Conversion Option On Paypal

[allcraz]

So, I used to think that if I chose PayPal's conversion option (saw what I was "paying" in pesos) that I wouldn't get charged the 15, now 20%. But I now realize that you get charged either way. So this may seem like an obvious question to some, but I got a C in Finance...which conversion option do you choose on PayPal?


Use PayPal's conversion process to complete my transaction using my card's currency.
Both the original transaction currency and the converted amount that I will be charged are disclosed for my convenience. I understand that MasterCard and Visa have a currency conversion process. I have chosen not to use the MasterCard and Visa currency conversion process, and I will have no recourse against MasterCard and Visa with respect to any matter related to this conversion.

Bill me in the currency listed on the seller's invoice.
I will not know which foreign exchange rate has been applied to this transaction until I receive my card statement from my card issuer. I acknowledge that by choosing this option, my card issuer will determine the foreign exchange rate to apply to this transaction, and that I will not be informed of the foreign exchange rate or any additional foreign exchange fees applied until I am billed by my card issuer.

I'm assuming one must end up being better than the other?

Thank you.

 

[Splitty]

Paypal does not have an option for Pesos anymore. Keep it all in USD.
Also Paypal gives you a shitty exchange rate (5.4) with the peso, but still beats paying blue market.
Kristina will get her 20% whether you want to pay it or not.

 

[allcraz]

Thanks for the reply. I've had other people say they aren't given an option, but I'm on right now and it shows me the total in pesos. In fact, it chooses that as default.

 

[Inferno.]

The 20% is not due to the currency, is because those institutions that are billing you are outside argentina. If they are charging you from outside the country (it doesn't matter if they say the payment is in ARS, GBP, EUR), they will create a small debt that will be paid using the BCRA dollar reserves because of course, other countries won't accept pesos. For example, your bank, through visa, will need to acquire dollars (from the BCRA) to pay the debt you contracted in this other country. You are paying with pesos, but the bank can't pay with those pesos outside, so they need to buy dollars (and they can at the official rate using your bill).

Always use the second option. First, Paypal rates are usually above the ones your bank has, so you will end up losing from the beginning. Second, some banks can't manage bills issued in ARS from another country, so what could happen is that the bank will convert this ARS bill to USD.. and in this conversion you are losing again. What can also happen is.. even if you find this weird, is that this USD amount is reconverted again to ARS in the same bill. It goes from ARS-USD-ARS in the same bill. Other banks just ignore this and charge you in the original USD.. but it doesn't matter, choosing the first option will make you lose every time. If it is a small purchase, you won't see it, but if you spend a lot of money you will be annoyed.

You can change that from.. Profile --> More Options --> My money --> Paypal Balance (Currencies) --> Change ARS to for example, USD and make it your primary option (it seems ARS is the primary currency in your account).

Hope this helps you,
Regards

Chris

 

[nikad]

Both options have pros and cons. I have not been able to use the pesos one when selecting it though.

If you use Visa / Mastercard exchange rate the exchange rate might look better but in reality the exchaneg rate is the one that is current at the time your credit card statement is due, you cannot cancel the debt in usd with pesos before the due date. So if the official dollar goes up, you are screwed. Of course you pay 20% tax

Now if you select the Paypal rate, it is not so good, BUT you freeze the exchange rate to that of Paypal´s at the time of your transaction, this means that if after that the official dollar rate goes up, it will not affect you. You basically are paying more but guaranteeing the exchange rate. Here you will see the transaction sometimes in usd and other times in pesos on your bank statement, however and with no distinction you will be charged the 20%.