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New 3% Paypal Transaction Fee?

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#1

I’m a UK seller and up until recently I’ve minimised transaction and currency conversion fees by setting up a USD wallet on my UK Paypal account, withdrawing from Fiverr to Paypal in USD, then withdrawing from Paypal to a US TransferWise account. This way, if and when I wish to convert my earnings into GBP I’m only charged once, at a very competitive rate courtesy of TransferWise. As a UK seller using Fiverr, I recommend this process!

However, Paypal have recently introduced a 3% transaction fee to withdraw to US accounts, which has put a spanner in my otherwise nifty works. 3% isn’t massive, but it is a fee I wasn’t paying previously, that will now eat into my earnings.

Has anyone else come up against this and/or found a way around it? Any recommendations for an alternative, more economical way of getting our earnings from Fiverr?

Thanks all. :slight_smile:

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#2

No, but you can charge a bit more to cover those expenses.

#3

Hi, I am a UK seller and have the same problem, I tried to use Transferwise the same way you explained above but apparently Paypal charges a 3% fee. This is the explanation they gave me.

even it you have USD balance in your PayPal account as long as your PayPal account is registered in UK you will be charge for the conversion so that is the 3% that you are seeing.
For other option, if you do not want to have a fee you can convert it first to UK pounds and then withdraw it to a UK bank account for you to have no fees.

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#4

Thanks for this! However I wouldn’t go with that advice, as you’re likely to lose more with Paypal’s disproportionate conversion fees than with the 3% transaction fee.

Here’s my working:
Today, if I want to transfer $1,000 from Paypal to Transferwise it’ll cost me $30 (3% transaction fee), leaving me with $970 still to be converted in Transferwise. If I then want to convert it into GBP at Transferwise’s current rate including their fee, I’ll get £706.72.

If I simply convert $1,000 in Paypal at their current conversion rate, I get £705.19.

It’s a simpler system to just convert in Paypal, and the difference is small, but you still get a better deal going via Transferwise and I personally feel less mugged off by them than I do Paypal.

Further, if you’re able to hang on to your earnings in Transferwise rather than convert them immediately, you may benefit from keeping an eye on the USD/GBP exchange rate and converting when the pound is weaker.

I hope this helps. :slight_smile: