/Guides/Money transfer companies vs PayPal vs Banks

Money Transfer Companies, PayPal and Banks Compared

When sending money the type of company you pick can have a big impact on the total cost.

This page shows the data around sending money with a money transfer company, bank or PayPal. Based on real data, this will show the actual cost of using each.

Keith Hodges
Author 
Keith Hodges
4 minutes
September 26th, 2024
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In short, money transfer companies are the cheapest and fastest way to send money. Against banks and PayPal, you can expect to save around 3 to 5% of the total transfer amount.

The reality is using PayPal or a bank is likely going to be more expensive than using a money transfer company. They are also both slower than a transfer company.

When sending money internationally, it can be easy to default to using a bank or PayPal.

Using a bank or PayPal is convenient if you already have an account. It feels like a case of a few clicks and there’s an element of trust associated with using existing tools.

Exchange rates, fees and transfer speed, all play a role in why a money transfer provider is the best option.

Each has an impact.

Cost differences

Overall cost of a transfer

For an average transfer, we have outlined the amount received per company type. This is based on the best price and includes the cost of exchange rates and fees.

From

To

Amount sent

Money transfer company

Using your bank

PayPal

USA

Euro

$2,000

€1,811

€1,749

€1,741

UK

Euro

£2,000

€2,364

€2,282

€2,271

UAE

Euro

10,000 AED

€2,465

€2,381

€2,322

Canada

Euro

1,500 CAD

€996

€963

€961

Australia

Euro

1,500 AUD

€909

€875

€816

The mid-market rate (MMR) is the cost of each currency against another. The exchange rate are how much third parties charge on top. This is presented as a percentage.

Company

Average exchange rate

Money transfer company

0% to 1.5%

Using your bank

2% to 5%

PayPal

3.5% to 5%

These are the fees charged to carry out an international transfer. These can be set, or as a percentage of the total send amount.

For PayPal, it’s actually both.

Company

Fee for sending internationally

Money transfer company

Often no fees, usually under 0.5% if not

Using your bank

Averages of $25 / £25 / 60 AED / 15 CAD / 6 AUD

PayPal

3.49% to 5% (max $4.99)

We have broken down bank fees for international money transfers here.

Some transfers are listed as instant, but this may also be listed in ranges from hours to days. We have given averages of these transfers. It's always best to search routes.

Company

Average speed

Money transfer company

0 - 2 days

Using your bank

1 - 5 days, can be up to 5

PayPal

0 - 2 days

This is based on how many choices you have, more choice generally leads to better pricing.

Company

Total companies

Money transfer company

100s of providers on the market offering competitive rates

Using your bank

1 option if you cannot open a new account

PayPal

1 option, without alternatives

Receiving money from abroad can also be costly if you do it in the wrong way.

Company

Fees

Money transfer company

No fees

Using your bank

Around $15 / £7 / 100 AED / 15 CAD / 15 AUD

PayPal

1%

Receiving money from abroad can be expensive, here’s how you can reduce the cost.

Your options

Companies compared to banks and PayPal

Need a quick recommendation? ⚡

Smaller, regular transactions: Wise: Digital accounting offering low cost and some of the fastest transfer speeds.

Bigger transactions: Regency FX: A currency broker offering great pricing and hands on service. Particularly useful for property purchases and business transfers.

Company

Key features

Rating

Pricing

Wise

Comes with a multi-currency account for spending, 96% of transfers on the same day, Supports over 70 currencies

⭐⭐⭐⭐⭐

No exchange rate + fees of 0.35% - open an account

Zing (UK users)

Hold over 20 currencies, Spend globally with a multi-currency card, Part of the HSBC group

⭐⭐⭐⭐⭐

No exchange rate + fees of - 0.2% - open an account

TorFX

Perfect for large transfers, Offers forward contracts, UK based account management team, App for regular sending

⭐⭐⭐⭐⭐

No fees + competitive rates agreed per transfer - get a quote

RegencyFX

Currency exchange specialists, Great for large transfers, Regular payments supported

⭐⭐⭐⭐⭐

No fees + competitive rates agreed per transfer - get a quote

Revolut

Strong P2P sending options, Hold over 30 currencies, Also acquiring global banking licenses

⭐⭐⭐⭐

Exchange rate from 0.4% (+1% at weekends) + no fees - open an account

Xe

Fast transfers, 24/7 support, App with rate alert and currency tools included

⭐⭐⭐⭐

No fees and rates from 0.6% - open an account

OFX

24/7 customer support, App for regular payments, Currency risk tools like forward contracts

⭐⭐⭐⭐

No fees and rates from 0.5% - open an account

There’s other benefits

Using a money transfer company has a few other benefits to be aware of.

  • Multi-currency banking and domestic payments: Accounts, like Wise or Revolut will provide access to local currency accounts. This means you can send money through them, but also spend on physical or virtual cards. This is great for people travelling or for regular subscriptions. With high PayPal transaction fees, this is a great option. Although, for everyday spending in your home country, you may as well keep your local bank account.

  • P2P options: Customers can get faster transfers when sending to another user on the same platform. This is because the money doesn’t have to leave the network of the provider at all. For regular payments to friends and family, it can pay to have the same app.

  • Earn rewards and interest: Wise and Revolut offer interest on balances. So storing money in money transfer wallets can be a great idea. This is generally higher than a traditional bank, and isn’t offered by PayPal.

Using a money transfer company over banks

When you can save money:

You can save money on any type of international transfer when using a money transfer account. To recap, they’re cheaper and faster than both PayPal and banking options for sending money.

When it probably isn’t necessary to:

If you want to make domestic transfers, your bank would suffice. There’s no need to complicate things by adding additional accounts.

Always compare
We always recommend comparing, we will give you the price for banks, PayPal and money transfer companies.
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Contributors

Keith Hodges
Keith is a content manager for SendAbroad.com. His goal with the site is to ensure people can make informed decisions about international money transfers.
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