PayPal changes from variable to fixed fee for sending money overseas
The move may be more beneficial to PayPal customers sending larger transfers abroad.
PayPal has changed its fee structure when sending money overseas. Previously, the online payment processor charged a variable rate when sending international money transfers. Effective April 19, PayPal is now charging a fixed rate to its customers sending money outside of the US.
Why the change for PayPal?
There will likely be speculation surrounding the new changes in its user agreement. PayPal recently announced changes to its platform in an effort to offer more transparency to its customers.
The online vendor has also previously voiced its commitment to help the world’s unbanked. Americans sent a hefty $138 billion to people in other countries last year in the form of electronic payment transfers, and much of that was sent through Paypal.
Replacing its longstanding variable rate with a fixed fee may be more beneficial for larger transfers of money through bank accounts, but smaller transfers might be more negatively affected.
The new flat fee will range from $2.99 to $4.99, depending on where the money’s sent. However, if the money is sent using a debit card, credit card or PayPal credit, an added 2.9% of the transfer amount plus a fixed fee based on the exchange rate will be charged on top of the flat fee. Since exchange rates vary from country to country, the final cost to send money overseas can be significantly different.
The change could ultimately be a good business move for PayPal since the company recently announced its partnership with M-PESA, a popular digital payments vendor in Kenya. The move allows Kenyan consumers to purchase goods from international PayPal merchants as well as sell items worldwide.
However, it’s worth a reminder that those disappointed in the new PayPal policies might find better options. There are some services that charge no transfer fees, and Walmart recently partnered with MoneyGram to offer its Walmart2World international money transfers at a flat fee of $4 to $16 depending on which country the money is sent to.
Compare some of the best international money transfer services for yourself when you visit our guide.