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  1. #1

    Thumbs down 2Checkout stealing 10% in currency conversion

    I've been using 2checkout for about 7 years, never had big problems with them... until now. A while ago they've added ability to sell and be paid in custom currencies.

    But there is a catch that they didn't mention! You lose 10% of payment to currency conversion.

    I didn't notice it before because I didn't have large enough payments to take notice, but 2 weeks ago I had a rather large payment and did notice that something is wrong.

    Payment: 500 euro
    Money I received a week later: 437 euro

    2Checkout do hold some amount for few months, but in that payment reserve released was $12.5 higher than reserve held, so reserve was not a problem.

    500 euro - 5.5% fee + reserve difference = 482 euro.

    That's 45 euro difference or almost 10% of payment!

    Their explanation? Currency rates change over time. Currency rates do change, but not by 10% over 1 week.

    If you are selling in currencies other than USD, do some math, you might notice that 2checkout are stealing 10% of payments from you too.

  2. #2
    Join Date
    May 2010
    Location
    Planet Earth
    Posts
    1,589
    I am working with them for quite while but never heard anything of such kind. There may be a mistake or misunderstanding too.
    A representative is present here on WHT. You should contact him and I hope that he will help you.
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  3. #3
    Good idea, I will contact 2co person here, because support guy is hopeless. Ticket is 8 messages long so far.

  4. #4
    I have checked older payments, same thing there.

    Payment before that had 4 sales: 25 euro, 200 euro, 75 euro and 100 euro. Total: 400 euro
    Reserve held was $5 higher than reserve released.

    So I should have received: 400 - 5.5% - 5 = 373 euro
    Amount received in bank: 346 euro

  5. #5
    Join Date
    Oct 2007
    Posts
    3,990
    IMHO it is quite normal for them to charge a fee on top of currency conversion. This is also the norm for some other payment providers like PayPal and AlertPay.

  6. #6
    Join Date
    Feb 2005
    Location
    United Kingdom
    Posts
    2,861
    I wrote to them about this issue last week, as I have noticed the following way:
    GBP (customer pay) ==> USD (2CO hold) ==> GBP (2CO send to me)
    the conversion rate is not the same as market exchange and this operation is not transparent enough to me.

    Reply from 2CO:
    Thank you for contacting 2Checkout.com! I apologize for the delay in responding to your inquiry. The orders are converted from British Pounds to US Dollars because we are a US based company. We then release the payments to you in British Pounds. Please let us know if you need any additional assistance.
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  7. #7
    Join Date
    Oct 2011
    Posts
    62
    Quote Originally Posted by CyberAlien View Post
    I've been using 2checkout for about 7 years, never had big problems with them... until now. A while ago they've added ability to sell and be paid in custom currencies.

    But there is a catch that they didn't mention! You lose 10% of payment to currency conversion.

    I didn't notice it before because I didn't have large enough payments to take notice, but 2 weeks ago I had a rather large payment and did notice that something is wrong.

    Payment: 500 euro
    Money I received a week later: 437 euro

    2Checkout do hold some amount for few months, but in that payment reserve released was $12.5 higher than reserve held, so reserve was not a problem.

    500 euro - 5.5% fee + reserve difference = 482 euro.

    That's 45 euro difference or almost 10% of payment!

    Their explanation? Currency rates change over time. Currency rates do change, but not by 10% over 1 week.

    If you are selling in currencies other than USD, do some math, you might notice that 2checkout are stealing 10% of payments from you too.
    For transactions involving currency conversion*we add a percentage to our*wholesale exchange rates*for foreign currency. This charge serves as a protection against the volatility and risk associated with FX markets. The exchange rates are updated on a regular basis throughout the day. If you want us to take a look at your account specifically I would be happy to help you & explain what specific charges were, just email me at aeshelman@2co.com. I apologize for any confusion please let me know if I can do anything else.

  8. #8
    Aha, I see. Thanks for clarifying. So it gets converted at different rates with about 10% difference between rates.

    Subject still stands because 2co advertizes that it can handle multiple currencies, when in fact it converts everything to USD and applies different rates, without informing vendor about it and causing vendor to lose 10% of money due to lack of transparency.

    Time to look for something else and for now use PayPal.
    Last edited by CyberAlien; 02-14-2012 at 04:22 PM.

  9. #9
    Join Date
    Oct 2011
    Posts
    62
    I'm sorry we were unclear with this & I will address the issue of transparency of conversion fees with the appropriate people. Let me know if I can do anything else

  10. #10
    Join Date
    Jun 2005
    Posts
    3,118
    The problem with this is that they donīt allow to turn this off, just like the PayPal option on every single payment form.

    Why would you want to accept PayPal via 2CO for a higher % vs directly on PayPal? For people that donīt have PayPal correct?

    Well, if you sign up with 2CO for CC payments and you also happen to already accept PayPal on your own PayPal account you donīt want this, on every single payment your customers make with 2checkout, the PayPal option is there on the 2CO form. Why? You cannot turn it off and neither can you turn off the currency options on the top.

    If I want to accept only CC with 2CO and only in US dollars, it seems its not possible. This is a business nightmare, you made your price and % calculations and now your customers start to pay with other options on the form which are allot higher than what you planned, and you cannot turn this off.

    I did noticed that currency options in 2CO are way off market, and this is why I want to turn them off as well, because they are a rip off, you end up paying them over 10% of your earnings with this.

    Maybe someone from 2checkout can comment on how to turn this off, because I remember when they added the PayPal option allot of people complained about the same and they had an option to turn this off on your account which I did, several months later, voila !!! It appeared again and now you cannot turn this off. PayPal is there on every single payment form, and so are the currency options.

    Options should be what their names says, "options" not be forced on customers, in particular if they are actually bad for their business which this options are.
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  11. #11
    Join Date
    Jul 2012
    Location
    Houston
    Posts
    258
    2checkout has high rates but they are anyway a good option, have you tried to simply overide the currency when sending clients over?
    Then you can process in selected currency and let you customers browse products in local currency

  12. #12
    Join Date
    Jun 2005
    Posts
    3,118
    Quote Originally Posted by EksoKen View Post
    2checkout has high rates but they are anyway a good option, have you tried to simply overide the currency when sending clients over?
    Then you can process in selected currency and let you customers browse products in local currency
    You already select which default currency to accept. But that does not stop someone from selecting another currency in the payment form. I donīt complain about 2CO bad service. Even while lately they did had tons of outages and problems accepting credit cards, I send allot of 2CO customers to Google Wallet and mysteriously Google could charge every single CC card that 2CO was rejecting.

    My complain is more about them not being flexible enough with options, branding and customization.
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  13. #13
    Join Date
    Apr 2009
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    OnTheWeb
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    2,017
    Quote Originally Posted by JLHC View Post
    IMHO it is quite normal for them to charge a fee on top of currency conversion. This is also the norm for some other payment providers like PayPal and AlertPay.
    Quite right

    Quote Originally Posted by 2Checkout_2CO View Post
    For transactions involving currency conversion*we add a percentage to our*wholesale exchange rates*for foreign currency. This charge serves as a protection against the volatility and risk associated with FX markets. The exchange rates are updated on a regular basis throughout the day. If you want us to take a look at your account specifically I would be happy to help you & explain what specific charges were, just email me at aeshelman@2co.com. I apologize for any confusion please let me know if I can do anything else.
    Understandable and acceptable

    Quote Originally Posted by nibb View Post
    The problem with this is that they donīt allow to turn this off, just like the PayPal option on every single payment form.

    Why would you want to accept PayPal via 2CO for a higher % vs directly on PayPal? For people that donīt have PayPal correct?

    Well, if you sign up with 2CO for CC payments and you also happen to already accept PayPal on your own PayPal account you donīt want this, on every single payment your customers make with 2checkout, the PayPal option is there on the 2CO form. Why? You cannot turn it off and neither can you turn off the currency options on the top.

    If I want to accept only CC with 2CO and only in US dollars, it seems its not possible. This is a business nightmare, you made your price and % calculations and now your customers start to pay with other options on the form which are allot higher than what you planned, and you cannot turn this off.

    I did noticed that currency options in 2CO are way off market, and this is why I want to turn them off as well, because they are a rip off, you end up paying them over 10% of your earnings with this.

    Maybe someone from 2checkout can comment on how to turn this off, because I remember when they added the PayPal option allot of people complained about the same and they had an option to turn this off on your account which I did, several months later, voila !!! It appeared again and now you cannot turn this off. PayPal is there on every single payment form, and so are the currency options.

    Options should be what their names says, "options" not be forced on customers, in particular if they are actually bad for their business which this options are.
    This is the joys of doing business. What you need to do now is plan out your pricing to fit exactly to your niche. You cannot expect 2checkout to be responsible for how your clients behave on your website. Their job is to process your payments not to ensure your clients choose paypal directly or use your default conversion.

    As JLHC rightfully said and 2Checkout_2CO explained further, any financial institution would perform these types of services at an added cost to you to protect themselves. It is now up to you to decide how you would like to treat with it. You should also try to read up on the Forex Trading to help you grasp what all of this is about but to put it simply, that 10% odd money which 2co takes out is their management fee for having to convert your payment every time that is needed. The entire financial system is built on management fees. You make money by selling your services, they make money by converting your money (among other things)
    If you're the smartest person in the room then you're in the wrong room

  14. #14
    Join Date
    Jun 2005
    Posts
    3,118
    Quote Originally Posted by cpoalmighty View Post
    Quite right



    Understandable and acceptable


    This is the joys of doing business. What you need to do now is plan out your pricing to fit exactly to your niche. You cannot expect 2checkout to be responsible for how your clients behave on your website. Their job is to process your payments not to ensure your clients choose paypal directly or use your default conversion.

    As JLHC rightfully said and 2Checkout_2CO explained further, any financial institution would perform these types of services at an added cost to you to protect themselves. It is now up to you to decide how you would like to treat with it. You should also try to read up on the Forex Trading to help you grasp what all of this is about but to put it simply, that 10% odd money which 2co takes out is their management fee for having to convert your payment every time that is needed. The entire financial system is built on management fees. You make money by selling your services, they make money by converting your money (among other things)
    You have it completely wrong, this is not how business is done at all.

    First of all, I use 2CO with their API. This means if customers select PayPal on their invoices, they are send to my PayPal account for paying. If they select Visa, they are send for example to 2CO (when it works, as lately they are lightly rejecting cards from almost everywhere).

    Second. I donīt have control over "their web pages". Once the user lands on the 2CO form, I cannot control the user experience. The PayPal option is still there, and you could disable it before by passing a variable in the API or url form, which does not seem to work anymore.

    I cannot control what a customer does or does not on the 2CO form, which is hosted by them. They can then pay with PayPal or change currency. Its not something I have control, and if they click on PayPal, lets say by mistake or just because they are not aware that is not my PayPal account, Im charged the 2CO % to receive the money vs the lower % I get using my own PayPal account.

    This is the reason why people that accept PayPal already wanted this option off, and there where complaints about this and they gave the option to turn it off, and then suddenly it vanished. If you donīt have PayPal, this is wonderful as you now have more payment options. But this is not the case for the rest which have a PayPal account already.

    Also, I never signed up with 2CO to accept PayPal. I signed up for accepting credit cards. I was never informed they would now give my users another option and I donīt think that was in their TOS either when I signed up. What happens for example if you had a lawsuit with PayPal and donīt want to deal with them? Or what happens if you are restricted from dealing with them at all? Or just donīt want to. 2CO is now forcing you the option. This is not my case, its just an example. PayPal is another company, its not 2CO.

    If you make your prices based on the 2CO fee, and then a small % of your customers that hardly know how to use the Internet click somewhere else and then you are charged more, then its my mistake for doing business?

    How would you like it if your merchant account one day charges you 500% more in fees, and when you ask them they say, their gateway had problems that day, so they redirect users transactions to a third party and so the fee is higher. Do you consider this also a mistake on your part?

    PayPal is a third party company. Its not 2CO. I understand they offer the option, but "option" means choice, not obligation. And they seem to advertise this PayPal option right in the face of your customers in the payment form as if they would prefer everyone using PayPal to pay now just using their own gateway. Last time I checked PayPal also has the option to turn the credit cart option off if you prefer, they do the same for Bill Me Later. They do not force your customers on using this options. They let you, the customer, decide which options are being offered on payment and which donīt. Just like 2CO also lets you block some countries which you donīt want to accept.

    This also confuses users, they donīt select PayPal for a reason in your website and then they see again the PayPal button on the 2CO form, and probably leave because they think its PayPal. There are just allot of reasons why its wrong, not to respect a user choice. If they select Visa, they should be offered to pay via Visa, not send to a PayPal form or a American Express form. Otherwise do not offer the choice in the first place. Otherwise please answer me why they let you choose which cards to accept? Countries and several other options but there is no choice for PayPal? It seems the PayPal option is forced to be displayed on every single payment a customers makes.
    Last edited by nibb; 11-17-2012 at 01:29 AM.
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  15. #15
    Join Date
    Jul 2012
    Location
    Houston
    Posts
    258
    Its also a issue that you are not allowed to pass the cost over to customer, that could solved the problem with currency if it was written in TOS but if you do i read someplace that 2co will make your account banned.

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