What is PayPal?
PayPal has been at the forefront of digital payment solutions since its inception in the mid-2000s. Designed to simplify and streamline online payments, this global financial services company now operates in over 200 countries. The widespread integration of this payment system has made PayPal a familiar and reliable service used by more than 300 million customers.
Predominately functioning as a digital wallet and eCommerce platform, PayPal accounts can be used to send, spend or receive payments for personal or business reasons. Funds are loaded onto the account balance using a bank account, credit or debit card.Once registered, customers can access their secure online account via the PayPal website or mobile app, which is available to download for free on iOS and Android.
What is PayPal used for?
There are two main customer account profiles for PayPal: Personal and Business. It is easy to send money to people you know who also have active PayPal accounts through the Friends & Family feature, one of PayPal's most popular services. Other products and services include:
Digital wallet: PayPal provides online access to funds held in your PayPal account
In-store purchases: PayPal can be used for in-store payments anywhere using the PayPal Here POS system
Online purchases: These payments are covered by PayPal Buyer Protection
Pay in 3: PayPal purchases can be split into three interest-free monthly payments at millions of online retailers
PayPal Credit: PayPal offers a digital line of credit as well as physical credit, debit and prepaid cards
Online money transfers: PayPal makes it possible to send and request money transfers with friends and family or clients and colleagues
How long does a PayPal International Transfer take?
International Transfers sent from one PayPal account to another are typically processed instantly or within at least 24 hours. Processing International Transfers whereby money is withdrawn from your bank account, credit or debit card before being transferred to a bank account can take between 4 – 5 working days.
How much does a PayPal International Transfer cost?
Although domestic transfers sent through PayPal are free, PayPal International Transfers are not.In fact, PayPal often faces criticism for charging high percentage fees and less than competitive exchange rates. Common costs include:
Exchange rate - A profit margin of 2.5% to 4.5% will be taken from the mid-market rate, depending on the sender's country and the receiving currency
Transfer fees - 5.00% of the transaction amount is added on top of the total amount as a transfer fee
Conversion fees - International transfers which require currency conversion typically incur a 3% charge
What are the alternatives?
To avoid the excessive costs charged by PayPal, we recommend utilizing the services of specialist money transfer companies. Unlike PayPal, which offers a range of financial products and services, money transfer operators focus solely on providing speedy, secure, low-cost remittance advice and services to their customers. Every company has its own niche, and in the following section, we will provide a pick of the best options for anyone looking for an alternative to PayPal International Transfers.
OFX
OFX has an excellent reputation, offers 24/7 customer service and is ideal for anyone frequently sending money overseas. There is no maximum transfer limit for remittances sent using OFX, with many products tailor-made to suit the financial needs of small to medium-sized businesses. Key selling points include...
Transfer fees– There are zero transfer fees with OFX. Unlike with other money transfer companies, the amount you send will maintain its original value.
Exchange rates - In comparison to PayPal’s mark-up of 5%, OFX mark-ups range between 0.4% and 1.5% which is far more reasonable.
No hidden additional costs - Whether processed by intermediary or correspondent banks, OFX international will attract no extra charges; unless the destination country is Japan or South Africa.
Wise
This UK-based company is widely revered for matching the exact mid-market rate when it comes to cross-border transfers. Highly rated by users, with well-rounded customer support options, it is no surprise Wise has maintained the title of the UK’s leading money transfer company. Key selling points include...
Transparency - Any fees or extra costs are clearly displayed throughout the process, whereas PayPal is not entirely transparent regarding total fees.
Multiple transfer options - Wise offers a range of different transfer types depending on customer priorities. These include Fast and Easy, Low-Cost and Advanced options.
Pay in different ways - Wise accepts bank transfers, debits cards, credit cards, ACH bank debit, Bank wire transfers, and even Facebook Messenger for money transfers to Australia, the UK, Canada and Europe.
Summary
PayPal is such a widely used, well-known payment provider that many people resort to using it for International Transfers. In a bid to educate our customers on the various options available, we wanted to create this comprehensive guide to more affordable, highly rated alternative money transfer services. If you are unfamiliar or unsure about any of the companies mentioned in this guide, why not check out our in-depth reviews of OFX or Wise. We thoroughly research and analyze the offerings of every money transfer operator in an effort to provide our customers with all the need-to-know information. You may also want to use our comparison engine to weigh up your options and guarantee the best possible international transfer for your money.
