I've used Paypal before with my Westpac Visa card.

I believe that Paypal submit the charge to your credit card in U.S. dollars and that is all.

In my case either Visa or Westpac convert that to Aus. $ on my monthly statement. The conversion rate I got was about 1 to 1.5 cents less than what is reported on the evening news.

Paypal apply their fees to the person receiving the credit card payment, nothing to the person paying with a c/c.

Hope that helps. Oggy.