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.
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.
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% |
Companies compared to banks and PayPal
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.