Paypal Exchange Rates: Bank or Credit Card?

This was a question I’ve been very curious to know ever since Paypal allowed direct withdrawals to local banks and via credit card. This week-end, my CC bills arrived so I’m able to compute the going exchange rates for both withdrawal methods.

I made two 500-dollar withdrawals direct to my HSBC credit card on January 24 and February 12, 2008. The bank exchange rates for those dates are Php41.16 and Php40.77, respectively. The exchange rate that appeared on my CC bill were Php40.42 and Php39.88, respectively. That’s an average of Php0.815 difference for the two transactions.

Note: When withdrawing Paypal funds to a credit card, it will not appear as Paypal Withdrawal in the merchant description as Paypal says it should. Instead, you will see your complete name with ID Code 4029357733 coming from country code LU (Luxemburg).

So, we can now compare both transactions via direct bank deposit or credit card:

Paypal to Bank Deposit: Php0.90 difference + Php200 (Bank Remittance Fee*)

Paypal to Credit Card: Php0.815 difference + $5 (Paypal Withdrawal Fee)

My guess is that the difference in the exchange rates between the bank and the credit card companies are mostly attributed to the fact that they are separate banking entities. Another test to the same bank and credit card company will prove this.

In essence, the only valid comparison between the two is the Paypal Fee and the Bank Remittance Fee which is almost the same amount also. Looks like there’s no significant difference between the two after all (unless you’re withdrawing thousands of dollars at a time).

On a related note, the lower exchange rates and additional banks fees doesn’t really make a big difference when receiving funds via Xoom, as I previously outlined before here.

*The bank remittance fee seems variable and depends on your bank. However, various feedback pegs the amount to Php200, at least for BDO, BPI, Chinabank and Metrobank.

Abe Olandres

Abe is the founder and Editor-in-Chief of YugaTech with over 20 years of experience in the technology industry. He is one of the pioneers of blogging in the country and considered by many as the Father of Tech Blogging in the Philippines. He is also a technology consultant, a tech columnist with several national publications, resource speaker and mentor/advisor to several start-up companies.

https://www.yugatech.com

23 Comments

Dexter | Techathand.net says:

17 years ago

Withdrawing in Credit card will be better if you are going to use your card to purchase. But if you need cash it would be better to get the payment via Local bank so that you don’t have to pay a cash advance fee when withdrawing your money thru Credit card
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Alex says:

17 years ago

Hi Yuga! I’m recently a victim of the “Limited Account Access” due to a supposed “suspicious activity regarding the receipt or withdrawal of funds.”

Here’s my story:

http://alexmaximo.com/2008/02/paypal-took-my-money/

Any tips on how I could get full access back? Or at least get back the amount that I still have in the account which is still of significant amount($XXX.XX).
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Andre says:

17 years ago

so banks are still deducting a fee even if you are sending over PHP 7k?
I was hoping there would be none of that. Anyway in the end it seems better than Xoom’s rates and fees? Did you check what the Xoom exchange rate was for that day?
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Jeric says:

17 years ago

@Andre

Unionbank doesn’t.
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ia says:

17 years ago

@Jeric: Unionbank does deduct. All electronic transfers are charged a fee—just talked to a Unionbank person this morning and that’s what she said. In my experience it was 100.00 pesos for the PayPal withdrawal to bank account (plus the 50.00 pesos if you withdraw less than 7,000.00 pesos). Apparently that’s as cheap a fee as you can get.

The funny thing is, the incoming funds was labeled as “inward remittance via PCHC” (Philippine Clearing House Corporation) and if I didn’t prod the person yesterday to find out if it was actually from PayPal, she would have just repeated her “script” that it was only labeled like that and she didn’t know anything more than that. Why bother calling customer service if they don’t have access to more useful information? Can’t they give more detailed descriptions of their transactions so we aren’t so confused?

Anyway, I can only wish the exchange rates weren’t so “good”.
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Abe Olandres says:

17 years ago

@ Alex – have you contcated them and explained? I think the best way really is to get some proof that you are the real owner of that account. Credit card bills, certificate of residence or even passport should help you verify that.

Will be meeting with eBay/Paypal people next week and ask them about this as well.

@ Andre – Xoom exchange rates is around Pgp1.05 difference. Not much different from Paypal’s Php0.90 which makes Xoom a good alternative.

@ia – been asking Paypal reps why the banks aren’t quite informed about this development. They’re not really that organized.
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L.A says:

17 years ago

Does anyone know how to verify PayPal and EON? I was being denied for some reason even though my EON is fresh from the Bank. Help x_X
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Alex says:

17 years ago

Thanks, Yuga.

After unloading all pertinent documents, they’ve given me full access to my account and I’ve made my first successful withdrawal.

But they never refunded me the cost of conversion fees when they reversed my initial withdrawals. Cost me around $32. As we know, $32 converted to peso is already a significant amount.

Could you mention these to eBay/Paypal people? They need to beef up their understanding of our market. :D
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penny says:

17 years ago

hello! I have this problem. I want to buy something in ebay international but I dont have a credit card to support the paypal requirements. do you know anything or someone who can bid for me in ebay and then Ill just pay him/her thru bank deposit? or any alternative for non-paypal users who really needs paypal for ebay purchase. Please email me. Thank you so much!
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Head Geekette says:

17 years ago

@L.A. You’ll have to use your card first for a Visa purchase before you finally get to enroll it as a credit/debit card. In my case, I was able to enroll my Unionbank EON account as a bank account but not as a credit/debit card. Only when I was able to pay my web host ($1.50) with my EON account was I able to enroll it as a credit/debit card.

I’m no just waiting for five business days to pass by before I call up Unionbank to get the number and fully validate it on PayPal.

@penny You can get apply for a PayPal account and enroll someone else’s card to it. Another option is getting a new bank account that has international debit power via Visa or Mastercard. So far, China Trust and UnionBank have this feature with both of them riding on Visa Electronic.
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