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TransferWise vs. PayPal
Transferwise is usually cheaper — but it isn't always faster.
TransferWise and PayPal are two convenient options for sending an online money transfer, but which one will net you a better deal on your next transfer?
Disclaimer: Exchange rates change often. Confirm the total cost with the provider before transferring money.
PayPal transfers may incur an additional fee depending on the currency sent. See the full PayPal fee schedule by currency.
Which has lower fees?
TransferWise
TransferWise’s fee is usually a combination of a small percentage of your transaction amount plus a flat fee.
The flat fee is between $1 and $2 for most major currencies, but can climb above the $5 mark in some cases.
Bank transfers attract lower fees than if you pay with a credit or debit card.
PayPal
PayPal’s fee structure is quite complicated. The amount you pay depends on your transfer amount, where you’re sending the money and whether you pay for the transaction with your PayPal balance, bank account or credit/debit card. Fees for transferring out of the US range from $0.99 to $4.99 USD + 2.9% of the transaction amount. There’s also a small fixed fee for sending in a foreign currency.
Winner: Tie
If paying for your transfer from your PayPal balance or bank account, PayPal’s international transfer fees can be quite competitive. However, fees quickly add up if paying with your credit/debit card, and the complicated fee structure can be difficult to understand.
TransferWise also offers minimal fees for most transactions, and offers a handy online tool to help you calculate the total cost of your transaction.
Compare fees between the two providers for your specific transaction to find the best value for money.
Let’s crunch the numbers: Sending $1,000 to the UK with a bank transfer and debit card
Let’s take a closer look at how TransferWise and PayPal compare when sending the sane amount with two different transfer methods.
Sending $1000 to the UK by bank transfer
| TransferWise | PayPal | |
|---|---|---|
| Transfer fee | $6.90 | $2.99 |
| Exchange rate | 1 USD = 0.7671 GBP | 1 USD = 0.7460 GBP |
| Transfer speed | 1–2 days | 3–5 days |
| Amount received (in GBP) | £761.81 | £743.77 |
Sending $1000 to the UK by debit card
| TransferWise | PayPal | |
|---|---|---|
| Transfer fee | $12.32 | $31.99 |
| Exchange rate | 1 USD = 0.7671 GBP | 1 USD = 0.7460 GBP |
| Transfer speed | 1–2 days | 3–5 days |
| Amount received (in GBP) | £757.65 | £722.14 |
While TransferWise had a higher fee when sending a bank transfer, its better exchange rates made it the more affordable option overall. And when sending by debit card, PayPal’s higher fees made the difference between the two more noticeable.
Which offers better exchange rates?
TransferWise
TransferWise offers international money transfers using the mid-market exchange rate. This is the rate which you see listed on Google and sites like XE, and it represents the real market value of one currency relative to another. For example, if the mid-market rate is 1 USD = 1.4974 NZD, that’s the rate you’ll get for your transfer.
PayPal
PayPal adds a margin on top of the mid-market rate. While this margin is typically smaller than that offered by the banks, it’s generally around the 3.5-4% range.
Using the same example as we did for TransferWise:
- If the mid-market rate is 1 USD = 1.4974 NZD
- PayPal’s rate might be 1 USD = 1.4570 NZD
Winner: TransferWise
TransferWise’s exchange rates are much better than those offered by PayPal, which means more of the money you send arrives in your recipient’s bank account.
Which is faster
TransferWise
Transfer times vary depending on the currency you send and the payment method you select.
While most transactions take between 1 and 2 business days, it’s possible to send funds to some destinations within minutes.
PayPal
If you’re sending from one PayPal account to another, transfers can be almost instant. But if you’re using another method, transfers take 3–5 days on average, and can sometimes take much longer.
Winner: PayPal
PayPal transfers are generally faster — but only if your recipient is happy to spend the money you send directly from their PayPal account. If they want it sitting in their bank account, you may find that TransferWise will get the money there quicker.
General features
| Payment methods | Receiving options | Minimum and maximum transfers | Transfer speeds | Availability | |
|---|---|---|---|---|---|
| TransferWise | Bank transfer, credit card, debit card | Bank transfer | Minimum: $1 Maximum: $199,999 |
1–2 days | 45+ countries |
| PayPal | Bank transfer, credit card, debit card, PayPal transfer | Bank transfer, PayPal account transfer | Minimum: $1 Maximum: $10,000 |
3–5 days | 190+ countries |
TransferWise
While TransferWise offers a handy fee and exchange rate calculator on its website, you’ll need to sign up for a TransferWise account before you can make a transfer. You can then initiate a transfer by specifying the amount and currency you want to send and providing your recipient’s bank account details.
You’ll receive email updates throughout the transfer process and can track your transaction online or using the TransferWise app.
PayPal
Before you can send money overseas with PayPal, both you and your recipient will need to have your own PayPal accounts. You can then link your bank account or credit/debit card to your PayPal account to fund your transaction.
To send a transfer, enter the email address or phone number of your recipient. You will then have to enter the details of your transaction, specify the reason why you are sending funds, and then take a moment to review the full cost of your transaction before submitting your transfer.
Bottom line
TransferWise generally offers much better value for money than PayPal on international transfers. While fee amounts often work out fairly similar between the two companies when paying from your bank account, TransferWise’s commitment to offering the mid-market rate means that more of the money you send will end up in your recipient’s pocket.
But to get the best deal on your next transfer, compare other transfer providers against PayPal and TransferWise before getting started.
Looking for more options?
Use our calculator below to compare the fees, exchange rates and transfer speeds of a range of international money transfer services. Enter your transaction details in the calculator to find out what fees and exchange rates are available.
Disclaimer: Exchange rates change often. Confirm the total cost with the provider before transferring money.
Frequently asked questions
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