Western Union Vs PayPal – What’s the Difference?

Easily compare the pros and cons or Western Union and PayPal money transfers.

PayPal is an online service for paying merchants, sending money to friends, family, or anyone with a PayPal account. You credit funds to your account from your bank account, credit or debit card and then send the money to another PayPal account. The receiver then transfers the money to their own bank account to access cash.

Western Union is a household name for international money transfers. Money is sent straight to the recipient’s bank account or funds are available to collect in person from a Western Union agent. Both services charge fees.

PayPal transfers within Australia and free. PayPal charge a percentage of the total transfer amount for international transfers, this fee varies depending on whether you’re using your available PayPal balance or paying with a credit or debit card. Western Union have a varied approach to fees depending on how the money is sent and collected and where the funds are being sent. Both services are secure, although Western Union is little more anonymous — it’s the payment method of choice for fraudsters. PayPal eliminates the need to keep entering your credit card or bank account information on the internet. We have a look at the similarities and differences between two popular money transfer services, Western Union and PayPal.

Western Union vs PayPal exchange rates

AUDWestern UnionPayPal
USD0.6986 USD0.699328 USD
EUR0.6360 EUR0.640186 EUR
JPY84.4360 JPY85.0281 JPY
GBP0.4591 GBP0.464250 GBP
CHF0.6870 CHF0.692952 CHF
CAD0.9610 CAD0.957566 CAD
HKD5.4148 HKD5.41737 HKD
BRL2.7057 BRLN/A
CNY4.5097 CNYN/A
CLP495.5500 CLPN/A

*Rates correct: 12.00PM – 13/12/15
*Rates correct: 12.03PM – 16/12/15

Western Union apply a margin on top of the market foreign exchange rate as well as charge fees for international transfers, PayPal do the same. Western Union publish their exchange rates and even let you calculate the cost of a transfer. PayPal use the market rate plus a currency conversion fee, which changes depending on the the method to send the funds and the recipient’s country.

Western Union vs PayPal – which is cheaper?

Asking which money transfer company is cheaper can be like asking how long is a piece of string. It depends. Western Union transfer fees are high, and can be a significant portion of the total transfer, which makes Western Union a good idea for transfers of a certain size only. PayPal’s approach to transfer fees, charging a percentage of the transfer amount can be more cost effective for smaller transactions. For example, sending $100 using Western Union can cost you as much as 10%; while PayPal transfers can come in around 3-6% of the transfer amount. Transfers to accounts in Australia are a little more clear cut, PayPal offers free transfers to other Australian PayPal accounts whereas Western Union charge a fee for this service. However, if the receiver doesn’t have a bank account, a Western Union transfer may be better option.

Western Union vs PayPal fees

The PayPal fees and charges disclosure statement is a heavy read. PayPal charge a currency conversion fee, which can be as much as 4% of the transaction amount for transfers made between different currencies. The charges for international transfers are much higher if the transaction is funded by a card payment. Western Union are more transparent with their fee structure; however, Western Union transfers cost more.

Sending $1,000.00 to India using Western Union

Payment Method

Receiving Method

Transfer Fee

Credit or Debit CardBank account$0.00
Credit or Debit CardCash


Sending $1,000.00 to the Philippines using Western Union

Payment Method

Receiving Method

Transfer Fee

Credit or Debit CardBank account$10.00
Credit or Debit CardMobile Money


Credit or Debit CardCash


What’s the difference between Western Union and PayPal?

Besides the fee structure, there are some key differences between the two services in how money is received. PayPal is an online service, unlike Western Union Paypal doesn’t offer the option to collect funds in person. The receiver needs to have a PayPal account to transfer the money to a linked bank account and make withdrawals.

Western Union works differently. Money can be collected at a Western Union agent without prior registration. The sender provides a secret password or the receiver shows identification to collect the money from an agent, or the money is sent right to the recipient’s bank account.

Western Union and PayPal pick up options

To get cash from a PayPal payment, the money must be transferred to a bank account first. Western Union offer cash collection as well as online transfers.

Western Union collection options

Collection OptionPayment Option Transfer Time
Cash in personCash in personFunds are available within minutes
Cash in PersonCredit or Debit CardFunds are available within minutes
Bank account transferCredit or Debit Card1 – 4 days
Mobile Wallet
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