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Paypal Exchange Rates: Bank or Credit Card?

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.

Abe is the founder and Editor-in-Chief of YugaTech. You Can follow him on Twitter @abeolandres.

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23 Responses

  1. Withdrawing in Credit card will be better if you are going to use your card to purchase. But if you need cash it would be better to get the payment via Local bank so that you don’t have to pay a cash advance fee when withdrawing your money thru Credit card

  2. Alex says:

    Hi Yuga! I’m recently a victim of the “Limited Account Access” due to a supposed “suspicious activity regarding the receipt or withdrawal of funds.”

    Here’s my story:


    Any tips on how I could get full access back? Or at least get back the amount that I still have in the account which is still of significant amount($XXX.XX).

  3. Andre says:

    so banks are still deducting a fee even if you are sending over PHP 7k?
    I was hoping there would be none of that. Anyway in the end it seems better than Xoom’s rates and fees? Did you check what the Xoom exchange rate was for that day?

  4. Jeric says:


    Unionbank doesn’t.

  5. ia says:

    @Jeric: Unionbank does deduct. All electronic transfers are charged a fee—just talked to a Unionbank person this morning and that’s what she said. In my experience it was 100.00 pesos for the PayPal withdrawal to bank account (plus the 50.00 pesos if you withdraw less than 7,000.00 pesos). Apparently that’s as cheap a fee as you can get.

    The funny thing is, the incoming funds was labeled as “inward remittance via PCHC” (Philippine Clearing House Corporation) and if I didn’t prod the person yesterday to find out if it was actually from PayPal, she would have just repeated her “script” that it was only labeled like that and she didn’t know anything more than that. Why bother calling customer service if they don’t have access to more useful information? Can’t they give more detailed descriptions of their transactions so we aren’t so confused?

    Anyway, I can only wish the exchange rates weren’t so “good”.

  6. yuga says:

    @ Alex – have you contcated them and explained? I think the best way really is to get some proof that you are the real owner of that account. Credit card bills, certificate of residence or even passport should help you verify that.

    Will be meeting with eBay/Paypal people next week and ask them about this as well.

    @ Andre – Xoom exchange rates is around Pgp1.05 difference. Not much different from Paypal’s Php0.90 which makes Xoom a good alternative.

    @ia – been asking Paypal reps why the banks aren’t quite informed about this development. They’re not really that organized.

  7. L.A says:

    Does anyone know how to verify PayPal and EON? I was being denied for some reason even though my EON is fresh from the Bank. Help x_X

  8. Alex says:

    Thanks, Yuga.

    After unloading all pertinent documents, they’ve given me full access to my account and I’ve made my first successful withdrawal.

    But they never refunded me the cost of conversion fees when they reversed my initial withdrawals. Cost me around $32. As we know, $32 converted to peso is already a significant amount.

    Could you mention these to eBay/Paypal people? They need to beef up their understanding of our market. :D

  9. penny says:

    hello! I have this problem. I want to buy something in ebay international but I dont have a credit card to support the paypal requirements. do you know anything or someone who can bid for me in ebay and then Ill just pay him/her thru bank deposit? or any alternative for non-paypal users who really needs paypal for ebay purchase. Please email me. Thank you so much!

  10. @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.

  11. Beverly says:

    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 [email protected]

  12. Beverly says:

    Hey guys !!! I just found this site that offers funding of paypal to anyone who doesnt have a credit/debit card, check the link on my blog, hehehehe….

  13. Steve says:

    Hello, can anyone tell me how to exchange apaypal to western union?

  14. accounting student says:

    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.

  15. Ping says:

    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.


  16. Mark says:

    Hi yuga can help me how to verify my paypal account using BDO bank account.. Any help will be appreciated.

  17. Pinoy: Adding funds to Paypal!
    Nakita ko iyong topic regarding problems on adding funds to paypal account. Wala ako naging problema dito since ebay seller kami sa international site. You can view our listings on the sidebar of this blog. Pero paypal to bank withraw at vice versa could be a problem since medyo mataas rin ang transaction fee. Umaabot ng PHP200! Para sa sellers tulad namin malaki-laki na rin iyon especially kung ang tinitinda mo ay low-cost items, di ba? It also takes days rin para umabot ang pera sa account mo sa bank.Since may negosyo rin ako nagamit ang GCASH.So, para masolusyonan ang mga problema natin may naisip kami.

    Want to add funds to your paypal? We are looking for GCASH/ BDO funds.
    1) Email us: enajpostcards[at]yahoo[dot]com o text sa 09063543374
    with your paypal username o e-mail address.
    2) Pay us through GCASH o BDO.
    3) We will send funds to your account, matapos naming makonpirma ang iyong bayad.

  18. lovehatetragedy says:

    Mr. Yuga.. i need some help please.. can u teach me how to verify my account in paypal using this EON.. and ask ko na rin po yung reply nyo kay 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) paki explaine naman po please.. pasensya na po..

  19. up to now I really don’t know why is there a big difference of exchange rate between paypal and the current exchange rate.

  20. sprout says:

    thanks for the paypal articles.

    it helped he decide not to use paypal yet in the near future.

  21. MasterBB says:

    @lovehatetragedy: well you can always verify your paypal using prepaid credit card or virtual card. You can signup online for free. And there’s also option for non US citizen and how you can get one for you for all no cost. Read up here: http://www.blog4yourmoney.com/2009/07/how-to-verify-paypal-without-credit.html

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