Paypal fees and foreign currency question

[Paddy C]

This may be obvious, but I'm not sure how it's handled...

I'm trying to price some gear for sale and will initially offer it only to a US or Canadian seller (I'm Canadian). So the price will be in USD.

What I gather is that if I sell an item for $1,000 US, Paypal will deduct fees of 2.9% + $0.30. This would mean I would receive $970.70 US. Right so far?

What I'm wondering, and can't seem to find a clear answer for, is does Paypal convert the USD to Canadian before placing it in my account, or does it place the amount in my account in USD? If that latter, is it my bank that does the conversion when I transfer it from Paypal to my bank account?

Also, would it make sense to offer a price in $CDN to a Canadian buyer so that he/she can avoid having to pay Paypal's conversion fee?

 

[Turtle]

I think paypal does the conversion and from memory the rates are not too good.

 

[Paddy C]

I think paypal does the conversion and from memory the rates are not too good.

Thanks. Bank rates aren't great either.

Either I'm slow, or it is really not clear on Paypal's site as to how it works.

Judging by the number of Q&As around the web it appears I'm not the only one a little confused as to how it all works.

 

[Paddy C]

I decided to call Paypal to verify this.

Turtle, you are correct. The fellow at Paypal told me that they can only deposit Canadian funds in to a Canadian bank account. So Paypal performs the conversion.

In my case, I would receive the payment I requested in USD, minus Paypal's fees. This would sit in my account as USD until I did something with it.

If I wish to transfer it to my bank account, Paypal would do the conversion, deducting their 2.5% conversion fee, and transfer the money.

It ain't cheap but what can you do?