25, 2012

    I’m trying the credit card rate on my transaction today. My issuing bank adds three per cent to the MasterCard rate, which if my math is right will give me about a AUD6.50 savings on the transaction (USD750.00). May be small beans, but it’s the principle!

  4. anonymous - October 19, 2012

    I chose that option and instead of the paypal’s price of RM1304, it turned out to be RM1329 :(((

    • TheBackpackr - November 7, 2012

      Hi anonymous, it’s never happened to me, ever… and I buy a lot of stuff online all the time.

      Did you fund your PayPal account with an Amex card? It does make a difference as Amex has some extra fees that they levy.

  5. Jason - November 26, 2012

    You can check Forex page for the current day’s exchange rate then refer back to PayPal’s rate. For me, PayPal offered a lower rate, but foreign exchange rates shift daily so it is difficult to know :/

  6. Saad - August 1, 2014

    This is true, I saved 8K INR for 2880 USD purchase. Bank rate was better than Paypal exchange rate!!

  7. kaiserstan - August 18, 2014

    Me too, it saves more than RM20 when dealing with yen, it’s better than paypal

  8. A Thomas - September 14, 2015

    Just ordered a phone from Taiwan, paid in USD but my home/base currency is EUR. Paypal exchange rate 1.09 USD/EUR, MasterCard 1.13 USD/EUR. So MasterCard much cheaper.

  9. Dollar saver - July 13, 2016

    Always go for your banks exchange rate. Paypal tries to skim some extra conversion charges from your currency to the foreign exchange.
    So while making a payment using paypal – Always click other payment options and then choose “bill me in the currency listed by the seller”.

  10. alfert - September 28, 2017

    +1 Always go for the bank rate, Paypal is a scam, they charged me 5% for conversion HKD to GBP!!

Leave a reply