My first encounter with Paypal - Withdrawal procedure and queries

Several tips and guides on how you can withdraw funds from Paypal to your local bank account

I won't say that I'm a total pro at this, but I have done some really extensive digging and calculating in order to get the information that I'm posting here, inclusive of questions (and the answers that I've gotten) from Paypal customer service and the results that I've gotten by experimenting with Paypal.

A flow chart on how the transfer of funds will work. I'm using my Fiverr account as an example.

XXX (Pending flow chart)

Some common FAQs for Paypal withdrawals

Withdrawing into another person's bank account?
No, you cannot do that

Use someone else's credit card 
No, you cannot do that

Withdrawing into a joint account whereby your name is listed as the second bank account holder
Pending answer from Paypal

Failed withdrawals due to valid errors
Minus RM15 fee from your Paypal account
(You can contest this via opening a petition on Paypal to reclaim your RM15 if you think the error stated is not valid)

NOTE: The local banks themselves may impose a charge as well if the withdrawal is rejected.

Withdrawal limits
(Unverified account): RM 2000.00 per month up to a maximum of RM 12,000 
[This is not exactly true] - No wonder I am unable to withdraw over a thousand ringgit at one go. Anyway, the new limit is RM1000.00 per transaction and in order to hit the monthly limit of RM2000.00, you will have to perform 2 separate transactions in a month.

(Verified account = meaning that you have a valid credit or debit card added to your Paypal account): No limit

Conversion taxes?
Yes, please refer to currency conversion below

Withdrawal duration
2-4 days if you're lucky. It's best to withdraw on Monday or Tuesday in order to get your money within the week (without any public holidays in between) and avoid any unnecessary delays.

Worse case, it may take up to a month. However, if the withdrawal is delayed for around week or two, please check if the hold-up is on Paypal's end or on your local bank's end. How? Check whether Paypal has listed the withdrawal as 'completed' or not. 

Most of the time, it's the local bank that is holding-up your withdrawal. If so, you'll need to contact your local bank, but it doesn't hurt to lodge a report to Paypal as well.

Don't worry - this is a common issue. You'll get your money in time.

List of banks with confirmed withdrawals from Paypal

These banks are confirmed to work based on comments on the website listed in the 'Other resources' subtopic.

• Public Bank
• Maybank
• CIMB bank
• RHB bank

However, any of the listed banks should work perfectly as well. These are just a list of banks that other people have withdrew money from Paypal to successfully.

I've added my bank account months ago and my bank account status still says 'checking account'.

The term 'checking account' does not mean that Paypal is verifying  your account. It refers to your bank account type = savings account. - Being someone who is unfamiliar with finance terms, I was duped by this... lol.

Just a note, the type of your bank account doesn't really matter in regard to withdrawals.

For withdrawals less than RM 400...
Please be aware that you'll be subjected to an additional charge of RM 3.

Currency conversion

This question warrants an entire section by itself. Anyway, I hope you can understand my explanations.

Conversion of currencies will be subjected to tax and a flat rate.

• The flat rate maximizes out at $1 (USD). (Will vary depending on the currency you receive)
• The tax will differs depending on where you receive the money from (Refer to the source for more info).

Source: http://adf.ly/r9OgE

For transferring more than $400 (USD) at a time, you will be subjected to ~4.4% tax and a flat rate of $1 (maximum) for USD to RM. However, from my calculations, I as subjected to only ~2.7% tax as compared to the 4.4% stated on Paypal's website (the flat rate still applies). Not sure what's wrong, but then the tax is less than expected so I'm happy :). 

If you transfer less than $400 (USD), you'll be subjected to a combination of tax and flat rate of around 2%. I've tested this by transferring $12 (USD) and I only get $11.76 (USD) in my Paypal. 

The current balance that you see on your Paypal account was already subjected to the deductions mentioned above. Hence, the money you earned is less than what you expected - by quite a lot in fact.

NOTE: Paypal exchange rates are way lower than the current exchange rates

As of 15:00 15/8/2014, Paypal is only providing RM 3.08 for each USD as compared to the exchange rate stated on Google which is RM 3.17 for each USD. That's almost a 10 cents difference for every dollar you cash out!

Edit: I've checked the currency rate for USD to RM again today and, not surprisingly, Paypal's exchange rate is almost always 10 sens less than the current exchange rate.

If you have any other queries, do not be shy! Go ahead and send Paypal an email through their support site: http://adf.ly/r9OeP

Other resources: 

http://adf.ly/r9Ode