Internet Marketing Trip

Today was a day of a new record for the euro/usd rate : 1.5144 ! 2 days ago it was still at 1.47xx. I needed to transfer my PayPal balance to my bank account but… well here is the story.

You may don’t understand the figurre about the exchange rate, let’s make it a bit easier : currently, 1 euro = $1.51. So if you are a US citizen and wanted to travel to Europe and needs euros, you would have to buy them with your dollars. You would need $1.51 for 1 euro, or $151 for 100 euros.

In the other direction, if I want to go to the USA and need to buy dollar, the rate is $1 = 0.66 euro.

Back in 2002 when the euro was just born the equation was 1 euro = $1. So we wouldn’t really care about conversion. Today things are very different.

There is a positive point of view, if I want to buy something from USA, being a European, I would pay less than the actual cost. For example, if you need a hosting plan for your websites and choose the Swamp plan at HostGator, you would pay $12.95 a month. In euro with the 0.66 rate, you would just pay 8.54 euro a month.

If you bought that plan in 2002 (I don’t know if it existed at that time but, this is for the example), it would be 12.95 euro, so about 3.40 euro more per month.

Okay you understand now the currency rate changes influence our purchase, how much or how less we spend, but it also influence what we earn.

I earned some nice commissions and had more than $3000 (about 2000 euros) on my PayPal account. Since most of the affiliate networks I am working with are paying in USD, I have an USD bank account, here in France. So I can put all my USD commissions on this account, and then wait that the exchange rate to become better.

Remember $1 is currently 0.66 euro, let’s say suddenly  the rate jumps to 0.80 (yeah that would be very nice), I would have these $3000 = 2400 euros. I would have “earned” 400 euros without doing anything, just waiting. An if we were in 2002, then $3000 would already be 3000 euros !

Well that could happen if PayPal allowed me to transfer USD to France. You see, for PayPal, if you live in Europe, you can only receive euros. If I choose to transfer the USD, the conversion to euro is automatic, so I can only receive the funds at the current rate in my local currency.

Hopefully, some other networks pay by check or bank wire, and that’s okay for them if I provide them the right account number.

I could also wait that the exchange rate becomes higher and keep the funds on my PayPal account. Well, how long would I have to wait ? Hey I need to live too !

What’s a bit ironic is that you can open multiple balance at PayPal to receive payments in the currency you want. But in the end, when you want to transfer your funds to your bank account, you are forced to have it in your local currency.

This is not really cool from PayPal, if they send you funds coming from USA, UK, Japan, well any currency, they have these funds on their account somewhere, in the right currency, they would just have to process the transfer as they usually do, since they ask for your bank account informations.

Also, I mailed themseveral times to explain and ask for the situation, they just don’t want and say they can’t do it. What’s wrong is they automatically do the conversion, if you could choose to have no conversion made at the time of the transfer from your PayPal account that would be cool.