We compare a popular provider 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 US?
|Fees||Fees start at $5||Varies by transfer|
|Exchange rates||Up to 6% above the mid-market rate||Mid-market rate plus 2.5% margin|
|Speed||Minutes up to 5 days or more||Minutes to 1 day|
|Max Transfer Amount||Varies by country||Maximum $10,000 per transfer|
|Read review||Read review|
How they work?
Western Union and PayPal both offer easy online processes to exchange and send money around the world.
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.
Who offers lower fees?
Figuring out much you’ll pay to transfer money internationally with Western Union can be muddied. Although most fees start at $5, they can be as much as $45 when paying by credit or debit card for cash pickup in certain countries. When sending money to high-traffic countries such as Mexico or India, however, some agents offer fee-free transfer options.
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 using your PayPal balance or linked bank account, you’ll pay a fee between $0.99 to $4.99 — the fee is waived if you’re sending to the US.
When you pay with a credit or debit card or PayPal Credit, PayPal charges a fee of 2.9% of the transaction amount, a fixed fee based on currency and a fee ranging from $0.99 to $4.99 depending on how much is sent.
Winner: It depends
If you’re sending smaller amounts, you could pay minimal fees with PayPal — again, depending on where you’re sending it. For larger amounts, Western Union may be a more ideal provider.
For instance, sending $100 using Western Union can cost you as much as 10%, while PayPal transfers can come up to $8.
Compare other transfer services
Who offers better exchange rates?
To understand who offers better exchange rates, you’ll need to first look at the mid-market rate. This is the true exchange rate that averages the buying and selling rate of a global currency — and the rate banks and transfer services use when they trade among themselves.
Depending on the country you’re sending money to, a typical exchange rate at Western Union could be up to 6% above the mid-market rate. If you’re sending a large amount overseas, this means hundreds of dollars that goes straight into Western Union’s coffers.
To calculate the exchange rate it offers to customers, PayPal takes the wholesale rate it gets from its bank and adds a 2.5% margin. PayPal updates this rate twice a day. But because you can’t know what PayPal’s wholesale rate is, it’s difficult to determine on your own what exchange rate you’ll get. The best way to find accurate exchange rates is by using PayPal’s currency exchange calculator, which you can find after you log in to your account.
For your typical overseas transfer, you’ll get a stronger exchange rate with PayPal.
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 Western Union.
|Transfer fee||$5||$4.99 + 0.35 EUR|
|Exchange rate||1 USD = 0.8652 EUR||1 USD = 0.9451 EUR|
|Transfer speed||6 business days||1 business day|
|Total received||860.87 EUR||940.03 EUR|
Kendra will pay a fee of $5 to transfer her money from her PayPal account. But even with the higher fee, the stronger exchange rate it offers will allow her to send about 80 more euro to her friend. That’s a few more steins of bier to enjoy.
Delivery speeds varies with transfer options. At an agent location or by phone, your transfer could be delivered in minutes (at higher costs). Your cheapest options could take five days or longer, depending on the country.
With PayPal, transferring among existing PayPal accounts is instantaneous. Payments from your PayPal account to another bank account are delivered by the next business day.
Whichever way you send your money, it’ll get to your recipient more quickly with PayPal. For deposits to an account, up to four days sooner.
Who offers more options?
|Payment Methods||Minimum and maximum transfers||Delivery methods||Transfer speeds||Countries and currencies|
|Western Union||Bank transfer, credit or debit card, cash||Minimum and maximum varies by country||Bank transfer, cash pickup, e-wallet||Varies from minutes to 5+ days||200+ countries|
|PayPal||Bank transfer, credit or debit card, PayPal credit||Minimum varies by country (about $0.02); maximum $10,000 per transfer||PayPal transfer, bank transfer||Varies from minutes to 1 business day||202 countries|
That you’ll get stronger exchange rates with PayPal is clear-cut. But depending on how much you’re sending, you could pay higher transfer fees with PayPal. Then if your recipient doesn’t have a bank account, Western Union’s cash pickup may be your best option.
Ultimately, you’ll want to compare money transfer specialists to find a provider that’s right for your situation.