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PayPal vs Australian 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 30 October 2018.

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 charges a flat fee of $5.99 for sending money overseas. If you pay by credit or debit card, there’s going to be another 2.6% 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 scenario, 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 Australian bank
Exchange rate1 AUD = 0.60 EUR1 AUD = 0.58 EUR
Transfer fee$5.99$18
Transfer speed1 business day3 to 5 business days
Transfer optionsBank transferBank transfer
Total euros receivedEUR€596EUR€570
Receiver getsEUR€26 moreEUR€26 less

The result? A transfer through PayPal results in your recipient receiving EUR€26 more. We can also see that PayPal offers a fairer exchange rate and fee for this particular transfer.

Which offers better exchange rates?


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 AUD = 0.62 EUR
  • PayPal’s exchange rate might be 1 AUD = 0.60 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 AUD = 0.62 EUR
  • Your bank’s exchange rate might be 1 AUD = 0.58 EUR

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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?


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?


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.

Learn more about using PayPal to send money abroad

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.

Name Product Minimum Transfer Transfer Time Transfer Fee
1 - 2 days
USD 3.99
Use promo code FREE to send your first transfer with no fee. T&Cs apply.
WorldRemit sends money to 110+ countries for bank-to-bank deposits, cash pick-ups or mobile top-ups.

Compare up to 4 providers

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