Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.

PayPal vs New Zealand banks for international transfers

We compare the digital payments giant against your typical bank transfer to see which offers the better deal.

PayPal and bank transfers are both popular ways to get your money where it needs to go, but by comparing fees, rates and speeds, you might be able to figure out which offers the better deal.

The fees and rates used in this comparison are accurate as of 9 April 2020.

At a glance: General features

Payment methodsMinimum and maximum transfersDelivery methodsTransfer speedsCountries
PayPalBank transfer, credit or debit card, PayPal CreditMinimum: $1

Maximum: $60,000

PayPal transfer, bank transfer1 day190+ countries
Bank TransfersOnline, in person, app (when available)Varies by bankBank transferTypically within 2 business days190+ countries

Which has lower fees?

PayPal

PayPal charges a flat fee to send money overseas. If you pay by credit or debit card, there’s going to be a 3.4% fee added on, though it could be more depending on the currency you’re sending to.

Bank transfers

While most of our banks offer free bank-to-bank domestic transfers, they’re often the most expensive option when sending money internationally.

Banks charge higher fees – anywhere from $10 to $30, depending on the details of your transfer – and a bigger variety of fees. In general, there’s also a sending and receiving fee, which your recipient may have to pay.

Trophy icon
Winner: PayPal

While bank transfer fees vary, for most transfer amounts it’s unlikely that you’ll get anything lower than the competitive prices offered by PayPal. Remember to compare PayPal’s fees against other money transfer specialists to find the best deal possible.

Let’s crunch the numbers: Sending $1,000 to Germany

Let’s bring this into context a little. In our example, we’re going to send $1,000 to Germany using both PayPal and a local bank to see which is better. Keep in mind, rates vary for other countries.

PayPalMajor New Zealand bank
Exchange rate1 NZD = 0.60 EUR1 NZD = 0.59 EUR
Transfer fee$6.99$18
Transfer speed1 business day3 to 5 business days
Transfer optionsBank transferBank transfer
Total euros receivedEUR 593EUR 572
Receiver getsEUR 21 moreEUR 21 less

The result? A transfer through PayPal results in your recipient receiving €21 more. We can also see that PayPal offers a fairer exchange rate and fee for this particular transfer.

Which offers better exchange rates?

PayPal

To calculate the exchange rate it offers to customers, PayPal takes the current mid-market rate and adds a margin. PayPal updates this rate twice a day. The margin depends on what currency you’re sending to, but in general:

  • To USD or CAD: 3.5%
  • To other currencies: 4%

What does this mean for you? If you want to make a transfer in euros (EUR):

  • If the mid-market rate is 1 NZD = 0.60 EUR
  • PayPal’s exchange rate might be 1 NZD = 0.58 EUR

Bank transfers

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

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

  • If the mid-market rate is 1 NZD = 0.62 EUR
  • Your bank’s exchange rate might be 1 NZD = 0.58 EUR

Trophy icon
Winner: PayPal

Again, PayPal’s exchange rates are typically more competitive than those offered by your local bank. Check out the exchange rates offered by other money transfer providers and compare them with PayPal’s in the table below.

Which is 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 depends on your specific bank and type of account.

Trophy icon
Winner: PayPal

Even though both PayPal and a bank transfer can get your money where it needs to go pretty quickly, PayPal edges out the competition with instant transfer options between PayPal accounts. See how PayPal’s transfer speed stacks up against other money transfer companies.

How do they work?

PayPal

To transfer money through PayPal, you’ll need to create a free PayPal account. You can then send a transfer to your recipient’s PayPal account, funding it with your PayPal balance, bank account, credit card, 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.

Bank transfers

A bank transfer lets you move your money from one bank account 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. You might also hear it referred to as a telegraphic transfer (TT) or a SWIFT transfer.

Bottom line

Although much of the comparison between PayPal and a bank transfer varies 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.

Looking for more options?

Check out some other international money transfer options in the table below.

Min. Transfer Amount Transfer Speed Online Transfer Fee Rate Amount Received Description CTA Details
AUD 250 1 - 2 days NZD 0.00 0.726 USD
7,260
OFX has no maximum limit transfers, with competitive exchange rates for 45+ currencies. Go to site Show details
NZD 250 1 day NZD 0.00 0.726 USD
7,260
Send guarantees to match any competitor’s exchange rate. T&Cs apply.
Send has fee-free transfers in 30+ currencies to over 200 countries.
Go to site Show details
NZD 0 Same day NZD 0.00 0.725 USD
7,252
XE has fast transfers with competitive rates and a range of foreign currency tools. Go to site Show details
NZD 2,000 2 days NZD 0.00 0.726 USD
7,260
Exclusive offer: Discounted exchange rates for all Finder customers.
WorldFirst sends 60+ currencies at competitive rates. If you find a better eligible quote, WorldFirst will beat it.
Go to site Show details
NZD 250 1 day NZD 0.00 0.726 USD
7,260
TorFX guarantee to beat any competitor's exchange rate for a transaction. Conditions apply.
TorFX sends money overseas in 30+ currencies, with competitive rates for transfer amounts over $2,000.
Go to site Show details
NZD 1 Within an hour NZD 3.99 0.725 USD
7,246
Use promo code 3FREE to send your first 3 transfers with no fee. Conditions apply.
WorldRemit sends money to 110+ countries for bank-to-bank deposits, cash pick-ups or mobile top-ups.
Go to site Show details
NZD 1 1 - 2 days NZD 80.00 0.729 USD
7,231
Wise uses the mid-market rate and transparent fees to help you send money in 45+ currencies. Go to site Show details
NZD 5 1 - 2 days EUR 3.00 0.723 USD
7,232
Special offer: Zero fees on your first 10 transfers.
CurrencyFair has bank-beating exchange rates and fast transfer times on 15+ popular currencies.
Go to site Show details
NZD 10,000 1 - 2 days NZD 0.00 0.723 USD
7,231
CurrencyTransfer lets you shop around for the best exchange rate on its online marketplace. Go to site Show details

Compare up to 4 providers

Disclaimer: Exchange rates change often. Confirm the total cost with the provider before transferring money.

Frequently asked questions

More guides on Finder

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked
Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use, Disclaimer & Privacy Policy.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site