PayPal vs UK banks for international transfers

Which offers the best deal for sending money overseas?

PayPal and bank transfers can get your money where it needs to go across the world. We look at PayPal vs UK banks to compare fees, rates and speeds to see which is quicker and which can save you money.

Live comparison: PayPal (incorporating Xoom), banks and a transfer specialist

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Name Product Fastest transfer Fee Key benefits Amount received
PayPal International Transfers
PayPal International Transfers
24 hours
From £0.99
Lloyds Bank International Transfers
24 hours
From £0
24 hours
Halifax International Transfers
24 hours
From £0
Within minutes
From £0

Please note: You should always refer to quotes you receive from transfer services themselves directly for exact amounts as they may vary from our estimates.

Check more services

PayPalUK bank logos
FeesUp to £2.99From £10 to £40 or more
Exchange ratesMid-market rate plus 3-5% marginMore than the mid-market rate plus margin
SpeedMinutes to 1 dayVaries by bank
Max transfer amountMaximum £20,000 per transferVaries by bank, usually with no upper limit

How do they work?

Both PayPal and major UK banks can send your money next door or around the world online.


To transfer money through PayPal, you’ll first need to create a free PayPal account. You then transfer money to your recipient’s PayPal account, funding it with your PayPal balance, bank account, credit or debit card or PayPal Credit. After the recipient gets the money, they can either keep the funds in their PayPal account or withdraw it to their bank account.

Bank transfers

Bank wire transfers are a quick, efficient way to move your money from one bank account holder to another through existing banking networks. In the past, you had to visit a bank branch to make a money transfer, but these days most banks let you transfer online or by phone. However, delivery options are typically limited to bank account deposits.

Read more about bank wire transfers

PayPal vs UK banks: Who offers lower fees?


How much it costs depends on how much money you send, where you send it and how you pay for the transfer. When you pay for an international transfer from the UK using your PayPal balance or linked bank account, you’ll pay a fee of between 99p to £2.99.

Bank transfers

While the majority of UK banks offer free bank-to-bank domestic transfers, they’re typically your most expensive option when sending money abroad.

Banks charge higher fees – anywhere from £10 to £40 or more depending on the details of your transfer – and a bigger variety of fees: incoming, outgoing and other fees. On top of high fees, they offer weaker exchange rates than money transfer specialists. They offer fewer options for recipients, typically requiring a bank account in which to receive your cash.

Trophy icon
Winner: PayPal
While bank transfer fees vary, it’s unlikely that they’ll be lower than the competitive prices on PayPal.

PayPal vs UK banks: Who offers better exchange rates?

The exchange rates for both PayPal and bank transfers depend on the mid-market rate on the particular day. Here’s what we know about PayPal and bank transfer exchange rates.


To calculate the exchange rate it offers to customers, PayPal takes the mid-market rate it gets from its bank and adds a 2-6% margin. PayPal updates this rate throughout the day.

For example, for a transfer in euros (EUR):

  • Mid-market rate: 1 GBP = 1.13 EUR
  • PayPal’s exchange rate: 1 GBP = 1.11 EUR

Bank transfers

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

Using the example of a transfer to euros:

  • Mid-market rate: 1 GBP = 1.13 EUR
  • Your bank’s exchange rate: 1 GBP = 1.08 EUR

Trophy icon
Winner: PayPal
Here again, PayPal’s exchange rates are typically more competitive than those offered by your local bank.

Example: Sending £1,000 to Germany

Here’s what you’d pay for a bank transfer with PayPal and your local bank on 28 January 2021.

PayPalMajor UK banks
Exchange rate1 GBP = 1.11 EUR1 GBP = 1.08 EUR
Transfer fee£1.99£20
Transfer speed1 business day2 business days
Transfer optionsBank transferBank transfer
Total euros received1,114 EUR1,088 EUR

The bank offers a weaker exchange rate and a much stiffer transaction fee than PayPal does. PayPal also transfers your money a day sooner.

* This is a fictional, but realistic, example.

PayPal vs UK banks: Who’s 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 2 business days, but your transfer speed will depend on your specific bank and type of account.

Trophy icon
Winner: PayPal
Even though both PayPal and bank transfers can get your money where it needs to go quickly, PayPal edges out the competition with instant transfer options between PayPal accounts.

PayPal vs UK banks: Who offers more options?

PayPalMajor UK banks
Minimum and maximum transfersVaries by country (about £1 to £1,000,000 per transaction)Varies by bank
Delivery methodsPayPal transfer, bank transfer, cash pick-upBank transfer
Transfer speedsFrom minutes to next business dayTypically within 2 business days
Payment methodsBank transfer, credit or debit card, PayPal CreditOnline, in-person, app (where available)
Countries190+ countries190+ countries

The verdict

Although much of the comparison between PayPal and bank transfers is dependant on your particular bank account, you’re probably best off looking at dedicated money transfer services instead. PayPal’s own service Xoom for example, is far cheaper than PayPal, and you’re likely to find wider currency coverage and superior forex features (like rate targets) by looking at dedicated transfer specialists.

Frequently asked questions

We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.
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To make sure you get accurate and helpful information, this guide has been edited by Joselle Delos Reyes as part of our fact-checking process.
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Written by


Kate Steere is an editor at Finder, specialising in fintech, banking and cryptocurrency. She has previously written for The Motley Fool UK and Fitch Solutions, where she covered a wide range of personal finance topics and kept a close eye on market trends. Kate has a Bachelor of Arts in Modern History from the University of East Anglia. When not working, she can usually be found curled up with a good book or heading out for a run. See full bio

Kate's expertise
Kate has written 175 Finder guides across topics including:
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