What does PayPal charge for currency conversion
PayPal charges a currency conversion markup of 4.00% above its base exchange rate for most international transactions involving Indian Rupees (INR) and many other currencies.
The cost of converting money through PayPal is made up of more than one element, particularly for businesses in India receiving payments from abroad.
- Exchange rate markup: PayPal adds a percentage on top of the base exchange rate to form the rate it uses for the transaction, and for INR and many other currencies this markup is 4.00%.
- International transaction fee: Indian business accounts receiving foreign currency payments typically also pay a 4.4% international transaction fee, which PayPal deducts before the conversion markup is applied.
- Exchange rate gap: PayPal uses its own marked-up exchange rate instead of the live mid-market rate, so the difference is built into the amount you receive rather than shown as a separate charge.
When these currency conversion fees are combined with the transaction fee, the total cost of receiving and converting an international payment into INR can reach 7% to 9% of the payment amount.
PayPal publishes its current rate tables on the PayPal Consumer Fees page for India, which lists the rate above the base exchange rate for each currency.