MoneyGram vs PayPal
MoneyGram Key Features
- International brand
- Lots of cash pick up locations
PayPal Key Features
- Security and fraud protection
The main difference between Moneygram and PayPal is that PayPal adds a markup to the exchange rate margin of about 3.5 – 4%, depending on the currency while MoneyGram exchange rate margins vary depending on the currency pair you are transferring.
If you’re looking for the best way to send money abroad, your research will have undoubtedly lead you to online money transfer providers. In the past couple of decades, digital transfer providers have popped up all over the globe, providing more competition to keep international transfers quick, easy, and affordable.
MoneyGram and PayPal are two giants of the industry, each serving millions of customers around the world. The question is, which of the two is best for sending money? In this Moneygram vs Paypal comparison, we’ll help you find out exactly that.
At a Glance
- About MoneyGram and PayPal
- Which brand has lower fees?
- Which brand offers better exchange rates?
- Which brand covers more locations?
- Which is faster?
- Which brand offers more transfer & payment options?
- What do users have to say about each brand?
- What brand offers better ease of use, accessibility & security?
- Additional features
- Case study: sending a variety of amounts
About MoneyGram and PayPal
MoneyGram was first founded in 1940 in Dallas, Texas. The company now supports transfers to over 200 countries with over 350,000 agent locations worldwide.
In recent years, MoneyGram has also made efforts to modernise its services with an online focus, with 70 countries now digitally enabled for online money transfers.
PayPal was founded in 1998 in California, USA. It was first launched as an e-wallet service and was later acquired by eBay in 2002 before becoming independent again in 2015.
PayPal describes itself as a “safer, simpler, smarter way to send and receive money online”. As well as giving users the ability to send money to friends and family with an account, PayPal can also be used to make online purchases and sign up for subscription services.
Quick Summary: MoneyGram Wins
Overall, MoneyGram has better exchange rates, lower fees, more positive user reviews, and faster transfer times than PayPal. This, in addition to the fact that MoneyGram offers cash pickups as a delivery method, makes it the clear winner in this Moneygram vs Paypal comparison – but that doesn’t mean it’s always the best service for your transfer needs.
Which brand has lower fees?
Moneygram’s fee structure is dependent on a number of factors, including:
The location you are sending funds to
The type of payment you opt for
The amount you are sending
Whether you are sending in a single or multiple currencies
As an example, if you were to send $200 to Singapore using Moneygram, the fees would be $4.99 for a cash pickup paid for by debit or credit card or by bank transfer. Paying by cash at an agent location, however, may mean you are charged a different fee.
PayPal charges fees for sending your money internationally, as well as for converting the currency, with fees mostly dependent on:
Where you are sending fund to
PayPal refers to its fees as a ‘cross-border personal transaction fee”. For the US, Canada, and Europe, PayPal will charge £0.99 for transactions under £49.99, £1.99 for transactions between £50 or over. For the rest of the world, the fees are £0.99 for anything £49.99 and under, £1.99 for transactions between £50 – £99.99, and £3.99 for transactions £100 or more. However, PayPal will also charge a percentage-based fee on top of this.
The two companies have very different fee structures that are largely dependent on the individual circumstances of your transfer, so it’s difficult to draw a direct Moneygram vs Paypal comparison. In addition, the exchange rate margin each company adds onto the mid-market rate can make a big different to the total sum your recipient receives.
Which brand offers better exchange rates?
The exchange rate margins MoneyGram charges depends on the currency pair you are transferring between, as well as other variables such as the amount you are sending.
If you were sending from GBP to EUR, for example, you could expect to be charged around 5.05% above the mid-market rate, while sending to AUD would have margins about 4.23% above the mid-market rate. Compared to newer money transfer operators, these markups are relatively high.
PayPal is fairly upfront about its currency conversion fees on its website. You can typically expect to receive an exchange rate margin between 3.5 – 4%, depending on the currency – although it should be noted that the exact markup is not displayed when you are in the process of making a transfer.
For example, sending from GDP to AUD would have a mark up of 4%, while converting GDP to USD would have a margin of 3.75%. Compared to other money transfer providers, this is an uncompetitive exchange rate.
While PayPal has the better exchange rate margins objectively, it’s worth bearing in mind that PayPal does also charge a percentage-based fee for international transfers (its cross-border conversion fee), which can significantly affect how much you are charged for a transfer. In the case studies later on in this Moneygram vs Paypal comparison we’ll examine this in more detail.
Which brand covers more locations?
MoneyGram is available in over 200 countries and 50 currencies, with 70 of those countries digitally enabled. MoneyGram also has over 350,000 agent locations worldwide.
PayPal is available in more than 200 countries, but they only support 25 currencies at the moment.
Both companies support a wide range of countries across the world, but MoneyGram has the ability to support transfers to double the number of currencies than PayPal, which makes it clearly superior in this category.
Which is faster?
Transfers with MoneyGram can be ready in minutes (especially for smaller sums or cash pickups), whilst a bank transfer can take up to 5 working days.
If you need to request for the person you are sending the funds to create a PayPal account or need to first withdraw your funds from your bank account, the transfer can take between 3 – 5 days. However, if you are sending money to someone who already has a PayPal account, the transfer should be instant.
Both companies are capable of instant transfers under the right circumstances (smaller sums, and paying by card/PayPal account), but transfers can equally be delayed several working days if you are sending larger sums or withdrawing directly from your bank account. We choose MoneyGram, just.
Which brand offers more transfer & payment options?
MoneyGram allows you to pay for online transfers by:
Bank account (US only)
Cash if you’re visiting an agent location directly
Transfer options are dependent on the country you are sending to. Where allowed, you can decide to transfer the funds to your recipient’s bank account, mobile wallet, prepaid card, or organise a cash pickup.
PayPal’s payment options include paying by:
Bank transfer
Credit card
Debit card
PayPal transfer
You can select for your recipient to receive the funds either by bank transfer or by PayPal account transfer.
If you are mainly looking to send money abroad directly to your recipient’s bank account, both providers offer a good range of payment options – although both parties will need a PayPal account for this provider to work best. However, for those looking to send money that can be picked up in cash on the other end, MoneyGram is the only one out of the two that has this service.
What do users have to say about each brand?
MoneyGram UK has over 1,400 reviews on Trustpilot with an overall ‘Great’ rating of 4.2 out of 5. The US version, MoneyGram US, has over 3,800 reviews on Trustpilot with an overall ‘Great’ rating of 4 out of 5. Positive reviews often mention MoneyGram’s fast transfer times, affordability, and convenient service.
More negative reviews include criticism for transfer times taking longer than expected, negative experiences with customer service, and account closures.
PayPal has over 13,000 reviews on Trustpilot with an overall ‘Bad’ rating of 1.3 out of 5. It’s worth bearing in mind that these reviews are not just aimed towards PayPal’s services as an international transfer provider, but directed towards PayPal’s service as a whole.
Amongst negative reviews, users frequently refer to unfair charges, funds being paused or lost, and poor customer service.
When comparing Moneygram vs Paypal, MoneyGram has far more positive reviews than PayPal online, with frequent praise for its low rates and fast transfer times. It’s worth bearing in mind that PayPal’s reviews are reflective of all the services that they provide, rather than simply focused on their currency conversion capabilities.
What brand offers better ease of use, accessibility & security?
MoneyGram supports over 7 languages on its app including English, Dutch, and Spanish. The app is available on iOS and Android and receives generally positive reviews, providing a more convenient way for users to transfer money on the go.
MoneyGram has a large resource centre on their website to provide assistance for frequently asked questions and also provides the option to fill out a form online if you need more in-depth help with your transfer.
The service uses a number of verification and security processes to keep your money safe. You will typically be asked to authenticate your identity by uploading a photo of your passport on the app.
PayPal is accessible to a wide range of countries, supporting 17 different languages. The app is available on both iOS and Android, allowing you to view your balance, add and withdraw money, and send money. The app receives good reviews for its convenience and ease of use.
PayPal has a large help centre on its website as well as a community forum designed to address and solve any problems that users may have. In addition, you can also contact customer service via a messaging function on the website.
PayPal uses advanced encryption technology in order to protect every transaction it processes. It also has security questions in place that you can use if you forget or lose your password, although you can also contact customer service to regain access to your account.
Both companies have made respectable efforts to make their websites and apps accessible and convenient for users, and both have overall positive reviews on the app stores they are available on. Equally, both companies are regulated and enforce multiple layers of security to ensure your account and money stays protected.
Additional features
An additional feature that some users may like is MoneyGram’s Plus Rewards program. This gives regular users to earn rewards every time they send money, such as a 20% discount on your second transfer, ‘members-only- promotions, and a 40% discount off of every fifth transfer.
In addition to payments for friends and family, PayPal’s main territory is in e-commerce. It is most widely used as a method to pay merchants for goods online – to do this, you can authorize a seller to use your PayPal account, or designate a monthly payment for a subscription service.
Case study: sending a variety of amounts
Sending £200
Sending this sum with MoneyGram would incur a fee of £3.99 if paying by bank transfer or card, with an exchange rate of1.0000 GBP = 1.6920 SGD (at the time of writing). The total received would be 338.40 SGD. You could expect this transfer to be processed between 1 – 3 days.
Sending £1,000
This sum would leave your recipient with 1,692.00 SGD, with a total estimated cost to you of 1,003.99 GBP. The exchange rate would remain the same as when sending £200.
Sending £20,000
The limit for this transaction is 6000.00 GBP, so you would not be able to send this large a sum with MoneyGram.
Sending £200
If using PayPal, you would be given a conversion rate of 1 GDP = 1.6746 SGD (at the time of writing), with PayPal’s currency conversion fee included in that rate. In total, your recipient would receive334.93 SGD.
Sending £1,000
You would be given the same exchange rate as above for this sum, with the transfer likely to take between 3 – 5 days. Your recipient would get 1674.64 SGD.
Sending £20,000
Again, for this sum, you would get the same exchange rate and currency conversion fee (percentage-based) added to your transfer. Your recipient would get a total of 33492.73 SGD.
From this case study, we can see that in the two smaller transfers, MoneyGram leaves you with more funds going to your recipient, which for many, is the top priority. Therefore MoneyGram stands out as a clear winner here in every amount except for the larger sum. If you were looking to send a sum this large, however, it would be a good idea to look into a more specialist transfer company who can assist you with your transfer for the lowest fees.
Overall, comparing Paypal vs Moneygram, it can be said that MoneyGram does offer the more competitive service for international transfers, charging lower fees, better exchange rates, and with a generally fast transfer time.
However, you may find a better deal with another online money transfer company than either of these two transfer providers, which is why we’d always recommend comparing providers for your specific transfer needs.
