This was a question I’ve been very curious to know ever since Paypal allowed direct withdrawals to local banks and via credit card. This week-end, my CC bills arrived so I’m able to compute the going exchange rates for both withdrawal methods.
I made two 500-dollar withdrawals direct to my HSBC credit card on January 24 and February 12, 2008. The bank exchange rates for those dates are Php41.16 and Php40.77, respectively. The exchange rate that appeared on my CC bill were Php40.42 and Php39.88, respectively. That’s an average of Php0.815 difference for the two transactions.
Note: When withdrawing Paypal funds to a credit card, it will not appear as Paypal Withdrawal in the merchant description as Paypal says it should. Instead, you will see your complete name with ID Code 4029357733 coming from country code LU (Luxemburg).
So, we can now compare both transactions via direct bank deposit or credit card:
Paypal to Bank Deposit: Php0.90 difference + Php200 (Bank Remittance Fee*)
Paypal to Credit Card: Php0.815 difference + $5 (Paypal Withdrawal Fee)
My guess is that the difference in the exchange rates between the bank and the credit card companies are mostly attributed to the fact that they are separate banking entities. Another test to the same bank and credit card company will prove this.
In essence, the only valid comparison between the two is the Paypal Fee and the Bank Remittance Fee which is almost the same amount also. Looks like there’s no significant difference between the two after all (unless you’re withdrawing thousands of dollars at a time).
On a related note, the lower exchange rates and additional banks fees doesn’t really make a big difference when receiving funds via Xoom, as I previously outlined before here.
*The bank remittance fee seems variable and depends on your bank. However, various feedback pegs the amount to Php200, at least for BDO, BPI, Chinabank and Metrobank.
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Palagay ko, mas ok yung sa bank, kasi CASH na talaga yun eh.
Sabagay, kung malakas kang gumamit ng credit card, bawas naman diretso sa utang =)
Visit pala my site, http://paymanila.com. You might find it useful re PayPal usage in Manila. We offer some services in relation to PayPal po.
Thanks!
I’m an accounting student. Kasi po magkaiba po ang date ng ginawa ung transaction at yung date na gumawa ng journal entries. Sa accounting po kasi, we record the amount po ang amount sa exchange rate kung kailan gumawa ng journal entry sa company’s book or bank’s book. We do not record it sa exchange rate na nangyari yung transaction.
Hello, can anyone tell me how to exchange apaypal to western union?
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Guys or anyone ?! Naghahanap me ng mabait na nilalang na pwedeng magbigay skin ng paypal money, huhulugan ko nlang yung bank account nyo ng peso in exchange you will add fund for my paypal account. Wala kc akong creditcard eh…anyone??? email me emobevs@yahoo.com
@L.A. You’ll have to use your card first for a Visa purchase before you finally get to enroll it as a credit/debit card. In my case, I was able to enroll my Unionbank EON account as a bank account but not as a credit/debit card. Only when I was able to pay my web host ($1.50) with my EON account was I able to enroll it as a credit/debit card.
I’m no just waiting for five business days to pass by before I call up Unionbank to get the number and fully validate it on PayPal.
@penny You can get apply for a PayPal account and enroll someone else’s card to it. Another option is getting a new bank account that has international debit power via Visa or Mastercard. So far, China Trust and UnionBank have this feature with both of them riding on Visa Electronic.