Finance, Forex and Investments

Why isnt paypal converting money at the current exchange rate?

I just paid for something using paypal, im in Canada, and on paypals exchange rate they're saying the candian dollar is at 95 cents. Its trading right now for 101.17 and hasnt been at 95 cents for a while, why isnt paypal current?

Public Comments

1. I think they are always a few days behind, in their favor.
2. Could be a combination of things. A big part of it is this (from Paypal's site): If your transaction involves a currency conversion, it will be completed at a retail foreign exchange rate determined by PayPal, which is adjusted regularly based on market conditions. This exchange rate includes a 2.5% spread above the wholesale exchange rate at which PayPal obtains foreign currency, and the spread is retained by PayPal. The specific exchange rate that applies to your multiple currency transaction will be displayed at the time of the transaction. So that's part of it. They could also be using a different source for their exchange rates, which sometimes vary. Note that they are using the wholesale rates, which can differ from the retail exchange rates. Bottom line, they can charge whatever they want, so long as it's disclosed. But that is a bit of a large spread you're seeing, harder to explain.
3. So they can make a commission?