Western Union vs. PayPal: What’s the Difference?

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?

western-unionpaypal
Western UnionPayPal
FeesStarts from $50.5% to 2% of the transfer amount
Exchange ratesUp to 6% above the mid-market rateMid-market rate plus 2.5% margin
SpeedMinutes up to 5 days or moreMinutes to 1 day
Max Transfer AmountVaries by countryMaximum $10,000 per transfer

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Western Union and PayPal: How they work

MoneyGram and PayPal both offer easy online processes to exchange and send money around the world.

Western Union

With MoneyGram, 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, MoneyGram converts and delivers your money to your recipient’s bank account or for cash pickups at locations worldwide.

PayPal

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.

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Who offers lower fees?

Western Union

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.

PayPal

If you pay for a transfer with your PayPal balance or a linked bank account, you’ll pay a fee of 0.5% to 2% of the transfer amount, depending on where you’re sending it (though you’ll pay nothing to send money to Canada). If you pay with a credit card, debit card or PayPal Credit, that percentage jumps to 2.9% to 3.9% of your total transfer.

  • 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 at 3% to 6%.
Sites like Paypal for international money transfers

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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.

Western Union

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.

PayPal

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.

  • Winner: PayPal

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 MoneyGram.

Western UnionPayPal
Transfer fee$5$20
Exchange rate1 USD = 0.8652 EUR1 USD = 0.9451 EUR
Transfer speed6 business days1 business day
Total received865.20 EUR945.10 EUR

Kendra will pay a fee of $15 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.

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Who’s faster?

Western Union

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.

PayPal

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.

  • Winner: PayPal

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.
Is Western Union safe?

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Who offers more options?

Payment methodsMinimum and maximum transfersDelivery methodsTransfer speedsCountries and currencies
Western Union Bank transfer, credit or debit card, cashMinimum and maximum varies by countryBank transfer, cash pickup, e-walletVaries from minutes to 5+ days200+ countries
PayPal
Bank transfer, credit or debit card, PayPal creditMinimum varies by country (about $0.02); maximum $10,000 per transferPayPal transfer, bank transferVaries from minutes to 1 business day202 countries
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Bottom line

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.

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Min. Transfer Amount Transfer Speed Online Transfer Fee Rate Services Amount Received Description CTA Details
WorldRemit International Money Transfers
USD 1 Within an hour USD 3.99 17.545 Online, Bank Account to Bank Account, Cash Transfer MXN 87,653 Use promo code FREE to send your first transfer for no fee, to over 110 countries for bank-to-bank deposit, cash pickup or mobile top-up. Go to site View details
World First Foreign Exchange
USD 1,000 1 day USD 0.00 17.571 Online MXN 87,857 Exclusive offer: $0 transfer fee
No-limit transfers with competitive exchange rates for more than 100 currencies.
Go to site View details
TransferWise International Money Transfers
USD 1 1 day USD 75.00 17.850 Online MXN
87,910
Enjoy high maximum transfers into more than 20 currencies while saving up to 90% over local banks. Go to site View details
OFX International Money Transfers
USD 150 1 day USD 0.00 17.778 Online, Bank Account to Bank Account MXN 88,892 Send safe, no-limit transfers with no fees and competitive exchange rates. Go to site View details
HiFX International Money Transfers
USD 100 2 days USD 5.00 17.769 Online MXN 88,759 Transfer money into 20 currencies and schedule regular payments. $5 fee waived for transfers over $5,000. Go to site View details
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US International Money Transfers Offers

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HiFX International Money Transfers

Transfer money into 20 currencies and schedule regular payments. $5 fee waived for transfers over $5,000.

WorldRemit International Money Transfers

Use promo code FREE to send your first transfer for no fee, to over 110 countries for bank-to-bank deposit, cash pickup or mobile top-up.

World First Foreign Exchange

Exclusive offer: $0 transfer fee
No-limit transfers with competitive exchange rates for more than 100 currencies.

TransferWise International Money Transfers

Enjoy high maximum transfers into more than 20 currencies while saving up to 90% over local banks.

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