[Question] Using PayPal to pay for imports

[pietpetoors]

I make between 3 and 10 international fund transfers per month to pay for imports.
The bank charges are high and the bank screw me on the spread.
I want to pay smaller amounts via PayPal but the forex lady at FNB said it is against the law to use PayPal for imports.

Does anybody know if this is the truth?
Especially when I import samples it will be much more cost effective and faster than using international fund transfers.

[Dave A]

I want to pay smaller amounts via PayPal but the forex lady at FNB said it is against the law to use PayPal for imports.

Does anybody know if this is the truth?

I certainly don't. But given the obvious vested interest, I'd be inclined to ask the helpful lady at FNB the precise legislation that forms the basis of her statement

My sister-in-law has decided to move a fairly substantial sum from SA to the UK. The local bank with the funds was pretty certain she'd have trouble depositing a Rand cheque in the UK, and were very keen that she had the cheque drawn in Pounds Sterling. A quick check with the forex section of her bank in the UK revealed this wasn't a problem at all, and costs were far lower depositing the Rand cheque in the UK than getting the cheque drawn in Pounds in SA.

Surprised?
Not really.

[pietpetoors]

I just did a test with PayPal. There may be no fees for sending funds, BUT I just saw their spread is about R0.36. They just wanted to charge me R11.58 per dollar and when I checked the rates was on 11.22 to the dollar. Now calculate that on a R26k transaction, besides the fact that they charge the supplier 3.5% fee on the transaction they make an additional R834.12 on the spread.

[Justloadit]

Just be weary about taking the news as the standard rate of exchange. Banks use a different rate, and the rate is different between buying and selling currency. When ever I pay foreign currency the rate is higher than what you find on the web or bank page, and when I receive foreign payments I get less the rate advertised. Along with that, as if they have not made enough money, they still charge you an exorbitant amount for the transaction. So on the whole, I think Paypal may be a better deal.

[pietpetoors]

That difference between what the true rate is and what the bank charge you is called the spread. As far as I could determine FNB must work more or less on a R0.20 spread. So when you send funds via FNB they will charge you R0.20 per dollar more than the current rate. So they charge you a R265.00 transaction fee plus they pocket an additional R0.20 per dollar on the spread. When you receive funds the opposite apply, they give you R0.20 per dollar less than the real rate. R0.20 is just what I saw on one of my transactions when we did a spot check on the currency at the exact time I received the sms that the funds went off my account. It varies from time to time, from client to client and according to the amount you move.

[pietpetoors]

There are many web sites where you can view live data so you do not have to rely on the news to see what the rate is. When the bank phones you to confirm a rate it is always good to have the current rate at hand, gives you more bargaining power.
see

http://www.xe.com/currencycharts/?from=usd&to=zar

I think google's data is also live data, so if you sommer google usd/zar exchange rate you should get the same

[pietpetoors]

Just happened again with FNB, exactly R0.20 per dollar spread.
So on this transaction they make R620 on the spread and then they still have the audacity to charge a R260 service fee.
And this was a small transaction.

[BusFact]

How do you expect them to pay for those fancy office blocks and the misleading advertising where they tell you how friendly and helpful they are ?

[Xplosiv]

As far as I understand Paypal is just another form of payment. So paying through Paypal is not illegal, but not declaring the income or operating outside theReserve Bank's guidelines is.
FNB just trying to fleece you as much as they can.

[Intothedeepbluesea]

Are you using paypal balance to pay for the purchases, ie money you received via Paypal from someone outside of Sa into your paypal account or are you using a Sa credit or debit card that is linked to your Paypal acc to do the purchase?

[Eclipse]

Just happened again with FNB, exactly R0.20 per dollar spread.
So on this transaction they make R620 on the spread and then they still have the audacity to charge a R260 service fee.
And this was a small transaction.

dammed, so expensive...