how to convert currency in paypal

Are you tired of losing money every time PayPal converts your currency? Whether you’re a crypto investor cashing out profits, managing international transactions, or building a global investment portfolio, understanding how to convert currency in PayPal efficiently can save you hundreds of dollars annually.

Here’s the reality: PayPal’s default currency conversion can cost you up to 4% in hidden fees. But with the right strategies, you can dramatically reduce these costs and keep more money in your investment accounts.

What is PayPal Currency Conversion and Why Should You Care?

PayPal receives a wholesale rate quote from our bank twice a day and we add a percentage fee to determine the retail foreign exchange rate for currency conversions. This means every time you convert currencies through PayPal, you’re paying above the real market rate.

For crypto investors and online entrepreneurs, this can add up quickly. Imagine losing $40 on every $1,000 international transaction simply because you didn’t know the right conversion strategy.

PayPal supports currency conversion in over 24 currencies across 200+ countries, making it a popular choice for international investors. However, the convenience comes at a price that many users don’t realize they’re paying.

Step-by-Step Guide: How to Convert Currency in PayPal

Method 1: Manual Currency Conversion in Your Wallet

The most straightforward way to convert currency in PayPal is through your wallet:

Log in to your PayPal account and navigate to your Wallet
Locate the currency you want to convert from your available balances
Select More icon beside the currency you want to convert and click Convert currency
Choose your target currency from the dropdown menu
Enter the amount you want to convert – PayPal will display their conversion rate
Review the conversion details including fees and final amount
Click Convert Now

Method 2: Converting Currency During Payment

When making international payments, you have options:

When you make a payment using your card, you can choose to use your card issuer’s conversion rate. If you choose to use your card issuer’s rate, you won’t know the conversion rate right away.

This method often provides better rates than PayPal’s conversion, especially if you have a premium credit card with competitive foreign exchange rates.

How to Check PayPal Currency Conversion Rates

Before converting, always check the current rates:

Go to your PayPal Wallet
Click on “Currency Calculator”
Select currencies, and see the rate with a small fee added
Compare with mid-market rates from Google or XE.com

Pro Tip: PayPal’s exchange rates are on the higher side, especially when you consider the other transfer fees you may need to pay

Understanding PayPal Currency Conversion Fees

PayPal charges different fees depending on how you convert currency:

Balance Transfer Conversion: 2.5% markup on wholesale exchange rates Payment Conversion: 3-4% markup depending on funding source International Transfer Fees: Additional 5% for bank transfers, 7.9% for card transfers

Real-World Example: Sarah, a crypto trader from Germany, regularly converts her Bitcoin profits from USD to EUR. Using PayPal’s standard conversion, she was losing $150 per month on a $5,000 conversion. After switching to the strategies below, she now saves over $1,800 annually.

How to Avoid PayPal Currency Conversion Fees

Strategy 1: Use Your Card Issuer’s Rate

When making payments, always select “Convert with card issuer” instead of PayPal’s conversion. Most major credit cards offer better exchange rates than PayPal.

Strategy 2: Multi-Currency Account Setup

Add multiple currencies to your PayPal account:

Go to Wallet
Click Add a currency
Select the currency you want and click Add a currency

This allows you to hold different currencies without immediate conversion, giving you flexibility to convert when rates are favorable.

Strategy 3: The Revolut Method

Many experienced investors use this approach:

Open a Revolut multi-currency account
Link it to your PayPal as a transfer destination
Transfer at PayPal’s 1% instant transfer fee (capped at $10)
Get near mid-market rates through Revolut

This method can save you 2-3% on large conversions.

When Does PayPal Convert Currency Automatically?

PayPal automatically converts currency in two situations:

When you pay for goods or services in a foreign currency
When you transfer funds from your balance to your bank account

You can disable automatic conversion by:

Going to your Payment Preferences
Selecting “Set Available Funding Sources”
Choosing manual conversion options

Best Practices for How to Convert Currency in PayPal

For Crypto Investors

Time your conversions: Monitor exchange rates and convert during favorable market conditions. Cryptocurrency profits often come in USD, so having a strategy for USD-to-local currency conversion is crucial.

Use balance transfers when possible: Converting existing PayPal balance costs less than payment conversions.

For International Business

Set up multiple currency accounts: This gives you flexibility and reduces forced conversions.

Consider payment timing: If you’re expecting payments in specific currencies, time your conversions strategically.

Common Mistakes to Avoid

Mistake 1: Accepting automatic conversion without checking alternatives Mistake 2: Not comparing PayPal rates with your bank’s rates Mistake 3: Converting small amounts frequently instead of larger amounts less often

Managing Multiple Currencies in Your PayPal Wallet

You can effectively manage up to 24 different currencies in your PayPal account:

To make a currency primary: Select the more option beside the currency you want to make primary and click Make Primary

To close a currency: Select the more option beside the currency you want to close and click Close Currency

If you receive a payment in a different currency, it’s automatically accepted in the currency received, and a new currency balance is opened in your PayPal account.

Frequently Asked Questions About PayPal Currency Conversion

Can I convert currency in PayPal for free?

No, PayPal always charges a fee for currency conversion. However, you can minimize these fees by using your card issuer’s rates or third-party services like Revolut.

What is the cheapest way to convert currency in PayPal?

The cheapest method is typically using your credit card’s conversion rate instead of PayPal’s, or using the Revolut method for larger amounts.

How long does PayPal currency conversion take?

Manual conversions in your wallet are instant. Payment conversions happen in real-time during the transaction.

Does PayPal automatically convert currency?

Yes, PayPal automatically converts currency during payments and bank transfers unless you specifically choose alternative options.

What currencies can I convert in PayPal?

PayPal supports conversion between 24 major currencies including USD, EUR, GBP, JPY, CAD, AUD, and many others.

Can I see PayPal conversion rates before converting?

Yes, use the Currency Calculator in your Wallet to preview rates before committing to any conversion.

Conclusion: Take Control of Your Currency Conversions

Understanding how to convert currency in PayPal effectively is essential for anyone engaged in international investing, crypto trading, or online business. By implementing these strategies, you can save significant money on conversion fees and keep more funds available for your investment goals.

Remember, every percentage point you save on currency conversion is money that can go toward building your wealth. Start by checking your current PayPal conversion settings and implementing at least one of the cost-saving strategies mentioned above.

Ready to optimize your international transfers? Review your PayPal currency settings today and share your own money-saving tips in the comments below.

Looking to expand your financial knowledge? Check out our guides on [cryptocurrency investment strategies] and [international banking for investors] to maximize your global financial opportunities.

How to Convert Currency in PayPal: The Smart Investor’s Complete Guide to Maximizing Your International Transfers