This article is for Canadians who get paid in USD on PayPal, and want to transfer their money to their Canadian CAD bank, while avoiding PayPal’s high currency conversion fees.
I was in this situation, and it took me over a year to figure out a solution that works efficiently. PayPal’s currency conversion fees are about 4% (in addition to international transaction fees, which I’ve found to also be about 4%). This solution only has a fee of about 0.7%, so you save about 3.3%. So, for example, on $50,000 income, you’ll earn an extra about $1650 that otherwise would be paid in fees. Not bad.
Wise + PayPal
The solution is to use Wise as an intermediate account. Wise is an international money account which supports a large range of currencies, and has low transfer fees and currency conversion fees. In particular, they just have a low transfer fee, and their currency conversion rates are essentially identical to the rates you’ll find on Google. Overall, here’s how it works:
- First, continue to receive your money through PayPal.
- Then, transfer your USD from PayPal to Wise.
- Finally, convert and transfer your USD to CAD using Wise, to your bank account.
How to Get Set Up
Then, to actually get all of this set up:
- Create a Wise account.
- Link your Wise account with your PayPal (so you can send from PayPal to Wise).
- Link your Wise account with your bank account (so you can send from Wise to your bank).
First, you’ll need a Wise account. You have to sign up for an account, fill out some forms, and later pay a small one-time fee to get it set up. At the time when I set up an account, I had to pay $42 CAD. You can use this link to join, which will give you your first transfer free (no fees). It’s a referral link, so it also supports me. Thanks!
To link with PayPal, your Wise money account will have bank account details that you can input into PayPal. Then, PayPal will send micro-deposits to your Wise account in order to verify your account (just like any other bank account verification).
To link with your bank account, when you’re sending money on Wise, it will prompt you to add the details of the (CAD) account you’re trying to send to, and this is where you can fill in your bank account details.
That’s it! Now, you can send money from PayPal to Wise, and then to your bank!