Ruling on payment through PayPal
29-1-2015 | IslamWeb
Question:
Is PayPal Halal? (Riba) Is PayPal halal for people buying outside the US because PayPal usually uses older conversion rates to convert money to US dollars. I buy items online from Ebay or other sites, and PayPal would convert the money (non-US dollars to US dollars) with older conversion rates (maybe rates from a few days before) as they usually do, sometimes the rates go up sometimes down. Would it be considered Riba for me to pay (higher or lower depending on the) rates that they use, than the current rate during the day of payment? Example: Few days ago the rate is 0.73 (which PayPal use) but the current day rate is 0.75, so that means I'm paying paypal at a higher conversion cost than the current day rate. Is this permissible? So, does that mean I should avoid using PayPal? or are they permissible (not really Riba)? Jazakallah Khair! (PayPal charges 2.5% of the total amount money you use for their service. It is a service, an administrative fee.)
Answer:
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His slave and Messenger.
The fact that PayPal uses a conversion rate other than the rate of the day of payment does not affect the validity of this transaction as long as the two currencies are different as you have stated; you pay with your local currency and PayPal converts it to dollars. In this case, PayPal is not obliged to sell you the dollar at the conversion rate on the same day of payment given the Hadeeth reported by ‘Ubaadah ibn As-Saamit 
that the Prophet, sallallaahu ‘alayhi wa sallam, said: "When the items are themselves different, then sell as you wish if the payment is made hand to hand." [Muslim]
Also, there is no harm if PayPal charges a fee for transferring the money to the seller. Hence, the criterion for deeming this transaction lawful is that the transaction itself that you would like to conduct through PayPal is permissible, regardless of other transactions conducted through PayPal, even if some of them are unlawful or doubtful. We cannot declare all the transactions conducted by PayPal in general as lawful or unlawful.
Allaah Knows best.