For the past decade ecommerce has continued to increase in popularity for businesses and individuals, enabling everybody to have access to a global market.

As you are probably aware, EBay is by a long way the most popular online marketplace, and since its creation in 1995 eBay has both streamlined and globalized traditional person-to-person trading, which has traditionally been conducted through such forms as garage sales, collectibles shows, flea markets etc.

One factor which a lot of people are not aware of is the cost of currency exchange when selling big ticket items or multiple items to buyers within foreign countries.

The standard procedure is to use PayPal for the exchange of currencies, which is extremely uncompetitive. Below is a brief synopsis;  “PayPal is an e-commerce business allowing payments and money transfers to be made through the Internet.”  (Wikipedia)

PayPal can be a very useful tool when selling items on eBay for ease of use and security but, for a lot of people, the charges involved compared to other methods of international trade seem very high.

The disadvantages of using PayPal are two fold

1: You get charged a fee and a percentage to receive the funds

2: You receive a very poor rate of exchange.

One or both of these disadvantages can be avoided with very little effort with substantial rewards.

1: PayPal charge a fee and a percentage of funds received into an account.

Please see below the cost associated with receiving funds into PayPal

Fees for receiving payments from buyers outside your country

UK Monthly sales	Price per transaction
£0.00 GBP – £1,500.00 GBP	3.9% + £0.20 GBP
£1,500.01 GBP – £6,000.00 GBP	3.4% + £0.20 GBP
£6,000.01 GBP – £15,000.00 GBP	2.9% + £0.20 GBP
£15,000.01 GBP – £55,000.00 GBP	2.4% + £0.20 GBP
above £55,000.00 GBP	1.9% + £0.20 GBP

US Monthly sales	Price per transaction
0.00 USD – $3,000.00 USD	3.9% + $0.30 USD
$3,000.01 USD – $10,000.00 USD	3.5% + $0.30 USD
$10,000.01 USD – $100,000.00 USD	3.2% + $0.30 USD
> $100,000.00 USD	2.9% + $0.30 USD

As you can see, the fees for receiving payments in from buyers outside the country start at 3.9%.

There are already a number of websites that calculate and highlight the amounts that you actually receive when someone send you moneys through PayPal

For example http://thefeecalculator.com

2: Converting Currencies with PayPal

When transferring money with PayPal you are given an exchange rate which is very uncompetitive. As PayPal do not use the live exchange rates, they get their exchange rate from two wholesale quotes throughout the day and adding 2.5% on top.

The fact that the rate is not live is an initial cause of concern as it does not allow for the market movements and could be off by as much as 2%. While the main cause of concern is that on large transactions you are getting charged a whopping 2.5%.

If you were to use a foreign currency specialist for your currency transaction you are more likely to get between 0.5% / 1%, instantly saving 1.5 / 2%.

Potential options

1: Opt to receive funds by a wire transfer

If you are selling high value or multiple items on eBay and you a) receive your funds via PayPal or b) receive funds by wire transfer it is easy to make considerable savings on the costs incurred for receiving payment.

a) If you normally receive your funds via PayPal, you would be charged the PayPal receiving fees while the buyer would also get a very poor rate of exchange.

If you chose not to use PayPal and use a foreign exchange specialist for the currency transaction, you could save up to 3.9% and the buyer would also save between 1.5% / 2% of the total amount of the item.

This is achieved once the listing is completed and the amount is confirmed, you would refer the buyer to OmnisFX who would carry out the currency transaction. OmnisFX would then obtain the preferential exchange rate by using its expertise and competitive spreads to exchange the currency and send the exchanged funds to your bank account.  Also as you would be recommending a client to OmnisFX you would receive a percentage of any profit made.

This option enables you to save the buyer money while also saving money on PayPal fees AND receiving commission for the referred transaction.

For example

You are selling a boat worth £100,000.00 to someone in America and the current interbank rate of exchange for selling USD into GBP is 1.6300.

Using PayPal the buyer would receive a rate of 1.6707, costing $167,075.00.

While you the seller would be charged up to £3,900 by PayPal for receiving the funds.

If you referred the buyer to OmnisFX for this process the buyer would receive an exchange rate of 1.6381 costing $163,810.00, and therefore saving $3,265.

And as there would be no PayPal receiving fees you would also save £3,900.

OmnisFX would make £500 on the transaction, of which 20% (£100) would go to the seller for commission for refereeing the client.

In conclusion, you the seller would save up to £4,000 while the buyer of the boat would save $3,265.00.

b) If you already opt to receive the funds for the sale of your items by a wire transfer, it is still possible to make considerable savings compared to the buyer using a standard bank.

By referring the buyer to OmnisFX it would enable them to save considerable amounts of money on the currency exchange while you the seller would receive a percentage of any profit made as well as having more knowledge of the transaction process, which alone has its benefits.

For example you are again selling a boat for £100,000.00 on eBay and it is bought by someone in America.  You instruct the buyer to exchange their monies through OmnisFX as they will save 0.5% plus compared to using their bank. This should add value to your customer as they should be happy that they will be saving money.

The buyer of the boat would then get in contact with OmnisFX and instruct the transfer of £100,000.00 to you the seller; OmnisFX would then advise the buyer about the best strategy for their currency transaction and in the process will  save over 0.5% of the amount transaction.

OmnisFX would make at least £500 profit on the transaction and would pay £100 (20%) to yourself for commission

In conclusion it is a very similar to the current process but the buyer would save money (over £500 worth of Dollars), and you would receive an extra £100 for referring the client to us, while also having more knowledge of the transaction timing.

2: Use PayPal to receive funds but use a foreign currency specialist to exchange the currency

This option enables you to benefit from the advantages of PayPal (consumer confidence) while saving 2% on the currency exchanges.

This is done by receiving the funds into your PayPal account in the foreign currency (which can be set up by adding different currency to your PayPal account), then transfer the foreign currency to a corresponding bank account in your own name (which is free) and then exchanging the funds with a foreign currency specialist like OmnisFX. .

For example you sell an item on eBay for £100,000 to a foreign buyer; you receive £98,099.80 worth of dollars into your PayPal account.

You deposit the Dollars into your own dollar bank account and exchange them with OmnisFX.  As PayPal charge 2.5% for all currency transfers and OmnisFX would charge 0.5% you instantly save 2% £1,961.996 or over of the amount exchanged.