How To Get Rid of Paypal (or Stripe) Currency Conversion Fees

Operating as a Spanish business internationally, I soon realized about one of the most annoying fees that apart of taxes, were the financial expenses attached to every transaction of money coming in or out of our accounts.

When the business started to grow, we found ourselves paying four to five figures monthly fees for financial expenses, to payment intermediaries that set abusive costs only because we were working in markets with a different currency or location than ours.

The typical financial expenses you will find across your online marketing money flow are:

  • Payment cards currency fees (hidden inside the applied conversion rate)
  • Payments currency fees in Paypal (hidden inside the conversion rate)
  • Affiliate networks payment processor fees (transfer and currency conversion can apply)
  • Payment gateway transaction fees
  • Payment gateway currency conversion (usually hidden inside the conversion rate)
  • Bank account currency conversion

These expenses can sum a total between 7% and 10% of your transactions when not optimized properly, so cutting them can have a significant impact even if you are starting with online marketing and need to bring your campaigns to positive ROIs.

Paypal Fees

Paypal is one of the most popular payment processors around the world, it has an easy integration with most of the ecommerce platforms out there and customers trust the brand and their buyer protection services. However, this position is often abused by Paypal charging very high fees in different steps of your money flow.

Here is a visual representation of the Paypal fees problem:


The first hit represents in this example almost 5% of the received amount.

The second hit comes when you try to take the money out of Paypal into your bank account with a different currency.


In this example, the market currency conversion rate was at 0,908 EUR , while the exchange rate they are applying is over 3% under the market rate. Keep in mind this also happens when making payments from Paypal in a certain currency which you don’t have in your Paypal balance. They will withdraw the money from your bank at their currency conversion rate.

Together with the previous fee we sum a total of 8% over our receivables.

While the transaction fee is something that can be negotiated over time and Paypal has discounted rates for businesses that grow over a certain volume of transactions, the currency exchange rate is something that will remain after you grow.

The Solution

While it was easy to switch most of our clients to a different payment method, regardless of the method we chose we could never get rid of the currency exchange fees, they were present in Paypal, Stripe, in our business bank account.

For a time we thought about opening a bank account in different currencies, but the maintenance fees our local bank was offering didn’t improve much the situation.

After some research, I found several FX service providers, companies that will take your dollars, yuan, or any other currency and buy them with a payment in your local currency and your local bank, usually within the same day they get the foreign currency and at a fee much lower than any bank or payment gateway.

A Cheaper Way to Receive Our Payments: Kantox

kantox-forex-feesWe use Kantox to receive our affiliate commission payments without having the affiliate network or their payment processor make the currency conversion to our local Euro currency.

This solution has reduced our transaction fees and currency conversion fees to a 0.29% of the received amount, which translates into thousands of dollars that now we can spend in other business lines. Plus they issue an invoice for their fees, transferring you the exact market rate local currency which makes things much easier for accounting.

Operationally Kantox requires a bit of financial planning, since you must use their platform to book a transaction each time you are expecting to receive foreign currency funds, specifying the amount and the currency you will receive, together with the top date funds should arrive. They will send you then the instructions for you to provide to your client or affiliate network in order to transfer the funds to their account and complete the trade.

The money hits your account in your local currency most of the times within the same day they receive the funds in the original currency and their fees are billed by the end of the month.

Get a free consultation from Kantox on how their services can benefit your business here.

A Cheaper Way to Withdraw Our Paypal Balance: World First


World First is also a Foreign Exchange service provider that can offer you a better value for your foreign currency, but they offer a very interesting e-commerce solution that simplifies operations when working with international payment gateways.

When becoming a World First customer, they provide you with an agent bank account under your name, which will be used exclusively for their operations. In our case, we received a U.S. Citibank checking account, which we registered in both our Paypal and Stripe profiles.

Since the account is in USD, now we are able to withdraw to it our USD balance from Paypal or Stripe, at zero cost.

Once the funds arrive in our Citibank account, you can set up your profile with World First so that they transfer automatically the corresponding amount of local currency to your local bank account, you can also leave the funds in your foreign currency account waiting for a better exchange rate.

You can negotiate the transaction fees with World First, depending on your volume, but in any case their offer will be much cheaper than your usual Paypal or Stripe forex fees.

Use the coupon code Todor20 when signing up for World First and you will get £20 off your first international money transfer over £1000. (Check their terms here).

Wrapping it Up

Hopefully now you have a better idea on where you can optimize your current expenses and lower your currency conversion costs.

Just to be sure, here are the main points I covered in this article:

  • Financial institutions and payment processors set their own currency conversion rates when you receive or pay on a different currency than your local one.
  • You can end up losing over 4% of your money compared to the market conversion rate.
  • You will reduce your currency conversion costs to 0.29% when receiving big payments from affiliate networks or clients by using the services of Kantox.
  • For receiving multiple customer payments from your e-commerce store in a different currency, create an e-commerce foreign bank account with World First. This will reduce your foreign exchange costs and improve your operations.

Now it’s your turn!

How much money did you save optimizing your currency conversion fees?

What kind of currencies and markets you operate with?

Let me know in the comments.


  1. Daniel March 20, 2017
    • Todor March 23, 2017
  2. alberto August 22, 2017
    • Todor September 9, 2017
  3. Eduardo May 18, 2018
    • Todor May 18, 2018
      • Eduardo May 18, 2018
        • Todor October 7, 2018
  4. Tamas July 5, 2018
    • Todor October 7, 2018
  5. Stefano September 2, 2018
    • Todor October 7, 2018
      • Saverio April 19, 2019
        • Todor April 19, 2019
          • Saverio April 20, 2019
          • Todor April 20, 2019
  6. Khan February 22, 2020
  7. Halfdan Hansen March 20, 2021
    • Todor June 28, 2022

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