PayPal expert reporting in!
Hahhahaha! Kidding but I can help you clear your doubts.

In short, PayPal charges currency conversion fee on top of the market rate that's why they are higher than banks.


When you checkout a purchase, you're brought to a page to log into your PayPal Account right?
Then you should see a page showing a full summary of your items on your left.. and in the box(on your right) it shows how much of MYR is used for funding USD(for example).
You will see a "Other Conversion Options" under Payment method --> You should be at the Payment Review Page


Nope. PayPal is not affected by Malaysia's GST implementation

It's just the fx rates fluctuating, thats why.
It's not guaranteed that bank rates are always cheaper than PayPal's.

90% of the time, bank rates are cheaper.
Say... 1 out of 10 times could have PayPal's rate more favourable.

PLUS!
There are also chances where your bank incur additional oversea charges or what they call it... Admin Fee.

This post has been edited by aarondotcom89: Apr 14 2016, 09:09 AM

Admin fees are actually imposed by every bank.
It's just how the bank handles it;
1. Some absorb the admin fee because you're utilizing ther card
2. Some pass it on to the card holders

But whoever faced this issue, you can contact your bank and they will explain it.