XE international money transfers

MoneyGram vs. Western Union vs. Paypal

We put three major providers to the test when it comes to sending cash overseas.

If you need to transfer money to friends, family or businesses outside the US, you have range of money transfer services to choose from. In truth, international money transfers are no longer a game for only tried-and-true players like Western Union and MoneyGram. Newer companies promise to undercut the competition to earn your business.Here we look at three major players in the money transfer market — MoneyGram, Western Union and digital payments giant PayPal — to see which one offers the better deal.

moneygramwestern-unionchasebank
MoneyGramWestern UnionPayPal
Fees
FeesStarts from $4.99Starts from $5Varies by transfer
Exchange rates
Exchange rates5% or more above the mid-market rateUp to 6% above the mid-market rateMid-market rate plus 2.5% margin
Speed
SpeedMinutes to 4 business daysMinutes to 5 days or moreMinutes to 1 day
Max transfer amount
Max Transfer AmountVaries by countryVaries by countryMaximum $10,000 per transfer

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MoneyGram, Western Union and PayPal: How they work

MoneyGram, Western Union and PayPal each offer an easy online process to exchange and send money around the world.

MoneyGram and Western Union

The way you go about a from the transfer with MoneyGram is nearly indistinguishable from the same process with Western Union.

So much, in fact, that we can describe them both in one shot: You go to their sites, enter how much you’re transferring and to where and see how much you’ll pay for the exchange.

With either service, you also have the option of visiting an office, calling or using a mobile app to initiate a transfer. And once complete, they convert and deliver your money to a bank account or for cash pickup at locations worldwide.

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 the transfer 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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Who offers better exchange rates?

To understand who offers better exchange rates, you’ll need to first look at the mid-market rate. This is the true exchange rate that averages the buying and selling rate of a global currency — and the rate banks and transfer services use when they trade among themselves.

MoneyGram

MoneyGram skews exchange rates for a profit. Depending on where you’re sending your money, the exchange rate could be 5% or more above the mid-market rate. This means hundreds of dollars on a large transfer diverted to MoneyGram’s pockets.

Western Union

Like MoneyGram, depending on the country you’re sending money to, a typical exchange rate at Western Union could be up to 6% above the mid-market rate. If you’re sending a large amount overseas, this is a lot of money straight into Western Union’s coffers.

PayPal

To calculate the exchange rate it offers to customers, PayPal takes the mid-market rate and adds a 2.5% margin. The best way to find accurate exchange rates is by using PayPal’s currency exchange calculator, which you can find after you log in to your account.

  • Winner: PayPal

For your typical overseas transfer, you’ll get a stronger exchange rate with PayPal.

Sites like Paypal for international money transfers

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Who’s cheaper?

The most effective way to compare MoneyGram, Western Union and PayPal is to look at a case study.

Case study: Sending $1,000 to Germany

Malcolm wants to send $1,000 to his sister, a military wife living at the Ramstein Air Base in southwestern Germany.

He’s tempted by the convenience of his local bank, despite its reputation for high fees and weak exchange rates. Before he decides, he compares how much he’ll pay to deposit the money to his sister’s bank account with MoneyGram, Western Union and PayPal.

MoneyGramWestern UnionPayPal
Transfer fee$4.99$5$20
Exchange rate1 USD = 0.9167 EUR1 USD = 0.8652 EUR1 USD = 0.9451 EUR
Transfer speed4 business days6 business days1 business day
Total received
916.70 EUR865.20 EUR945.10 EUR

By analyzing his options, Malcolm comes to understand how the complexity of fee structures and transfer options ultimately affects how much he’ll pay. There’s no question that PayPal offers the strongest exchange rate, affording nearly 80 more euro for his sister over the other two options. But because its transfer fee is a percentage of the total transfer amount, Malcolm will pay the highest fee by going with PayPal.

If time is not on Malcolm’s side, PayPal wins again with a delivery time up to five days sooner than MoneyGram or Western Union.

Ultimately, he’ll need to weigh which element is more important before making his transfer.

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Who’s faster?

MoneyGram

Delivery speed varies by transfer option, with cash transfers in person or by phone delivered in minutes (at higher costs). MoneyGram’s cheaper options take two to four business days for receipt.

Western Union

Like MoneyGram, delivery speed with Western Union too varies by transfer option. At an agent location or by phone, your transfer could be delivered in minutes (at higher costs). Your cheapest options could take five days or longer, depending on the country.

PayPal

With PayPal, transferring among existing PayPal accounts is instantaneous. Payments from your PayPal account to another bank account are delivered by the next business day.

  • Winner: PayPal

Whichever way you send your money, it’ll get to your recipient more quickly with PayPal. For deposits to an account, up to four days sooner.
How to send money overseas through MoneyGram

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Who offers more options?

Payment methodsMinimum and maximum transfersDelivery methodsTransfer speedsCountries and currencies
MoneyGram Bank account, credit or debit card, cashMinimum and maximum varies by countryBank transfer, cash pickup, other options by location2–4 days190+ countries and 45+ currencies
Western Union
Bank account, credit or debit card, cashMinimum and maximum varies by countryBank transfer, cash pickup, e-walletVaries from minutes to 5+ days200+ countries
PayPal
Bank transfer, credit or debit card, PayPal creditMinimum varies by country (about $0.02); maximum $10,000 per transferPayPal transfer, bank transferVaries from minutes to 1 day202 countries
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Bottom line

That you’ll get stronger exchange rates with PayPal is clear-cut. But depending on how much you’re sending, you could pay higher transfer fees with PayPal. Then if your recipient doesn’t have a bank account, MoneyGram’s or Western Union’s cash pickup may be your best option.

Ultimately, you’ll want to compare money transfer specialists to find a provider that’s right for your situation.

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