Western Union vs PayPal money transfers
We compare a popular service with a digital giant to see which is better for overseas transfers.
Western Union is nearly synonymous with international money transfers. And then there’s electronic payment giant, which also allows you to send money overseas. Which is cheaper and faster for sending funds to friends, family and businesses outside the UK?
The fees and rates used in this comparison are accurate as of 18 February 2019.
Which has lower fees?
Western Union’s fees for sending money from the UK start from £2, but in some cases can run up to £15 or higher.
The fee varies a lot by situation – your destination country, chosen currency, amount transferred and payment method will all affect the total fee. There is typically an additional charge for credit card payments.
PayPal charges a flat fee of £2.99, but you’ll be charged an extra fee if you’re paying by card (how much depends on the currency you’re sending to).
There are certain situations where PayPal fees will be higher than Western Union’s for the same transfer, but these tend to be very specific situations.
In most cases it’s likely to cost less in fees to send money from the UK with PayPal than Western Union. To find the actual cheaper option, though, you’ll also need to factor in exchange rates.
Case study: Sending £1,000 to Germany
Kendra wants to send £1,000 to her friend in Munich ahead of Oktoberfest. With so many locations worldwide, she thought she’d give Western Union a try. Then her friend suggested she look into PayPal.
Here’s what it’d look like to send a £1,000 bank-to-bank transfer with Western Union and PayPal.
|Transfer fee||£0||£20 (2.0%)|
|Exchange rate||1 GBP = 1.097 EUR||1 GBP = 1.057 EUR|
|Transfer speed||2 business days||Instantly|
|Total received||1,097 EUR||1,056 EUR|
Kendra won’t pay any fees to transfer her money with Western Union, and with the stronger exchange rate it offers, it will allow her to send about 40 more euros to her friend. That’s a few more steins of bier to enjoy.
Which offers better exchange rates?
Western Union’s currency exchange margins vary widely depending on the currency and the situation. In general, the margin added onto the exchange rate can vary from 2% to 6%. If you’re sending a large amount overseas, this means hundreds of dollars that goes straight into Western Union’s coffers.
PayPal’s margin, like Western Union, depends on what currency you’re sending to. In general:
- To USD or CAD: 3.5% added to the exchange rate
- To other currencies: 4% added to the exchange rate
There are no clear winners here. It all depends on the situation and either can be cheaper or more expensive than the other.
Which is faster?
The speed of your transfer is mostly dependent on the transfer method. Cash pick-up or mobile money app deposits can be available in just a few minutes, while bank account transfers might take several days.
PayPal money transfers might take a week or more end-to-end, depending on circumstance and destination.
If you don’t already have funds in your PayPal account it might take several days to top it up, and after that it might take another few days to finish the transfer.
Winner: Western Union
Western Union offers payments within minutes, although it costs extra and won’t necessarily be suitable for every situation. Its bank transfers will typically take several business days to clear. PayPal’s bank transfer speeds are similar, with the added burden of needing to top up or link your bank account first.
If you want to get verified and send money as fast as possible, Western Union has a clear advantage over PayPal.
|Payment methods||Receiving options||Maximum and minimum transfers||Transfer speeds||Currencies|
|Western Union||Bank transfer, cash, credit and debit card||Bank account, cash pick-up, mobile money app||Minimum: £1|
|PayPal||PayPal account, bank transfer, credit and debit card||PayPal account, bank transfer||Minimum: £1|
With Western Union, you go to its site, enter how much you’re transferring and confirm how you’re sending it and how it should be received. You also have the option of visiting or calling an agent.
Once you’ve approved the exchange rate and fees you’ll pay, Western Union converts and delivers your money to your recipient’s bank account or for cash-pickups at locations worldwide.
To transfer money through PayPal, you’ll need to create a free PayPal account. You then send a transfer to your recipient’s PayPal account, funding the transfer with your PayPal balance, bank account, credit or 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.
The most cost-effective and convenient option will depend on the circumstance. If you’re paying by card, it’s worth being aware of the additional fees this incurs at both PayPal and Western Union.
Similarly, it’s worth checking the exchange rates for your currency ahead of a transfer. While PayPal’s rates are fixed at a set amount above mid-market, Western Union’s will vary widely from currency to currency.
Looking for more options?
Use our calculator below to compare fees, exchange rates and transfer speeds of other international money transfer services. Just enter the details in the calculator to see what fees and exchange rates you would get.
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