Friday, January 15, 2016

PayPal Exchange Rate: How to Save Money

Looks like PayPal is earning money whenever I'm paying for something online priced in a foreign currency, say US Dollar, and the payment method I'm using is in a different currency. In my previous purchases, I noticed that PayPal and my bank's exchange rate are different. If I were to choose, I'll go for the latter. Why?

Because PayPal's Exchange Rate is High

If I will pay in US Dollar or other foreign currency and I will use a debit or credit card in local currency linked to my account, the default exchange rate that will be applied is PayPal's conversion rate which is 2% and above higher than my card issuer's foreign exchange rate. That's what I have noticed. Here's an example:

I purchased CD albums online and was charged in US Dollar. The total purchase amount was $40.33 [item total plus shipping fee]. I used a debit card in Philippine Peso and here's the difference between PayPal and my card issuer's conversion rate:

PayPal Exchange Rate

Card Issuer Exchange Rate

I selected my card issuer's exchange rate for this particular transaction, and in return, I saved PHP126.39 [$3.05].

How to Apply Your Card Issuer's Exchange Rate

The process is very easy.

1. Once you're on the PayPal Checkout page, click on the Other Conversion Options link. See screenshot below.

PayPal - Other Conversion Options

This is a payment I made a few days ago. As you can see, the total based on PayPal's conversion rate is PHP244.15 [$5.00]. The total debit that reflected on my card statement is PHP238.77. That's after applying my bank's exchange rate.

2. On the next page, select the second option: Bill me in the currency listed on the seller's invoice.

Bill me in the currency listed on the seller's invoice

3. Click on Submit. You'll be redirected on the Checkout page where you can redeem a PayPal gift card or promo code, change your payment method, and update your contact information before you click on the Pay Now button.

The total on the Checkout page will be switched to the original currency amount once you apply your bank's foreign exchange rate.

If you have multiple debit or credit cards linked to your account, I advise that you check first the exchange rate of each card issuer currently so you can see which one is more preferable to use [to save money]. Please take note that the the higher the total is, the higher the saving will be.

Tip: If you have a PayPal balance or credit on your account in US Dollar, use it to pay bills in USD. If not, don't convert it because PayPal's conversion rate will be the only option. Use a debit or credit card instead.


  • January 14, 2016 - This post has been transferred from StarrGuide to this blogspot domain. Added new screenshots. Post was revamped. Comments were not migrated. Originally posted on July 13, 2012.


Please take note that this post has been created based on my personal experience and to serve as a reference.

For questions, suggestions, or comments, you may use the comment form below or send me an email by filling out the form at the sidebar. Feel free to inform me of any updates about the topic.


  1. Hi, I want to purchase something on storenvy but this option doesn't seem available so is this only possible on eBay?

    1. Never bought any item from the said store, however all shopping websites I purchased items before using PayPal gave the same option during checkout.

  2. Great info! Thank you for this.. May I ask sir, what bank would you recommend as to having a low/fair $ currency exchange rate? Based on your personal experience of course. :)

    1. Where you from? XD I only do business with BPI.

  3. Hello! I use EastWest Bank account. I don't need to change my currency into pesos right? this will be my first time to withdraw money from Paypal.

    1. Are you referring to your account setting? It's been years since the last time I withdrew money from PayPal, so I'm no longer familiar with the process. Does PayPal show the same option in this post?


Thanks for the comment, suggestion, or whatever. I'll reply as soon as I can. Make sure you don't write your message in text-speak as it will most likely go to Trash. Write your comment legibly and don't make it hard for me. Type in English only. Again, thanks! XD - TenTen