Do you often pay via PayPal and want to be sure that you are not overpaying 1-2% of the payment amount? Then look under the cat. Experienced PayPal users may not be interested in this, but who knows...
Mysterious events have been happening on lately...
This article was already published on Habré in the sandbox, but after iwait it mysteriously disappeared from the sandbox and did not end up in either the “published” or “drafts”. Therefore, if it is found, let me know, I will delete it double.
Recently, articles about PayPal have been appearing with enviable regularity. Only the lazy don’t write about it, someone is waiting (has been waiting) for the opportunity to accept payments, someone just uses it regularly and is in a hurry to share the news.
Of the entire mass of users, at least Russian ones, the overwhelming majority still make payments through PayPal rather than accept them. The note is primarily aimed at those who regularly (or not so regularly) make purchases on the Internet, paying for them via PayPal, but who have not carefully studied all the intricacies and documentation on the site. For some of them, I hope this article will be useful.
I periodically use PayPal (I have a card linked to my account) to pay for various purchases in foreign stores (Europe, China, a little less the USA, etc.), and I also regularly pay for hosting services. I've been using it for over 5 years. And I started ordering online about 8 years ago. Those. I have some experience. And he considered himself to be a user quite literate in these matters. However, “even an old woman can be found” is an unexplored topic.
It turned out that having a Russian bank card, linking it to a PayPal account, and paying for purchases for the last 2 years, I regularly lost some interest.
The point is who makes the conversion of money for the purchase.
Naturally, the invoice issued by a foreign store will be in foreign currency. Let's take for example my host in the USA, which regularly issues invoices in USD.
If your card account is in the currency of the invoice, in this case in US dollars, then there are no tricks here. You have been billed for $10 - if you pay $10 from your card, it will be debited. Here it’s up to you to decide where to save: by exchanging your tugriks for dollars and then pushing them into an ATM to top up your card, or at a bank branch when topping up immediately with conversion.
If your card account is in rubles or differs from the currency of the account for payment (for example, the account is in USD, but on the card it is Euro), then when paying there will be a conversion process that is not under your control. This situation exactly describes my version.
How does the conversion process take place here and at what rate will it be made? Let's figure it out. The whole process of writing off money on your fingers is approximately the following (guru, correct me in terms, if anything): after you have agreed to pay the bill, the seller, or rather his acquiring bank (the bank through which the seller works with plastic cards, further in the text processing center) requests your issuing bank (the one that issued the card) about the availability of the required amount in your account, and if the required amount is available, the account is debited, and the seller receives a notification that the payment has been made. Those. This chain consists of three links. Seller (account) –> PC (processing center) –> BE (issuing bank).
As a rule (this is true for most foreign online stores), the invoice amount is transferred to the PC unchanged, i.e. in the currency of the invoice you are going to pay. The PC contacts the BE and, having determined that your card account is different from the bill being paid, converts the amount at its own rate and requests from your bank the amount in the currency of your account. Those. You don’t know exactly how many rubles will be withdrawn from your account as a result until you receive a statement of the completed payment from your bank.
However, PayPal payments are slightly different from this scheme. PayPal (hereinafter referred to as PP) offers to “take care” of the user (this service is enabled by default) and converts the invoice amount into the currency of your account itself. Thus, you immediately see on the screen that XXX rubles will be debited from your card at the YYY rate. And this, I must say, gives confidence. No worries about the amount of future write-offs, you can pay with confidence. We check the exchange rate, compare it with the local one, and believe that the difference is within the limits. We pay.
This is where a simple user (in my person), accustomed to comfort, overpays this unfortunate 1-2%, because... the PP rate turned out to be higher than the processing center rate. Yes, you have to pay for comfort...
I would like to note right away that the indicated amounts of 1-2% are valid only for my case and probably depend on the specific banks participating in the payment chain.
There are several options.
The first and main one is to disable the conversion to PP.
The second, which will most likely allow you to save additional money, is to have a card account in the currency in which the online store will issue invoices. In this case, the payment chain will be without conversion, and the conversion of money will be entirely on your conscience, be it intra-bank conversion when replenishing or transferring from account to account, or third-party exchange and depositing currency into the account.
Let's consolidate the theoretical material with practice.
Disable conversion to PayPal. Anyone can do this easily.
When making a payment, the PP honestly warns what the exchange rate is and offers to take advantage of this, but also offers to select conversion options (using the example of an invoice in Euro):
Clicks “conversion options” and select “I ask you to issue me invoices in the seller’s currency”:
the PP will remember your choice, and for subsequent payments for the current card, the option you have chosen will be set by default.
Change the currency of the card account (this trick will not be available to everyone). Some banks issue cards strictly tied to one account. Thus, you select a currency when ordering a card and subsequently cannot change the account (as far as I understand, this is the most common situation).
However, there are banks that allow you to open several accounts and link the card to the one you need. In this case, you can go to your bank and link the card to an account in the desired currency.
But technology does not stand still, and now there are banks that, when ordering cards, open several accounts in different currencies at once. (Just my case.) Which allows you to link to the desired account with a simple call to the bank. And recently, this service is available in Internet banking, and you can even do without calls.
I do not provide screenshots of this process, because... firstly, it will be advertising, and secondly, for each specific bank they will be different.
Leaving aside the topic of online payments, it should be noted that this service is very useful for frequent trips abroad. When traveling abroad, you link the card to the account in the currency of which you will pay during the trip. The savings are not big, but they save a pretty penny.
Pay more attention to detail, test different options, don't let habit and comfort relax you, count your money, have the right bank.
P.S. I hope both you and I didn’t waste our time.
UPD: moved to a more relevant blog “Payment systems”.
Mysterious events have been happening on lately...
This article was already published on Habré in the sandbox, but after iwait it mysteriously disappeared from the sandbox and did not end up in either the “published” or “drafts”. Therefore, if it is found, let me know, I will delete it double.
Recently, articles about PayPal have been appearing with enviable regularity. Only the lazy don’t write about it, someone is waiting (has been waiting) for the opportunity to accept payments, someone just uses it regularly and is in a hurry to share the news.
Of the entire mass of users, at least Russian ones, the overwhelming majority still make payments through PayPal rather than accept them. The note is primarily aimed at those who regularly (or not so regularly) make purchases on the Internet, paying for them via PayPal, but who have not carefully studied all the intricacies and documentation on the site. For some of them, I hope this article will be useful.
Background
I periodically use PayPal (I have a card linked to my account) to pay for various purchases in foreign stores (Europe, China, a little less the USA, etc.), and I also regularly pay for hosting services. I've been using it for over 5 years. And I started ordering online about 8 years ago. Those. I have some experience. And he considered himself to be a user quite literate in these matters. However, “even an old woman can be found” is an unexplored topic.
It turned out that having a Russian bank card, linking it to a PayPal account, and paying for purchases for the last 2 years, I regularly lost some interest.
The essence
The point is who makes the conversion of money for the purchase.
Naturally, the invoice issued by a foreign store will be in foreign currency. Let's take for example my host in the USA, which regularly issues invoices in USD.
If your card account is in the currency of the invoice, in this case in US dollars, then there are no tricks here. You have been billed for $10 - if you pay $10 from your card, it will be debited. Here it’s up to you to decide where to save: by exchanging your tugriks for dollars and then pushing them into an ATM to top up your card, or at a bank branch when topping up immediately with conversion.
If your card account is in rubles or differs from the currency of the account for payment (for example, the account is in USD, but on the card it is Euro), then when paying there will be a conversion process that is not under your control. This situation exactly describes my version.
Theory
How does the conversion process take place here and at what rate will it be made? Let's figure it out. The whole process of writing off money on your fingers is approximately the following (guru, correct me in terms, if anything): after you have agreed to pay the bill, the seller, or rather his acquiring bank (the bank through which the seller works with plastic cards, further in the text processing center) requests your issuing bank (the one that issued the card) about the availability of the required amount in your account, and if the required amount is available, the account is debited, and the seller receives a notification that the payment has been made. Those. This chain consists of three links. Seller (account) –> PC (processing center) –> BE (issuing bank).
Let's look in more detail
As a rule (this is true for most foreign online stores), the invoice amount is transferred to the PC unchanged, i.e. in the currency of the invoice you are going to pay. The PC contacts the BE and, having determined that your card account is different from the bill being paid, converts the amount at its own rate and requests from your bank the amount in the currency of your account. Those. You don’t know exactly how many rubles will be withdrawn from your account as a result until you receive a statement of the completed payment from your bank.
However, PayPal payments are slightly different from this scheme. PayPal (hereinafter referred to as PP) offers to “take care” of the user (this service is enabled by default) and converts the invoice amount into the currency of your account itself. Thus, you immediately see on the screen that XXX rubles will be debited from your card at the YYY rate. And this, I must say, gives confidence. No worries about the amount of future write-offs, you can pay with confidence. We check the exchange rate, compare it with the local one, and believe that the difference is within the limits. We pay.
This is where a simple user (in my person), accustomed to comfort, overpays this unfortunate 1-2%, because... the PP rate turned out to be higher than the processing center rate. Yes, you have to pay for comfort...
I would like to note right away that the indicated amounts of 1-2% are valid only for my case and probably depend on the specific banks participating in the payment chain.
How to avoid overpayment
There are several options.
The first and main one is to disable the conversion to PP.
The second, which will most likely allow you to save additional money, is to have a card account in the currency in which the online store will issue invoices. In this case, the payment chain will be without conversion, and the conversion of money will be entirely on your conscience, be it intra-bank conversion when replenishing or transferring from account to account, or third-party exchange and depositing currency into the account.
Practice
Let's consolidate the theoretical material with practice.
Disable conversion to PayPal. Anyone can do this easily.
When making a payment, the PP honestly warns what the exchange rate is and offers to take advantage of this, but also offers to select conversion options (using the example of an invoice in Euro):
Clicks “conversion options” and select “I ask you to issue me invoices in the seller’s currency”:
the PP will remember your choice, and for subsequent payments for the current card, the option you have chosen will be set by default.
Change the currency of the card account (this trick will not be available to everyone). Some banks issue cards strictly tied to one account. Thus, you select a currency when ordering a card and subsequently cannot change the account (as far as I understand, this is the most common situation).
However, there are banks that allow you to open several accounts and link the card to the one you need. In this case, you can go to your bank and link the card to an account in the desired currency.
But technology does not stand still, and now there are banks that, when ordering cards, open several accounts in different currencies at once. (Just my case.) Which allows you to link to the desired account with a simple call to the bank. And recently, this service is available in Internet banking, and you can even do without calls.
I do not provide screenshots of this process, because... firstly, it will be advertising, and secondly, for each specific bank they will be different.
Leaving aside the topic of online payments, it should be noted that this service is very useful for frequent trips abroad. When traveling abroad, you link the card to the account in the currency of which you will pay during the trip. The savings are not big, but they save a pretty penny.
Conclusions from KO
Pay more attention to detail, test different options, don't let habit and comfort relax you, count your money, have the right bank.
P.S. I hope both you and I didn’t waste our time.
UPD: moved to a more relevant blog “Payment systems”.
