1 Easy Step To Avoid PayPal Currency Conversion Fees – Beragampengetahuan

Every so often, we may need to use PayPal when dealing with sending or receiving money, especially when we have any sort of online business or side hustles.

Frankly speaking, having access to PayPal has made it so convenient for us when dealing with cross-border payments.

However, this convenience hides a costly little problem for us, which I will document in this short article below.

Providing Convenience Vs. Extra Fees

PayPal charges a currency conversion fee, and on top of it, they charge a currency conversion spread as well.

Just a couple of days ago, I needed to pay someone in Taiwan NT$2,120 after he invoiced me via PayPal.

When I clicked on the virtual invoice and tried to pay, PayPal suggested that I pay in SGD since I’m from Singapore and prompted that I would pay a total of SGD$94.09 to my vendor.

To be fair, PayPal has stated that the conversion rate has included the currency conversion fee.

As a savvy individual in the personal finance space, I resisted the lazy urge to click Pay in SGD and decided to check out the spot rate for exchanging SGD to TWD and was blown away by the difference that was quoted.

Of course, retail customers do not have access to spot rates or mid-market rates, but I’ll let the subsequent screenshot show you the real difference in rates.

Opting not to pay in Singapore dollars, I switched the option to Pay in TWD instead and selected my Trust card because it charges zero foreign currency fees.

How Much Did I Save In Currency Conversion Fees?

After the transaction was processed, I checked the Visa wholesale exchange rate that my Trust card used.

Turns out that an accidental click due to laziness would have cost me SGD$4 (which is equivalent to a 4.5% difference) if I hadn’t bothered to double-check the fees and exchange rate that PayPal was charging.

• PayPal – SGD 94.09
• Trust – SGD 89.93 (4.5% cheaper)

Now, that would have been a painful lesson.

Zero FX Fees Cards Have Changed The Payment Landscape

It was the case in the past that there probably isn’t a great deal of difference between paying the fees for using PayPal’s currency conversion and incurring bank charges to perform currency conversion for us.

If I had used my HSBC Revolution Credit Card to pay for the invoice, I would have incurred a painful 3.25% fee. Personally, I like to keep things simple, and I will only use my air-miles strategy credit cards for SGD purchases.

However, the payment landscape has since made a drastic change.

The plethora of zero FX fee cards such as Trust (unlimited overseas ATM withdrawals), YouTrip (best exchange rate) and BasedApp mean that we have direct access to Visa and Mastercard wholesale exchange rates, and there is no need to pay anything extra.

PayPal Is Well Supported But Expensive

For now, I am still using PayPal extensively simply because it is well-supported for payments internationally.

Even when it means I’m throwing dollar bills down the drain every month, at least I am able to receive payments.

However, every chance I get, I am gradually pivoting away to other payment platforms that can save me a little bit more.

For now, I just have to combine the convenience provided by PayPal with Trust, which functions well as my business account.

I guess that’s it for this short article side-hustle talk.

Got any good tips to share with me? Let me know below!

Kevin started beragampengetahuan when his net worth languished at negative $25,755. His desire to turn things around led him to build passive income from investments and side hustles that pay for his daily expenses and vacations. You can learn more about Kevin here.