PayPal Now convert all Purchases From Currency of Purchase to AUD and Then Back to USD Again?

drspy00 on 23/07/2019 - 13:40
Last edited 23/07/2019 - 17:36 by 1 other user

I have been following up an unusual problem with Paypal which I posted about here. Ive been told as the explanation, that even though I did not select the paypal currency conversion and elected to let my card handle the transaction, Paypal now convert all foreign currencies to AUD automatically, and do not allow the card to do this. Does this sound right? I have been using paypal for buying and selling for 18 years so its news to me. Is it something that just changed recently or is it a misinformed paypal rep lying or just confused?

Transaction was in USD, I clicked pay and to let my card handle the transaction, but it showed up on card as AUD and with the 3.5% fee added, they are claiming that if your account is in AUD you cannot elect for your card to handle the transaction.

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Comments

  • Caped Baldy on 23/07/2019 - 13:50
    +1

    Unless it's changed in the past month there is an option to pay in the default site currency. When you select which card there should be an option to select currency.

    I really hope it hasn't changed cos that will be really shit of paypal.

    • drspy00 on 23/07/2019 - 15:16

      I dont think its changed, I think its an inexperienced staff member. Seems my problem is getting lost in translation but this is what they said.

  • HighAndDry on 23/07/2019 - 14:33
    +1

    that even though I did not select the paypal currency conversion and elected to let my card handle the transaction

    From what I understand, Paypal doing the conversion is the default, and you have to proactively select that you DON'T want Paypal to perform the conversion.

    But I don't think the behaviour around this has changed recently, maybe a few years back?

  • Stone Monkey on 23/07/2019 - 14:35
    +7

    There is a way to ensure that Mastercard or Visa do the currency conversion instead of letting Paypal do the conversion. Follow the steps in the post by "jink" in the following Whirlpool forum thread, which discusses your issue with currency conversion of purchases.
    https://forums.whirlpool.net.au/thread/3nz44jk3?p=2

    • ESEMCE on 23/07/2019 - 16:07

      Great thread and post, thanks for the link.

      • Stone Monkey on 24/07/2019 - 09:32

        Another tip is to periodically check the currency conversion settings within PayPal, I do it before committing to a large overseas purchase. There are some reports of the settings changing back to PayPal doing the conversion in some instances.

  • harrribo on 23/07/2019 - 15:07

    thanks to stone monkey for that link for everyone to check

    Paypal's currency conversion scam - PayPal - Shopping - Whirlpool Forums

    • drspy00 on 23/07/2019 - 15:10

      Already did this, and it still happened. I am very aware of Paypals conversion, and it used to always come up as a secondary option. When ive done mock purchases to test it out, its now extremely hard to even see if the currency conversion option is even enabled, so people must get caught all the time with it. For large purchases it can be a hefty fee! Im annoyed because I was so careful to make sure it only came off the card.

  • drspy00 on 23/07/2019 - 15:08
    +1

    I have already confirmed it was set up to allow only credit card doing the conversion. I have a screenshot just before payment and are very aware of the 3.5% fee. But its getting much easier to get bitten by them! Paypal are claiming because the conversion was in USD, and my account is Australian, an internal conversion was made without my knowledge and this is normal, but I have never had this happen before. I buy many large items from UK and US and currency conversion is always in the native currency of GBP, or USD. I think it has to be a case of an inexperienced employee but I have requested to talk many times to someone with English as their native language, someone higher up but they are neglecting my request.

    I have spoken the ACCC who say its out of their control, but they believe its a matter for ASIC and have encouraged me to make a report. I believe something dodgy has happened here, and its about principle. I would rather not be reporting to government bodies but I am getting nowhere with paypal!

    • burningrage on 23/07/2019 - 21:14
      +1

      Why won't ACCC take the matter? Isn't it under the "misleading and deceptive" conduct in the sense you have specifically asked for the credit card issuer to determine the FX conversion and yet Paypal continued to ignore that?

      Unless Paypal issued a public statement saying it is going to ignore your instruction, I think it should under ACCC jurisdiction.

      • ssquid on 23/07/2019 - 21:37

        ACCC are pretty useless for dealing with anything specific. They record the issue but only take action if they get enough people reporting the same problem. Even if it's really straightforward stuff like a retailer not honouring an advertised price.

        • miarn on 25/07/2019 - 00:21

          Yes, because the ACCC has better things to do with its (limited) resources than chase PayPal for $2 of currency conversion fees…

  • drspy00 on 23/07/2019 - 15:23

    I am on live chat with this person, and she has seen my screenshot of the "card issuer will determine exchange rate" still saying she if you select any paypal option it will charge you a conversion fee. Keep wondering if she is saying you can only use the native currency in the credit card section, but selection credit or debit card at checkout only brings a similar paypal option, like paypal express, and Ive tried it and it makes no difference.

  • [Deactivated] on 23/07/2019 - 15:53
    +1

    Paypal have been strong-arming customers for years with this issue (mainly trickery). It seems an easy money grab.

    Just suggesting if it's unchangeable at the mo, it'll likely be restored later.

  • EightImmortals on 23/07/2019 - 16:43

    Hey nice thread. So what's the best option? Use PP with 28 Degrees card and set to use the cards conversion rate?

    • ThirdRonnie on 23/07/2019 - 23:49
      -1

      Exactly this. It's the bank charging the 3.5% "overseas transaction fee". The 28 Degree card has no fees and gives the correct exchange rate on the day.

      If your card provider charges an overseas transaction fee, they're most likely dudding you on the exchange rate as well and, believe it or not, you might be better off letting PayPal do the conversion, as the bank should then not charge you the 3.5%

    • burningrage on 24/07/2019 - 07:16
      +2

      I believe there are two conversions happening here.

      The first one, done by Paypal at a crappy exchange rate (A class action in Toronto suggested 2.5% premium) and what OP is saying despite specifically asking for the credit card issuer to determine the exchange rate, Paypal disregarded this. In this event, having a 28Deg or any non-international transaction fee cards would not be effective.

      The second one, is charged when the vendor processes the payment not in Australia and as mentioned above, you cannot simply determine where the vendor is going to process the payment. A recent example is GoFundMe, even though your donation is in AUD but the payment is actually processed in Dublin so you will get charged the International Transaction Fee for this. This ranges about 3.3% to 3.5%.

      Having a 28degree for example, will avoid the 2nd one but won't avoid the first one if what OP saying is true, that is, Paypal forces everyone to use its conversion option and disregarded your wish to have the credit card issuer determine the rate.

      At worst, you would be inflicted both, adding about 7% to the cost.

      Personally, I am yet to see evidence if Paypal has updated its system to enforce the first conversion unilaterally. What OP is saying seem inconclusive to me at present.

      The only way to avoid both is NOT to use Paypal but that comes with its own inconvenience I guess.

      • drspy00 on 30/07/2019 - 11:06
        +1

        The card is ING so the problem only with Paypal. They have basically admitted that it went through at the Paypal conversion rate, and apparently they have a right to decide per transaction if this happens without telling customers even if you choose to let your card do the conversion. There are absolutely no fees with ing and they always refund if there are so I know its not on that end. The problem is, the ACCC and the bank have admitted it was wrong, but the ACCC do not help with financial providers so suggested I report to ASIC, which maybe I will, its getting to the stage of almost not bothering due to the money, but its not really about money, more about them getting away with these scams. This is the scam I avoid overseas, I do not use dodgy ATM machines that do this, and always opt to use the local currency in stores when asked to avoid this too! But with paypal you have no choice it seems!

  • burningrage on 31/07/2019 - 18:18

    Today I received a Paypal user agreement update. Here is the interesting part.

    "We are changing the PayPal currency conversion fee to 4% for converting all currencies (including US and Canadian dollars), for transactions that involve a PayPal currency conversion when you pay for goods or services, receive a refund (beyond 1 day from the original payment) or send money. For all other transactions involving a PayPal currency conversion, we are changing the PayPal currency conversion fee to 3%"

    Not sure if it forces you to use Paypal Currency Conversion system even if you opt to let the credit card issuer determine the rate.

  • burningrage on 31/07/2019 - 18:29

    Within the user agreement, this clause appears to be updated.

    How we convert currency
    If PayPal converts currency, it will be completed at the transaction exchange rate we set
    for the relevant currency exchange. The transaction exchange rate is adjusted regularly
    and includes a currency conversion fee (described below) applied and retained by us on
    a base exchange rate to form the rate applicable to your conversion. The base exchange
    rate is based on rates within the wholesale currency markets on the conversion day or
    the prior business day; or, if required by law or regulation, set at the relevant government
    reference rate(s).
    For some uses of your PayPal account, PayPal may determine currency conversion is
    necessary. For any of the following transactions that involve a currency conversion,
    the currency conversion fee is 4.0%:
    • Paying for goods or services in a currency other than the currency the goods or
    services are listed in.
    • Receiving a refund beyond 1 day of the original payment.
    • Sending money to a friend or family member such that they receive a different currency
    from the currency you pay in.
    • Sending money using PayPal’s Payouts or MassPay products such that your recipients
    receive a different currency from the currency you pay in.
    For all other transactions involving a currency conversion, the currency conversion fee is
    3.0%.

    Currency conversion choices

    When your payment is funded by a debit or credit card and PayPal determines a
    currency conversion is necessary, you consent to and authorise PayPal to convert the
    currency in place of your debit or credit card issuer.
    In most cases, you may have the right to have your card issuer perform the currency
    conversion, if applicable for that card issuer and network. Currency preference selections
    may be presented to you in various forms, including a choice of which currency is used
    for the transaction, whether PayPal or your card issuer performs the conversion, or which
    conversion rate is used for the transaction, among others, and may be made available
    individually for each card and for each automatic payment agreement. If your card issuer
    converts the currency, your card issuer will determine the currency conversion rate and
    what fees they may charge.
    PayPal will always perform the conversion for transactions where your PayPal balance
    or linked bank account is the payment method.

    • Stone Monkey on 01/08/2019 - 14:54

      Thanks for posting this. Another thing we must consider when using PayPal for overseas currency transactions. There are now different rates of transaction costs (4% v 3%) for different types of transactions. Does it say in the User Agreement when this was updated or when the User Agreement was last updated?

      • burningrage on 02/08/2019 - 12:16

        Will be effective 9 September 2019.

      • drspy00 on 03/08/2019 - 11:50

        But surely they cannot take money from you if you elect to let your card handle the currency conversion? It seems they decide it!

  • drspy00 on 27/08/2019 - 13:46

    An update to this is Paypal sent a crazily stupid explanation about a month later. They confirmed all that I thought but their excuse for the currency conversion was sometimes paypal converts automatically if their system deems it necessary, even without permission. They refunded the $20, but in USD which I appreciated but still means there's a problem!

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