{"id":986811,"date":"2022-06-03T13:47:36","date_gmt":"2022-06-03T17:47:36","guid":{"rendered":"https:\/\/www.finder.com\/ca\/?p=986811"},"modified":"2024-06-07T18:36:25","modified_gmt":"2024-06-07T22:36:25","slug":"paypal-vs-banks-international-transfers","status":"publish","type":"post","link":"https:\/\/www.finder.com\/ca\/international-money-transfers\/paypal-vs-banks-international-transfers","title":{"rendered":"PayPal vs. Canadian banks for international money transfers"},"content":{"rendered":"

Not sure whether to use PayPal or your bank to send an international money transfer? We take a look at fees, exchange rates and transfer speed to see how PayPal compares to typical Canadian banks.<\/p>

The information on this page is current as of June 2, 2022.<\/p>

What options do Canadian banks offer for sending money internationally?<\/h3>

For many years, the primary means of sending money abroad from Canadian banks was by wire transfer. To compete with online money transfer companies like PayPal, most Canadian banks started offering separate international money transfer services<\/a> that are faster, cheaper and more convenient than wire transfers.<\/p>

Wire transfers are still considered one of the safest ways to send money internationally. But bank international money transfers are usually quicker and less expensive.<\/p>

When comparing Canadian banks to PayPal, we\u2019ll take into account both bank wire transfers and bank international money transfer services.<\/p>

Quick verdict<\/h4>
\"Fees
<\/a>Lower fees:<\/b><\/a>
Tie<\/div><\/div>
\"Exchange
Exchange rates:<\/b><\/a>
Canadian banks<\/div><\/div>
\"Clock
Fast transfers:<\/b><\/a>
PayPal<\/div><\/div><\/div><\/div><\/article>

Which offers lower fees?<\/h3>

PayPal<\/h4>

It\u2019s free to transfer money from your PayPal account or bank account to someone in Canada. It costs $2.99 to transfer from your PayPal account or bank account to someone living in the US or most European countries. For all other countries, the fee is $4.99.<\/p>

If you pay by card instead, you\u2019ll be charged an additional 2.9% of the transfer amount plus a small fixed fee (often under $0.50 CAD) based on the receiving currency. This makes it expensive to send large amounts if you need to pay by debit or credit. Instant Transfers cost an extra 1% (up to a maximum of $10.00).<\/p><\/div>

Canadian banks<\/h4>

Sending a bank wire transfer from a Canadian bank will likely set you back between $15 and $50+<\/a>. You could lose even more to intermediary bank fees. Intermediary banks are financial institutions through which money must pass to reach recipients\u2019 accounts.<\/p>

Bank international money transfers are much cheaper, often costing less than $10. In fact, CIBC Global Money Transfer<\/a> offers fee-free transfers to 130+ countries. RBC international money transfers<\/a> charges $6 to send $1,000 or less and $10 to send more than $1,000.<\/p>

The downside is that you need to have an account with any bank from which you want to send funds, and these accounts will likely come with a monthly fee.<\/p><\/div><\/div>

\"TrophyWinner: Tie<\/b><\/div>
Canadian bank wire transfers can be super expensive, but most banks offer alternative international money transfer services that are comparably-priced to PayPal (assuming you pay from a PayPal account balance or bank account).<\/div><\/article><\/div><\/article>

Which offers better exchange rates?<\/h3>

The midmarket rate is the \u201ctrue\u201d exchange rate between 2 currencies, or the real value of one currency when exchanged for another currency. The exchange rate you get from money transfer services like PayPal or a bank is the midmarket rate minus a small fee worth a percentage of the midmarket rate. This fee is sometimes referred to as a markup on the exchange rate.<\/p>

A lower exchange rate means more of your money is pocketed by the transfer service and your recipient gets less money. A higher exchange rate means the transfer service pockets less of your money and more goes to your recipient.<\/p>

PayPal<\/h4>

We found that PayPal\u2019s exchange rates are often under the midmarket rate by 4%-5% or more. For perspective, a 2%-3% margin on the exchange rate means you could lose hundreds of dollars when sending $10,000 or more.<\/p>

Here\u2019s how PayPal\u2019s exchange rate could work if you\u2019re sending CAD to euros (EUR):<\/p>