PayPal is one of the most well-known names in the money transfer industry. The American company was originally founded as “Confinity” in 1998. Now, it’s one of the most widely recognized and accepted payment methods online.
In addition to its merchant services, PayPal has also become a common tool for international money transfers. The company is well-known for its security, ease of use, and acceptance as a payment method. So, let’s look at how PayPal international money transfers compare.
Like other international money transfer services, PayPal charges a mix of fees and an exchange rate margin.
PayPal charges a margin on all currency exchanges. Their exchange rates are above the mid-market rates, meaning that it produces a “hidden” cost not reflected when you confirm a transaction. You will only see the difference when you compare the rates PayPal offers you with the mid-market rate. You can find the mid-market rate for your currency exchange transaction with a quick Google search.
Exact exchange rate margins depend on the currencies used in the transaction. Let’s look at a common example: exchanging US Dollars USD for Euros (EUR).
At the time of writing, the mid-market rate for USD 1 would get you EUR 0.84. With PayPal, the rate is USD 1 for EUR 0.81. This demonstrates a currency conversion cost of approximately 3%. This rate is fairly high for currency exchanges.
At the time of writing, the mid-market rate for USD 1 would get you XCD 2.70 (East Caribbean Dollar). With PayPal, the rate is USD 1 for XCD 2.61. This demonstrates a currency conversion cost of approximately 3%. This rate is also high for currency exchanges.
Most of PayPal’s exchange rates fall within a similar range. PayPal claims a flat 3% rate for all currency conversions. This seems to be consistent.
You can expect to be charged 3% in exchange rate margins. However, keep in mind that these rates may be subject to change at any time. For example, US users were subject to increased exchange rates in 2019.
When it comes to payments, rates are higher but more transparent than with similar services.
In addition to exchange rate markups, PayPal also charges a transparent transfer fee for each transaction.
There is a fixed fee for sending money. That base fee depends on the currency you’re sending them. You will then be charged 1% of the transfer amount, with a maximum of $10.
When a recipient withdraws money from their PayPal account to their bank, they will be charged a flat 2.50% fee. If the currency they receive via your PayPal transfer is different from their local currency, they will also have to pay currency conversion costs.
PayPal’s costs add up to a sum that is higher than average in the money transfer industry. When you combine all the costs of sending money, you can spend 5% of the transaction balance if you send small amounts of money. But because the transfer fee is capped at $10, larger transfers are cheaper to make. But either way, you’re paying more than you would with many other money transfer providers.
You can open a PayPal account in any of the 200+ countries supported by PayPal. This covers the vast majority of the world’s countries and population.
Yes. You can download the PayPal app from Google Play or the App Store.
After your account is verified, there are no ongoing maximum transfer limits. However, there is a single-transaction limit of $10,000 in the US. Most limits are similar to the US limit when measured in USD. However, each currency has its own single-transaction limit.
PayPal transfers between accounts take no more than 30 minutes. However, withdrawing funds from your PayPal account into your bank account can take between 2 and 5 business days.
The PayPal cards don’t carry minimum fees or balances and don’t require credit checks.
Opening a PayPal account is easy. You just need to follow a few simple steps:
Once your PayPal account is set up, you can start sending money right away.
No, you cannot directly transfer money to the recipient’s bank account. However, the recipient should have a bank account attached to their PayPal account. So, after they receive your funds, they can withdraw them from their PayPal account and into their bank account.
PayPal offers one of the most widespread, secure, and trusted platforms for sending money internationally. It’s an expensive option, but it’s not the most expensive international money transfer service on the market. You also get a lot of utility and good customer support when you use PayPal. In addition, PayPal is one of the more widely accepted payment options for online transactions around the world.