I wrote an earlier post on the Second Life Currency Exchange as a tutorial. Parts of the post are being updated. The idea behind that post was how to easy get a better price and understand some of what is going on there. However, the SL Exchange is not the only currency exchange available to Second Life residents/players. One is Virtual World Exchange or VirWoX.
The biggest advantages VirWoX offers are for residents outside the USA. They can avoid exchanging Linden Dollars for US Dollars then their native currency. That saves a transaction/exchange fee. Europeans can use direct bank transfers to avoid some other costs too and supposedly be safer.
Another advantage is being able to hold your account in your native currency. The US Dollar has declined about 25% in the past year. Europeans previously either suffered the loss from US to Euro value changes or additional conversion fees. VirWoX can eliminate those problems.
Security when handling money is an issue. Recently a resident was caught scamming XStreetSL terminals in SL. They were putting a clear bubble around the terminals. When clicking to pay one was paying someone other than the XStreetSL vending system. One has to click and enter Inspect or Edit to see who owns an XStreetSL Terminal before paying it. VirWoX added a step in their process to tell you that you are actually dealing with VirWoX and not a look-a-like or invisible bubble scam.
At Best Price
This gets complicated. First there are buy/sell orders for At Best Price (ABP) or market orders, which are defined in the XStreetSL Exchange post. The basic cost is L$50 + 2.5% of the amount. The cost on XStreetSL Exchange is the pip of L$30 or about 11% to the seller. So, large transactions on VirWoX are cheaper. Break even is about L$500. VirWoX appears to be a better deal on sell transactions over L$500.
Limit orders are also defined in the XStreetSL post. The cost for limit orders depends on the amount of currency exchanged in the last 30 days. From L$0 to L$1000 it is 3.9%. From there the rate goes down. See the table.
Sounds pretty good, so far. However, there are some other costs. PayPal charges VirWoX for moving money in and out of PayPal. The actual cost depends on which currency, country of residency and the size of the transaction. They provide a Euro example. The base fee is €0.35 plus 3.4%. We could assume the cost is similar for US Dollars or US$0.51 + 3.4%. The problem is one cannot know the exact cost until after the transaction closes. So Paypal fees are an estimate.
When withdrawing money from PayPal there is a US$1, or EUR$1 or GBP$1 fee. Withdrawal from VirWoX to SL is free. Deposits from SL to VirWoX are also free as are bank transfers.
Exchanging L$2,000 to PayPal cash is going to cost about: L$2,000×2.5%=L$50+L$50 fee = L$100.
Add to that the PayPal fee: US$0.51 or at L$270/US$1 = L$137 and then add 3.5% of the amount (now L$1,900) x 3.5% = L$67 for a total of L$304 or 15.2%. This is just slightly more than the XStreetSL cost of 11.1% for US customers. But the 4.1% difference of US$0.30 is not going to cover any of the additional transaction costs for European customers going through XStreetSL.
For larger transactions the cost goes down. Even for frequent small transactions the price can be better.
While not a big winner for USA residents this gives a definite advantage to those outside the USA.