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Western Union vs a bank transfer
How does Western Union stack up against making an international money transfer with a typical bank?
We compared Western Union with Ireland’s banks in a head-to-head money transfer comparison across the categories of fees, rates and speed. Find out which came out on top to make sure you get the best deal when you next send money overseas.
The fees and rates used in this comparison are accurate as of 15 June 2020.
Which has lower fees?
Western Union
Western Union’s fees vary depending on the destination and the amount you want to send. For an online Western Union transfer to the US, for example, you’ll pay around €2 depending on how much you’re sending.
But the fees may be higher for other countries.
Western Union does not charge any pick-up fees, but certain delivery methods such as sending to a mobile wallet may involve third-party charges.
Bank transfer
International bank transfer fees are numerous and wildly variable compared to Western Union.
At one Irish bank, you could feasibly pay as much as €32 in fees for a money transfer to the US regardless of the amount sent, while the lowest possible cost for a transfer would be €15.
Winner: Western Union
The fees are lower for small and medium-sized transfers, and they’re overall more predictable. However, the most cost-effective option depends on where you’re sending money, and how much.
Western Union may not be more cost-effective than a bank transfer in every situation.
Let’s crunch the numbers: Sending €1,000 and €10,000 to the US
Let’s look at those numbers side by side and assume you’re taking reasonable steps to get as cheap a bank transfer as possible.
Sending €1,000 to the US
| Western Union | Bank transfer | |
|---|---|---|
| Transfer fee | €0.90 | €22.50 |
| Exchange rate | 1 EUR = 1.1056 USD | 1 EUR = 1.1079 USD |
| Transfer speed | Same day | 2-5 days |
| Total British pounds received | USD$ 1,104 | GBP£1,082 |
Sending €10,000 to the US
The maximum transfer through Western Union is €5,000 at a time, so now you’d have to make two transfers with a $15 fee each time.
| Western Union | Bank transfer | |
|---|---|---|
| Transfer fee | €0.90 | €22.50 |
| Exchange rate | 1 EUR = 1.1056 USD | 1 EUR = 1.1079 USD |
| Transfer speed | Same day | 2-5 days |
| Total British pounds received | USD$5,528 | USD$5,514 |
Even if you take all possible steps to minimise bank fees, Western Union is a little bit more cost-effective.
Despite having a slightly better exchange rate, the bank falls down due to its fixed fees.
Both are very similar, and the difference all comes down to which bank you’re using, what the rates are at the exact time you make a transfer, and whether you’ve done everything you can to minimise the bank transfer fees.
Which offers a better exchange rate?
Western Union
As is typical for most money transfer services, Western Union will add a margin to the exchange rate.
For example, when sending money to the US:
- Western Union’s exchange rate: 1 EUR = 1.1056 USD
- Mid-market exchange rate: 1 EUR = 1.12 USD
So relative to the mid-market rate at the time, Western Union charges an exchange “fee” of sorts equivalent to about 5.7% on an EUR/USD transfer.
It varies widely by currency and circumstance, though. At the time of writing it’s over 10% for EUR to AUD, but only about 2.6% for EUR to Indian rupees.
Bank transfer
For the same EUR to USD transfer:
- A typical bank’s exchange rate: 1 EUR = 1.1079 USD
- Mid-market exchange rate: 1 EUR = 1.12 USD
This is equivalent to a 1% markup compared to mid-market rates.
The banks offer a slightly more favourable rate for GBP, equivalent to 1.2% at the time of writing.
Winner: Tie
Western Union offers better rates for some currencies while the banks will offer better rates for others.
The winner changes depending on which currency you’re transferring. The difference can be enormous though, so it’s well worth checking rates and comparing options at the time of the transfer.
Which is faster?
Western Union
Western Union can offer same-day transfers around the world, seven days a week, with a range of delivery options including in-person cash pick-up, bank deposit or transfer to a mobile money app.
Bank transfer
How long a bank transfer takes depends on which bank you’re using and where you’re sending money.
A typical international bank transfer can take 2-5 business days to process, often won’t be moving on weekends or public holidays and can only be deposited directly into a bank account.
Winner: Western Union
Western Union is faster and more flexible than a typical bank transfer.
General features
| Payment methods | Limits | Transfer times | Currencies | |
|---|---|---|---|---|
| Western Union | Credit/debit card, bank transfer | Minimum: €1 Maximum: €5,000 | Same day | 100+ currencies |
| Bank transfer | Straight from a bank account, or in person at a branch | Minimum: Anything above the fee Maximum: No limit | 2-5 business days | Varies by bank |
Western Union
Western Union works through thousands of offices and third parties in more than 200 countries around the world.
It sends money by ensuring that it has enough funds on hand at every location to handle most transfers. After the sender makes a deposit, the recipient receives the funds from the Western Union office in that country.
This is how it can send money almost anywhere in the world in just minutes.
Bank transfer
Banks conduct international transfers through the SWIFT network – an interbank communication network. When you send money overseas through a bank, it will leapfrog from bank to bank until it arrives at its destination. This is known as a correspondent banking system.
The reason bank transfers are typically slower and more expensive than other options is that there are so many correspondents involved, and each needs to process your payment as it passes through.
Bottom line
Depending on the situation, Western Union might typically be a quicker, more cost-effective and more convenient way of sending money overseas.
But even though Western Union beats the banks, it doesn’t beat all other money transfer services. Check out some of the other options in the table below.
Looking for more options?
Use our comparison calculator below to weigh up the fees, exchange rates and other details of some specialist money transfer providers.
The “Rate” and “Amount Received” displayed are indicative rates that have been supplied by each brand or gathered by Finder Ireland.
Exchange rates are volatile and change often. As a result, the exchange rate listed on Finder Ireland may differ from the actual exchange rate quoted by the brand. Please confirm the actual exchange rate and mention “Finder Ireland” before you commit to a brand.
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