I am in Malaysia and this is getting on my nerve. How can PayPal hold us ransom for ebay purchases?

PayPal is now indeed not Ebay ie they "separated" last year, but it seems both are conspiring to force ebayers to submit to their plan of taking advantage of buyers. PayPal insist on being the money changer, as they can profit even more and the exchange rate could be way higher than what it is actually at the moment. PayPal can get a comission when processing the payment for the seller, and they can also get additional [hidden] comission from the buyer. To make it worse, it is up to them how much the exchange rate is.

Today, the exchange rate [on my screen by google is 1USD=4.0465. PayPal is quoting 4.167! . My card issuer do not charge any fees for currency conversion, and the card issuer also only uses MC/VISA rate without any additional fees

Last time there was an option to choose if PayPal would convert the currency or not, but now that option is taken away.
It seems PayPal is determined on forcing ebayers to pay them their controversial exchange rates

TO THOSE HAVING THIS PROBLEM: WRITE TO THE FTC .. FEDERAL TRADE COMISSION. TELL THEM THAN PAYPAL IS VIOLATING USA ANTICOMPETETIVE LAW. YOU CAN JUST SEARCH FOR FTC WEBSITE BY GOOGLE, AND WRITE A COMPLAINT THAT PAYPAL IS FORCING YOU TO ACCEPT THEIR CONTROVERSIAL EXCHANGE RATE.

You can also to that up, write to your respective central bank which regulates the law relating to the use of money. Tell them that PayPal is forcing you to accept their abominable exchange rate and ebay is also using PayPal as their credit card processing company, ie if the user did not use PayPal as the payment processor