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My PayPal USD->CAD currency conversion avoidance quest

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  #1  
Old 04-18-2003, 08:55 PM
ddent ddent is offline
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My PayPal USD->CAD currency conversion avoidance quest


Hey everyone...

I've mentioned in the past I was looking at ways of avoiding needing to convert US dollars to Canadian dollars in order to withdraw from PayPal. For the most part, I have been successful.

I evaluated a lot of banks, and did a fair bit of research. The trouble is, most people who work in banks have no idea what you are talking about when you ask them for an ABA routing number, or ask for ACH information. The mere mention of a something number tends to get "oh, you want to do a wire transfer?". *bashes head against wall*

Some tricks for getting information:

ACH is also known as EFT or AFT. To simpler minded folk it is known as 'direct deposit it... you know, how payroll is often done?'. It is also known as pre-authorized payments. I've gotten to be good at figuring out how to make them understand what I'm asking; they usually just don't know .

Also to note is that sometimes the account number is different for ACH than what is printed on your cheques. I even came across a software package the sole purpose of which was to correct account numbers and tell you when they are likely invalid. It scared me that the pricing was of the 'contact us' variety, and I only would have used it once anyway.

Along the way I've also discovered that PayPal's refusal to deposit in US dollars to Canadian banks is not for reasons related to how the banking system works. It is pefectly possible to do EFT in US dollars in Canada. They just don't want to... it would seem to me that they are in the currency conversion business these days as well. Examples of this: In the past, when you did a US$ purchase on a CAD$ credit card, they would simply bill your credit card in US dollars and let your CC company convert it. They now insist on converting it to CAD themselves, and not necessarily at a preferential rate. Even worse is that if you get a refund from someone they will do it at a worse rate than their current one for sending money.

It is even possible to encode any old Canadian account to work on the US ACH system by mangling your transit numbers and routing numbers and account numbers properly and prefixing with 52 or 62, depending on currency, and calculating a check digit. But PayPal rejects such a transaction.

One option I considered was simply opening an account at a US bank. There were a number of reasons I didn't like this; for one I didn't particularily feel like driving to the border. There were also tax concerns and a number of other logistical and personal reasons I didn't want to do this.

I'd heard bits and pieces of Canadian banks offering accounts that work like US ones, but as I've stated, getting solid information from employees was very hard.

I've been a VanCity (local credit union) client for ages, and have been very satisfied with the service I've been getting from them. In my entire life I doubt I've paid $5.00 in service fees. Unfortunately their US dollar offerings are weak. It could be that if I inquired in the right place I would find out that they do in fact offer what I want. That could also be why they can encode and print cheques in branch for Canadian accounts but not for US accounts; possibly if I ordered US cheques I would find out the secret.

TD seems to offer a US account package to their clients for $4 or $7 per month, depending on number of transactions and a few other things. This was a little appaling, and besides, you needed to already be a client of theirs to get it.

CIBC seems quite lacking in US dollar offerings. According to their website, a US dollar account with them only can be drawn from at the account at which it is opened. In the world of electronic ledges, that is an extremely foreign concept to me. I haven't visited my 'home' branch in ages, having moved since the time the account was opened.

HSBC seems to offer something that could be what I was looking for, but it may also be only for business customers. Besides, the fees weren't very good their either.

Scotia Bank seems really friendly. I would have gone with them quite happily, had they offered what I wanted. They were actually able to tell me with some certainty that they didn't do what I was looking for, and they had a reasonable fee of $1 per month. To boot, with a US dollar account with them, you could have bank drafts done up free! I suspect they will be who I take my merchant card processing to when I get my volume up a bit; they seem good and don't play the gateway fee game.

BMO was downright rude to me on the phone. They seemed to think I was a terrorist for even requesting the information I was requesting. As if that shouldn't put me off dealing with them (and the other person I know who closed all their accounts with them as a result of being treated rudely), they had a PDF on their site explaining how they were changing their fee structure to better suit their clients needs and reduce their client's banking costs. I would believe that if it weren't for there being nothing but increases and reduced free features in the flyer. I am not an idiot, so please don't lie to me. They may offer what a US dollar account, however, they charge more than Royal, and I'm not particularily interested in supporting a business which is rude to me when I'm not even their client yet.

Which brings me to Royal Bank / RBC. They were friendly on the phone, offering to book me appointments and the like. They have good pricing on their US dollar accounts. You can go with a no monthly fee account (per transaction), get one free transaction per month, free deposits, AND... one free transaction for each direct deposit. Direct deposit was the only reason I wanted the account in the first place. Almost like a dream come true. I went into the branch, had an account opened, and had what I considered to be a truckload of cheques sent to me free of charge. I was given a 'routing' number which turned out to be their SWIFT number. Gar. I found the correct routing number, and it is also what appears on the cheques (which are encoded exactly like a US cheque, and are drawn on a us correspondent bank). The number is: 026004093. How do you get PayPal to send you money in US funds? Go to your preferences, then bank account. Click to add a US bank account. Put "Royal Bank of Canada" as the bank name. Put 026004093 as the routing number. Now, for your account number, take your branch's transit number (this is 5 digits, and should begin with a zero. I belive it to also be the first 5 digits on the account part of your US cheques, except if it begins with a 9 replace the 9 with a zero. If you have them issue you temporary temporary void cheques in branch it will be the first 5 digits on the MICR line, ignoring the cheque number. The transit number can also be found on the first page of your 'welcome' documents, though IIRC needs to be padded with 0s at the front to make 5 digits). The next part of your account number is your actual account number, which can be found right above the 'pay to the order of' on your cheques. Remove any dashes, and remember, if your account number is ending up at more than 12 digits in length, something is wrong, and it won't work. The good news is that with PayPal you can screw up your US account information all you want and they don't charge you a fee.

----
Message > 10,000 characters . Splitting.

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  #2  
Old 04-18-2003, 08:56 PM
ddent ddent is offline
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So after I added the RBC account to my PayPal account, I decided it would be best to wait for the two confirmation deposits to appear in my account to make sure that it was the right number, or wait for PayPal to send me an email saying the account # was invalid. After a few days I hadn't received a rejection, and I had some US dollars to deposit (in $1 and $5 bills from a random eBay buyer - a funny and longish story in itself), so I went into a branch. There was $0.xx in my account, but no transactions had ever been posted to it. Odd. Eventually they found how it got there, and I asked for the amounts of the two transactions, and entered $0.xx and $0.xx on the PayPal system when I got home. PayPal accepted them... success! Mostly. I asked PayPal to withdraw $100 US to my account, and a few days later the amount appeared in my account! Then I made a purchase, and didn't quite have enough in my PayPal balance to cover it. So I decided to do an Instant Transfer, and avoid paying currency conversion fees (and besides, I had 3 free withdrawals accrued that month at Royal). That is where things went wrong. The account number was returned as being invalid - odd because its using the exact same numbers. I conjecture that either I need to be using different numbers that I don't have yet, or that I can only do deposits via ACH. I want to follow up on this part because it would be nice to be able to have money go both ways; I have a few ideas of the right departments to talk to for me to get the information (I'm thinking whoever does payroll and merchant services might be a good bet, or whoever deals with their US subsidiaries and correspondent relationships. They do have a service where they set you up with an account that is entirely US based.).

All in all I'm pretty happy with the fruits of my research. The only problem I have now is that PayPal won't let me re-add the account, since the instant transfer from it failed and got billed to my CC instead. They had a form to fax asking for the bank statement that shows the deposits made by them and a copy of my driver's license or other ID. I'm hoping my account doesn't get locked up and they don't also ask for my first born based on what I've seen whenever you need to fax them something. I sent the fax in today and amazingly I also got confirmation a few minutes ago that they received the fax. Apparently their fax machine _doesn't_ feed directly to a shredder.

So, if you want to avoid constantly converting back and forth between USD and CAD, go open a USD account at Royal. You don't even need a CAD account with them, and you don't have to be an existing client. You needn't pay any fees, especially if you have PayPal send you a direct deposit every once in a while. Don't try to do any withdrawals from your account to PayPal though, at least not until I get more information on the subject.

Lots of typing, and I haven't done a sanity check on what I've written. Hopefully its all readable and is of use to some of you!

Kind regards,

Daniel Dent

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  #3  
Old 04-18-2003, 09:50 PM
Nymix-CB Nymix-CB is offline
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Didn't got the guts to read it all

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  #4  
Old 04-18-2003, 09:54 PM
ddent ddent is offline
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Hahaha. Well, you can probably start at the last paragraph of the first post for the important bit .

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  #5  
Old 04-19-2003, 06:24 AM
lobaloba9 lobaloba9 is offline
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i have an easier solution.

open an account with CHASE.
transfer funds from paypal to your chase bank account.
wire transfer your funds from your CHASE to your canadian bank account as and when you wish to (all through its internet banking services. No need to cross borders).

if you do not want to pay for the wire transfer, open an RBC bank account (like what the thread started proposed). ACH the funds from CHASE to RBC. In that case, Paypal won't find fault with you as you are literally transfering funds to a US bank account, and not a US dollar account in a Canadian bank.


go figure that.

  #6  
Old 04-19-2003, 10:33 AM
DStar DStar is offline
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TD Canada Trust charges $10 US/month for a US-dollar business bank account.

It has a partnership with TD Waterhouse, which is a US Bank. So any TD Canada Trust member can open a US bank account with TD Waterhouse. The US bank account is in the US, but because there's a partnership (it's the same company, just a US version) you can easily exchange money between the accounts.

I have so far been unable to determine what TD Waterhouse's fees are for normal banking or normal business banking. (Confusing site.)

The other downside is that you would have to claim US income tax on any interest in the account.

However, since it's actually a US bank account, paypal probably wouldn't have any problems either depositing or withdrawing.

HOWEVER - and I say this as a longtime Canada Trust customer - since TD acquired Canada Trust, there's been a definite decrease in the level of service. Royal Bank is definitely more friendly towards small business.

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  #7  
Old 04-19-2003, 02:31 PM
ddent ddent is offline
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Dstar, RBC actually offers the same thing. They call it 'embassy banking'. TD has http://www.tdcanadatrust.com/usbanking/checking.jsp .

But, I want to keep my money in Canada to avoid the whole US tax thing. Dealing with Canadian taxes is pain enough.

Its funny you mention service levels.... I've been quite shocked at the speed of service I've had with RBC. VanCity has trained me so that I'm not used to needing to wait a fair bit every time I go into a bank...

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  #8  
Old 04-19-2003, 02:53 PM
lobaloba9 lobaloba9 is offline
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but paypal will find fault with you if you transfer to a US dollar account based outside USA right?

  #9  
Old 04-19-2003, 04:21 PM
ddent ddent is offline
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Read carefully: I had no problems withdrawing to my US dollar account at RBC with my account input as if it were a US bank account. Just don't try to add funds to your paypal account from it.

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  #10  
Old 04-19-2003, 07:36 PM
ddent ddent is offline
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Update: I just spoke with a very friendly person in the PayPal ACH department. They re-enabled that account on the system and I can now do withdrawals again .

After all the bad things I've heard about PayPal from others, I am pleasantly surprised.

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  #11  
Old 04-19-2003, 11:38 PM
DStar DStar is offline
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Glad to hear it's working out.

Interesting... so the Royal account is still a Canadian account... that's a good thing.

I'll probably switch to Royal at some point, or to a credit union - need my birth certificate to arrive first...! TD was at least kind enough to open an account for me while I'm waiting for it because I already had a personal account with them. So I can at least get my business going, even if I can't get a credit card yet.

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  #12  
Old 04-21-2003, 11:27 AM
lobaloba9 lobaloba9 is offline
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does this apply to us dollar accounts held in other countries, eg. UK?

  #13  
Old 04-21-2003, 02:40 PM
ddent ddent is offline
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Hmm, could, not sure. Easiest way to tell is probably to ask for checks for it. I don't know how checks are formatted (on the MICR line on the bottom, or even if MICR is used) in the UK, but in Canada the US' and Canada's checks are a bit different in terms of formatting.

If it has a 9 digit ABA number surrounded by some seperators, it may be that the account will work. Especially if it that # is 026004093. Let me know and I can try to help .

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  #14  
Old 04-22-2003, 01:37 AM
lobaloba9 lobaloba9 is offline
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ok... but i currently do not have a us dollar account...

anyone has a us dollar account in countries other than Canada and USA?

  #15  
Old 04-22-2003, 02:32 AM
mrl14 mrl14 is offline
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thank you thank you thank you ddent!!

First thing next week, I will take a trip to Royal Bank and Open a USD account.

I'm currently with TD, and boy do I hate em :p

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