The main difference between Western Union and Paypal is that PayPal supports currency conversions to 25 currencies while Western Union supports international transfers in 130 currencies.
Western Union and PayPal are both industry giants in their own right and popular choices for sending money across borders. The question is, which is better?
Both providers have their individual advantages and downfalls, and in this Western Union vs Paypal comparison, we’ll be looking at a range of elements to help you decide which provider is the best option for you.
PayPal was first founded in 1998 as an e-wallet service, and describes itself as a “smarter way to send and receive money online”. As well as sending money to friends and family, PayPal is also popularly used to pay for online goods and services.
While PayPal’s currency conversion service is only a branch of the many services the company offers, it nevertheless supports over 20 currencies across the globe. In 2015, PayPal acquired the digital-led money transfer company, Xoom.
Quick summary: Western Union wins
Our Western Union vs PayPal comparison has found that Western Union offers faster transfer times, more favourable exchange rates, and lower fees than PayPal. While PayPal does have it's advantages for more convenient transfers domestically, Western Union is the better choice for international transfers.
PayPal’s fees vary depending on where you are sending your money as well as the total sum you are sending. For currency conversions to the US, Canada, and Europe, you’ll be charged a fee of £0.99 for any amount under £49.99, and £1.99 for transactions £50 and over. For the rest of the world, you’ll instead be charged £3.99 for transactions £100 or more.
Western Union’s fees can vary depending on a number of factors, including the country you are sending to, the currency pair, the sum you are sending, your payment method, and your chosen delivery method.
✅Verdict: There are too many variables
Between PayPal vs Western Union, Western Union places too many variables on their fee structures to draw a direct comparison. In addition, both companies add a markup on the exchange rate when you transfer your money with them, which can significantly impact the amount you are charged overall for your transfer.
Which brand offers better exchange rates?
PayPal’s exchange rate tends to be around 3.5% - 4% according to their website, although this depends on the currency and the sum you are sending. When you are initiating a transfer with PayPal, although you are shown the exchange rate you will be getting, you are not clearly shown the markup on the mid-market rate.
Western Union’s exchange rate margin isn’t always clear, and can change depending on the same factors listed above (the currency pair, the sum you are sending, delivery methods etc). However, Western Union seems to add a markup of around 3-6% on top of the mid-market rate for most transfers.
✅Verdict: It’s a tie - the exchange rate markup varies on a number of factors
Again, it’s difficult to draw a direct PayPal vs Western Union comparison based on exchange rates because of the ambiguity about the margins added to each transfer depending on where you are sending to, from, and the amount you are sending. In the case studies below, we’ll be able to draw more direct comparisons using specific examples.
Which brand covers more locations?
PayPal’s service is available in more than 200 currencies, but at the moment they only support currency conversions to 25 currencies.
Western Union supports international transfers to over 200 countries in 130 currencies and has over 500,000 agent locations.
✅ Verdict: Western Union wins
With more currencies supported and thousands of physical agent locations, Western Union is the clear winner here when it comes to international transfers.
Which is faster?
PayPal’s transfers can take minutes, or up to 3 - 5 working days. With currency conversions, this largely depends on whether you already have the funds in your PayPal account, or if you need to first withdraw from your bank account before the transfer can be processed.
Western Union’s transfer time can take anywhere from minutes to up to 7 working days. If you select a cash pickup as your delivery method, your transfer will typically be processed quicker, whereas bank deposits can take more time. The sum you are sending can also affect transfer times, with larger amounts taking longer to process.
✅Verdict: It depends on the circumstances of your transfer
When compared Western Union vs PayPal, both of the providers can send your money within minutes or within a couple of working days depending on the specific circumstances of your transfer. Generally, however, if you are sending smaller sums of money, both providers are a good option for instant transfers.
Which brand offers more transfer & payment options?
Payout options are either cash pickups, or via bank deposit.
✅Verdict: It’s a tie - but Western Union alone offers cash pickups
Between Paypal vs Western Union, both operators offer a fairly diverse range of payment and payout options, but it should be noted that Western Union alone offers cash pickups as a delivery method, which may have a big appeal to some.
What do users have to say about each brand?
PayPal has over 13,000 reviews on Trustpilot, with an overall ‘Bad’ rating of 1.2 out of 5. It’s worth noting that these reviews cover all of PayPal’s services, not just their international transfer service, so the reviews may not give a fully accurate picture.
Amongst negative reviews, users frequently refer to unfair charges, funds being paused or lost, and poor customer service. Elsewhere on the internet, users frequently recommend other money transfer services to avoid the poor exchange rate and high fees PayPal attaches to its services.
Western Union has over 17,000 reviews on Trustpilot and an overall ‘Average’ rating of 3.3 out of 5. Users frequently praise several features Western Union offers, including:
The convenience of agent locations
Easy international transfers
Affordable fees
However, as such a large company, it’s perhaps unsurprising that Western Union does receive its share of negative reviews. These are often attributed to lost or delayed transfers, a lack of available customer service agents, and expensive exchange rates.
✅Verdict: Both have mixed reviews
As two industry giants operating in the money transfer space for decades, it's unsurprising that both providers have their fair share of mixed reviews when comparing Paypal vs Western Union. We should note, however, that PayPal's reviews are based on the full range of services the company offers, whereas Western Union's user reviews are focused on their international transfers service.
What brand offers better ease of use, accessibility & security?
PayPal’s app is available in 17 different languages and is also available on iOS and Android with positive reviews. The app allows you to send and receive money, view your balance, and add or withdraw money from your account.
For support with your account, PayPal has a large resource centre designed to address most frequently asked questions. In addition, you can also use their messenger function to talk with a customer service agent.
PayPal takes several steps to secure your account. First, your account is password protected with a number of security questions in place to help you regain access to your account if your password is lost.
Additionally, the provider uses advanced encryption technology to protect every transaction it processes, with a 24/7 security operation to identify and prevent fraud.
Western Union’s app is available in English, Spanish, and Mandarin. It’s available on both iOS and Android with overall positive reviews for making international transfers more convenient on the go.
In addition, their website is accessible to a wide number of different countries, with the multiple agent locations the provider has across the globe making face-to-face transfers equally as accessible.
For security purposes, Western Union does have a verification process to keep your account safe. This typically requires users to upload a valid form of ID, although you may only be asked to complete this step if you are sending a large sum.
In addition, Western Union has implemented Software Composition Analysis (SCA). This is a customer authentication security layer applied to both payment booking and account access and manipulation. It is part of the two-factor authentication (2FA) security protocol.
✅Verdict: It’s a tie
Between Western Union vs Paypal, both industry giants have a good range of languages and support available in line with their global reach, making sending and receiving money more convenient for people all over the world. Additionally, both companies have multiple steps in place to protect and secure your account when completing a transaction.
Additional features
PayPal, in addition to being a popular service for sending money to friends and family both domestically and internationally, is also commonly used for e-commerce. Users will pay for online goods, services, and subscriptions via a PayPal account rather than entering your card details directly into the retail provider’s website. PayPal can also be used to set up a regular subscription, granting access to a merchant to access your account rather than setting up a direct debit with your bank.
The main feature that makes Western Union so unique is it’s 500,000 agent locations based all over the world. This makes cash pickups extremely accessible for the 200 countries the provider supports transfers to and from, and is also an appealing feature for customers who prefer dealing with an agent in person for money transfers rather than only relying on an app.
Case study: sending a variety of amounts
For this case study of Paypal vs Western Union, we’ll look at the fees, exchange rate, and transfer times sending various amounts from the UK to Spain.
Sending £200
When sending money with PayPal, no clear breakdown is provided regarding the fees that are added to your transaction. Sending this sum with PayPal, at the time of writing would give you an exchange rate of 1 GBP = 1.0547 EUR, with the total received by the recipient being 210.96 EUR.
Sending £1,000
Again, no transparent breakdown of the fees added to this currency conversion are given, but sending this sum would give you the same exchange rate as above with PayPal. Your recipient would get a total of 1054.79 EUR.
Sending £20,000
You would be given the same exchange rate as the above two sums with PayPal when sending £20,000 (1 GBP = 1.0547 EUR at the time of writing), and the total amount received by your recipient would be 21095.89 EUR.
Sending £200
Sending this sum with Western Union would have an exchange rate of 1.00 GBP = 1.0925 EUR at the time of writing if you select for your recipient to receive the funds via their bank account. Fees would range from £0 if paying from your bank account, up to £1.90 if you pay with credit/debit card.
Interestingly, Western Union’s exchange rate changes if you select for your recipient to receive the funds in cash. Paying by bank transfer would give you an exchange rate of 1.00 GBP = 1.0295 EUR with a fee of £2.90, while paying via card would have a fee of £4.90 and an exchange rate of 1.00 GBP = 1.0345 EUR. Equally, paying in cash would incur a fee of £19.90, with another change in the exchange rate to 1.00 GBP = 1.0196 EUR - this would need to be organised at an agent location in person.
Total received with a bank to bank transfer would be 218.21 EUR.
Sending £1,000
Fees for sending £1,000 vary from £0 - again, for a bank deposit paid for from your bank account, to £2.90 for a bank deposit paid for by card, with an exchange rate of 1.00 GBP = 1.0942 EUR at the time of writing. Cash pickups again are given a range of exchange rates and fees depending on what payment method you choose. Paying by card or bank transfer incurs a fee of £4.90 and an exchange rate of 1.00 GBP = 1.0345 EUR, while paying by cash would have a fee of £24.90. This transfer would typically take no more than one working day.
Total received would be 1092.69 EUR.
Sending £20,000
Sending this sum to Spain from the UK is higher than the country’s transaction limit, which can vary depending on the destination, sum, payment method, and agent location limits.
✅Verdict: Western Union has better rates
From this case study, it’s clear to see that Western Union’s rates mean that your recipient ends up with more of the money you are sending. This, combined with Western Union’s flexible payment options and the option for cash pickups, makes it the far more versatile choice.
Final Verdict: PayPal or Western Union?
In terms of international transfers between Western Union vs Paypal, Western Union offers faster transfer times, more favourable exchange rates, and lower fees, making it the clear winner between these two industry giants.
With that said, however, you will often find more affordable deals with other money operators, so it’s well worth comparing all of your options before making your final decision.
If you are looking for a money transfer company better than Western Union, consider going with Wise. They provide instant transfers that do not charge a fee when a currency conversion is not involved. Also, their commitment to transparency means you can readily compare the FX rates and fees with alternative money transfer companies.
Additionally, Wise offers one of the best user interfaces in the industry. This ensures you can learn to use the platform effectively from day 1. Also, they are regulated by the Financial Conduct Authority and have a TrustPilot score of 4.5 out of 5. Therefore, you can trust the platform to provide a safe and secure money transfer service.
Can you use more than one money transfer provider?
There is no issue with using more than one money transfer company. In fact, we recommend that you use several transfer providers because:
Best fees and FX rates: You can compare the fees and FX rates of several money transfer companies before sending money. This enables you to use the service that offers the best deal when you need to use a money transfer service. Over time the quality of the deals changes between providers, so you need to compare constantly.
Unique features: Many transfer providers offer features that most competitors do not. For example, WorldRemit has 30,000 locations for cash pick-up, while Xe is considered the authority for FX rates in the industry.
Less risk: You might feel that holding all your money with a single money transfer company is risky. Therefore, spreading your funds over several services reduces the risk of having your account frozen or losing money due to a scam.
How fast is a Western Union transfer?
Western Union money transfers are processed at different speeds based on the method used. For example, cash pick-up transfers takes around a few minutes before the recipient can collect the money. However, bank deposits can take 1-7 business days.
Consider using Wise for their fee-free instant balance transfers when no currency conversion is required. In most cases, this transaction type is processed within a few seconds, and a handy notification system keeps the sender and recipient informed.
Are there different money transfer providers by country?
Every country has a unique selection of money transfer companies that can be used for creating an account and sending money internationally. Therefore, you need to research the available options in your location and register with the top choice. Pay attention to the specific limitations of sending money to each country. Some might have transfer limits or be limited by the payment methods.
The number of variables that determine the cost of PayPal and Western Union is far too many to determine which one is cheaper. It depends on the countries involved in the transaction, the currencies, amount, and transfer method. Overall, both companies have similar fees when sending money internationally.
To save money, consider using services like Wise, it is considered the cheapest way to send money abroad. They match the mid-market rate for currency transfers and offer low fees. Alternatively, for fee-free business transfers, you can choose Currencies Direct. This service also comes with a high Trustpilot score and an excellent reputation on social media platforms.
Is it better to use a challenger bank or money transfer provider for international transfers?
There are a lot of similarities between challenger banks and money transfer providers, but the former tries to mimic the range of services offered by traditional banks. On the other hand, money transfer providers specialize in sending money internationally. This means they focus on providing the lowest fees and expanding their network to include more countries.
Therefore, money transfer providers are the better choice for sending money internationally. That is because you will get better FX rates, lower fees, and other features that improve the overall experience.
Zelle and Venmo are popular payment providers for customers based in America. Both companies exclusively handles domestic money transfers, a deal-breaker for anyone hoping to send money overseas. If international money transfers are on the agenda, you will need to look elsewhere as both Zelle and Venmo handle US-only transactions. Find out How to Transfer Money Within the USA.
In a bid to find out which brand is the better option for sending international money transfers, we will be exploring each area of Zelle and PayPal’s financial services.
Yasmin is an accomplished Content Writer and Editor for MoneyTransfers.com, who specializes specializing in personal finance, student life, and business topics. Her reputation as a financial authority is acknowledged by top publications such as BBC Worklife, Cash Matters, Yahoo Finance, and CEO Blog Nation, which have featured her as a trusted source. She is also the founder of The Wallet Moth, a popular blog focusing on money and lifestyle.
Yasmin is an accomplished Content Writer and Editor for MoneyTransfers.com, who specializes specializing in personal finance, student life, and business topics. Her reputation as a financial authority is acknowledged by top publications such as BBC Worklife, Cash Matters, Yahoo Finance, and CEO Blog Nation, which have featured her as a trusted source. She is also the founder of The Wallet Moth, a popular blog focusing on money and lifestyle.
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