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PayPal vs. US banks for international transfers

Which offers the best deal for sending money overseas?

PayPal and bank transfers can get your money where it needs to go. By comparing fees, rates and speeds, we look at which is quicker and can save you money.

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FeesVaries by transferFrom $25 to $85 or more
Exchange ratesMid-market rate plus 2.5% marginMore than the mid-market rate plus margin
SpeedMinutes to 1 dayVaries by bank
Max Transfer AmountMaximum $10,000 per transferVaries by bank
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How they work?

Both PayPal and your major US bank can send your money next door or around the world online.

PayPal

To transfer money through PayPal, you’ll need to create a free PayPal account. You then send a transfer to your recipient’s PayPal account, funding it with your PayPal balance, bank account, credit or debit card or PayPal Credit. After your recipient receives the money, they can either keep the funds in their PayPal account or withdraw the money to their bank account.

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Bank transfers

Bank wire transfers are a quick, efficient way to move your money from one bank account holder to another through existing banking networks. While in the past you had to visit a bank branch to initiate a money transfer, these days most banks allow you to initiate transfers online and by phone as well. However, delivery options are typically limited to bank account deposits, usually within a few days.

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Who offers lower fees?

PayPal

How much it costs depends on how much money you send, where you send it and how you pay for the transfer.

When you pay for an international transfer using your PayPal balance or linked bank account, you’ll pay a fee between $0.99 to $4.99 — the fee is waived if you’re sending to the US.

When you pay with a credit or debit card or PayPal Credit, PayPal charges a fee of 2.9% of the transaction amount, a fixed fee based on currency and a fee ranging from $0.99 to $4.99 depending on how much is sent.

Bank transfers

While most major US banks offer free bank-to-bank domestic transfers (or waive fees for specific account levels), they’re typically your most expensive option when sending money internationally.

Banks charge higher fees — anywhere from $25 to $85 or more, depending on the details of your transfer — and a bigger variety of fees: incoming, outgoing and other fees. On top of high fees, they offer weaker exchange rates than money transfer specialists. They also offer fewer options for your recipient, typically requiring they have a bank account in which to receive your cash.

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Winner: Paypal

While bank transfer fees vary, for most transfer amounts it’s unlikely they’ll be lower than the competitive prices offered by PayPal.

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Compare other transfer services

Our table lets you compare the services you can use to send money abroad. Compare services on transfer speeds and fees, then click Go to site when you're ready to send.
1 - 12 of 12
Name Product Filter Values Fastest Transfer Speed Fees (Pay by Bank Transfer)
Wise (TransferWise)
Within minutes
From 0.41%
Wise uses the mid-market rate and transparent fees to help you send money in 50+ currencies.
Cash App
Within minutes
From $0
With this peer-to-peer payment app make payments to your friends and family with no transfer fees within the US or from the US to the UK or EU.
Instarem
24 hours
From 0%
New Instarem customers will get a special FX rate and zero-fees on their first transfer.
Instarem offers offers rewards on every transaction.
MoneyGram
Within minutes
From $0
MoneyGram has fast cash pick-up transfers to more than 350,000 agent locations worldwide.
OFX International Money Transfers (Business)
24 hours
$0
Business customers: Send safe, no-limit transfers with no fees and competitive exchange rates.
CurrencyTransfer for Business
24 hours
$0
Increase business efficiency with zero transaction fees and same-day transfers.
OFX
24 hours
$0
OFX has no maximum limit transfers, with competitive exchange rates for 45+ currencies.
Xe Money Transfer for Business
24 hours
$0
Save your time and money with Xe Money Transfer for business.
Currencies Direct (business)
24 hours
$0
Minimizes costs of international transactions and offers custom solutions for business clients. Currencies Direct may call you to confirm your transfer, so be prepared for a phone call shortly after initiating a transfer.
Xe
Within minutes
$3
Xe has fast transfers with low fees and a range of foreign currency tools.
CurrencyTransfer
24 hours
$0
CurrencyTransfer lets you shop around for the best exchange rate on its online marketplace.
Currencies Direct
24 hours
$0
CurrenciesDirect makes transferring money abroad simple with bank-beating exchange rates. Currencies Direct may call you to confirm your transfer, so be prepared for a phone call shortly after initiating a transfer.
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Who offers better exchange rates?

The exchange rates for both PayPal and bank transfers depend on the mid-market rate on the particular day. Here’s what we know about PayPal and bank transfer exchange rates.

PayPal

To calculate the exchange rate it offers to customers, PayPal takes the mid-market rate it gets from its bank and adds a 2.5% margin. PayPal updates this rate twice a day.

For example, for a transfer in euros (EUR):

  • If the mid-market rate is 1 USD = 0.96 EUR
  • PayPal’s exchange rate might be 1 USD = 0.94 EUR

Bank transfers

Nearly all banks skew the mid-market exchange rate for a profit, but you’ll typically pay higher margins than you’ll find with PayPal.

Using the example of a transfer to euros (EUR):

  • If the mid-market rate is 1 USD = 0.96 EUR
  • Your bank’s exchange rate might be 1 USD = 0.86 EUR

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Winner: PayPal

Here again, PayPal’s exchange rates are typically more competitive than those offered by your local bank.

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Case study: Sending $1,000 to Germany

Mika wants to help out her sister in Berlin; she has had a new baby girl. While Mika’s comfortable with the idea of running down to her local bank branch, she also has a PayPal account and thought she’d explore whether it’s an option.

Here’s what Mika would pay for a bank transfer with PayPal and her local bank.

PayPalMajor US bank
Exchange rate1 USD = 0.94 EUR1 USD = 0.86 EUR
Transfer fee$4.99$40
Transfer speed1–2 business days2 business days
Transfer optionsBank transferBank transfer
Total euros received935 EUR860 EUR

Visiting her local bank, Mika learns that her bank offers a weaker exchange rate and a stiffer transaction fee than PayPal does. Not only will Mika save $20 on the transfer fee by going with PayPal, but her sister will also receive 75 more euros to spend on Mika’s new niece — and possibly a day sooner.

Who’s faster?

PayPal

Money transfers with PayPal are speedy. If you’re transferring between PayPal accounts, funds are available immediately. If you withdraw money from your PayPal account into a bank account, you can expect the funds to get there within the next business day.

Bank transfers

Most banks offer international money transfers that will arrive within two business days, but your transfer speed will depend on your specific bank and type of account.

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Winner: PayPal

Even though both PayPal and bank transfers can get your money where it needs to go pretty quickly, PayPal edges out the competition with instant transfer options between PayPal accounts

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Who offers more options?

Payment methodsMinimum and maximum transfersDelivery methodsTransfer speedsCountries
PayPalBank transfer, credit or debit card, PayPal CreditVaries by country (about $0.02); $10,000 per transactionPayPal transfer, bank transferFrom minutes to next business day190+ countries
Bank transferOnline, in person, app (when available)Varies by bankBank transferTypically within two business days190+ countries

Bottom line

Although much of the comparison between PayPal and bank transfers can vary depending on your bank account, PayPal tends to come out on top thanks to lower transfer fees, stronger rates and faster service.

Ultimately, you’ll want to compare your options to find the service that best fits your individual needs.

Frequently asked questions