When paying with paypal to some foreign merchant, choose the option to "pay in USD" and not the default option. Look for something like "View conversion option" Ex: Paid 10$ for hosting via paypal. Paypal Calculated amount to Rs . 712 . I chose the pay in USD option. Paid 10$ , which in the bank records show as Rs. 690 . Why this works ? Paypal is evil. They don't use the actual currency exchange rate. They use their own inflated rate. When choosing the pay in USD/EUR option, the bank does the currency conversion at actual rates..