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Ok Shelly, I have sent an email to PayPal to enquire about it. From everything I can read on their help section it appears American Cheque Accounts are the only ones that are eligible, but I will see what they say. 
Edit: This is their reply. I will try the bank to see what they charge to convert it to US before I sent a money order. Geez what a pain in the arse. 
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Dear Michael,
Thank you for contacting PayPal.
International users must have a confirmed credit card registered with
PayPal in order to be able to sent payments. I have listed the rules below
for International Accounts to accept, send or withdraw payments.
The following guidelines apply to accepting, sending and withdrawing funds
using an International PayPal Account.
To accept funds into your PayPal Account:
If you have an account registered from Australia, Austria, Belgium, Canada,
Denmark, Finland, France, Germany, Hong Kong, Japan, Mexico, Netherlands,
New Zealand, Norway, Singapore, Spain, Sweden, Switzerland, and the United
Kingdom, your account will have local ACH withdrawal availability.
· If there is no credit card or bank account added, you will receive
payments with 'accept or deny' status
· You will be asked to add a credit card and/or a bank account
· Once one payment is accepted, all future and pending payments will
automatically be accepted
· Members with accounts registered from Canada will not be asked to
register a credit card or bank account to accept payments. All payment sent
to Canadian accounts will be automatically accepted into the account
If you have an account registered from any International country other than
those listed above, your account has no local ACH withdrawal availability.
· All payments that are sent to an International PayPal Account
registered from a country without local ACH availability will remain in
'accept or deny' status until the payment is accepted or denied
· You will be required to add a credit card to accept a payment. Once a
credit card is added, you will be asked to either register a bank account
or accept the payment without registering a bank account
· Accepting a payment will only affect that payment, future and pending
payments will have to be accepted or denied individually
To send funds from your PayPal Account:
· All members must add a credit card to send funds from their PayPal
Account to another member
· If there is an initial sending limit granted, you can send up to that
limit before having to complete the Membership Process
· If there is no sending limit available, you will have to complete the
Membership Process to send funds
· Once you have completed the Membership Process, your sending limit
will be lifted, subject to the credit available on the card
When you use PayPal to send money, the balance in your PayPal Account is
used first. If the payment that you are sending exceeds the amount of funds
in your PayPal Account, the remainder of the payment can be funded through
an active credit card, a confirmed bank account, or another currency
balance. You can view the source of funds and the back up source of funds
(if applicable) for a payment on the 'Check Payment Details' page before a
payment is sent. To view other funding options, click the 'More Funding
Options' link.
To withdraw funds from your PayPal Account:
All members, (with the exception of members from Argentina, Anguilla, Costa
Rica, Dominican Republic, and Jamaica) can withdraw funds to a U.S. bank
account.
International customers registered from Australia, Austria, Belgium,
Canada, Denmark, Finland, France, Germany, Hong Kong, Japan, Mexico,
Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland,
and the United Kingdom, can withdraw funds to their local bank account.
The requirements to withdraw funds to a U.S. or local (if approved) bank
account are:
· Confirm email address
· Add bank account information
· If you receive a New Account Withdrawal Limit, you can withdraw
up to that amount before you have to add a credit card and complete the
Membership Process
· If you do not receive a New Account Withdrawal Limit, you will
need to add a credit card and complete the Membership Process to withdraw
funds
Please note:
· There is no option to withdraw funds to a credit card, as that is not
supported by the credit card companies
· International members cannot request a check withdrawal
If you have any further questions, please feel free to contact us again.
Sincerely,
Paula
PayPal Customer Service
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