Discover the side of these two providers that many overlook.
PayPal vs. Travelex: How they work
While PayPal and Travelex are both online-only processes, they each work a little differently.
You’ll need to register for a free PayPal account before you can send money using it. Once you’re logged in, simply choose who you want to send the money to via the email or mobile number associated with their PayPal account (also referred to as a PayPal wallet) and choose how to fund it. Some locations don’t require the recipient to have a PayPal account and can have the funds transferred directly to their bank account by using PayPal’s service Xoom.
Travelex also requires that you create an account. You may need to verify your identity with Travelex, a process that can take one to several business days. Once the account is fully verified you can start sending money. You’ll need to enter your information as well as your recipient’s information, including their bank account details. Only bank-to-bank transfers are accepted.
Who offers lower fees?
If you’re sending a personal transfer to any country other than Canada, you’ll find there may be a fee that varies based on your payment method and the country you’re sending it to. The highest fees come with using a credit or debit card or PayPal credit to send funds to any country except Australia, which is 3.9% of the transaction amount plus a fixed fee based on the currency. You can find the full table and list of fees on our full review.
Travelex has a very clear-cut fee structure of $5 for any transfer under $5,000, and no fee for transfers over $5,000.
Travelex takes this one easily with a straightforward fee structure that keeps costs low for senders.
Our Pick: Choose from a range of services with Travelex
Travelex simplifies money matters overseas. Get currency before you go or get money when you're there with a transfer or cash passport.
- Send international money transfers over $500.
- Bring a pre-loaded cash passport with you on your trip.
- Order foreign currencies before your overseas trip. That's one less thing to worry about.
- Sell your leftover foreign currency back to Travelex when you return from your trip.
Who offers better exchange rates?
PayPal receives a wholesale rate quote twice per day from its bank. Add 2.5% to the rate received, and that’s used for all transactions that require a currency conversion. Here’s an example of what it might look like if you sent money to Australia:
- If the mid-market rate is 1 USD = 1.26 AUD
- PayPal’s exchange rate may be 1 USD = 1.23 AUD
Currency rates are updated live throughout the day on Travelex’s International Payments site. You’re able to lock-in rates with a spot trade and take out forward contracts and limit orders. Travelex also provides the International Payment Price Promise wherein if you get a better rate within 30 minutes of placing your order, Travelex will exceed that competing rate. Using the same example of sending money to Australia:
- If the mid-market rate is 1 USD = 1.26 AUD
- Travelex’s exchange rate may be 1 USD = 1.24 AUD
Despite having similar exchange rates, Travelex pulls ahead with its forward contract and limit order options, as well as its best-price guarantee.
Transfers take only minutes to go through to a recipient’s PayPal wallet. From there it usually takes a business day to transfer from the recipient’s PayPal wallet to their bank account.
You can expect the funds to transfer in two to four business days with Travelex.
Instantaneous is hard to beat — PayPal easily takes the win this round.
Who has more options?
|Payment methods||Minimum and maximum transfers||Delivery methods||Transfer speeds||Countries and currencies|
|PayPal||Bank account, PayPal balance, PayPal credit, debit and credit card||Minimum varies by country; no maximum when sending to PayPal wallet, $10,000 maximum otherwise||PayPal wallet; some locations offer direct-to-bank transfer, cash pickup, mobile phone reload and home delivery||Minutes to 1 business day for wallet transfers||200+ countries and 24 currencies|
|Travelex||Bank transfer||$500 minimum; no maximum||Bank transfer||2–4 business days||50 countries and 46 currencies|
Case study: Sending $4,000 to the PhilippinesJess needs to send $4,000 to her cousin in the Philippines. After consulting with her cousin, they decide PayPal or Travelex will probably be better than going through her cousin’s bank. Here’s what a bank-to-bank transfer using PayPal and Travelex to get money from the US to the Philippines might look like.
|PayPal via Xoom||Travelex|
|Exchange rate||1 USD = 50.62 PHP||1 USD = 50.12 PHP|
|Transfer speed||5 days or less||4 days or less|
|Total received||202,480.00 PHP||200,480.00 PHP|
PayPal and Travelex have similar transfer speeds, so it comes down to which service gets more money to Jess’s cousin at less of an expense to her. PayPal wins out by delivering $2,000 Philippine pesos more for a cool cent less than Travelex.
Travelex wins out when it comes to a clear fee structure, but PayPal offers instant delivery. Your needs will dictate which is the better service in terms of saving you money and getting the most to your loved ones.
You’ll find much more than just these two transfer companies out there. Take the time to compare your options before you settle to find the one that serves you best.