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Is PayPal more cost effective than money transfer providers?

PayPal provides worldwide payment solutions for a variety of online transactions, from making a purchase to arranging cross-border remittances. In this guide we will be deliberating how much PayPal transfers cost when compared to the services of specialised money transfer providers.

Updated: 19/05/2021
Read time: 4 minutes
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About PayPal

PayPal is one of the major success stories to come out of Silicon Valley. Having launched as a digital wallet at the beginning of the turn of the century, PayPal has transformed into a multifunctional payments platform over the course of two decades. Now with a giant customer base of around 400 million, PayPal is used by retailers, business owners, freelancers and individuals for sending, spending, managing and requesting funds online.

Customers can set up their own account in a matter of minutes using the PayPal website or app. The popularity of PayPal as a payment method is largely due to its wide-spread integration which makes it a familiar and convenient brand to use. 

For many, the accessibility of PayPal is enough of a reason to use the platform for international money transfers, but we want to take a closer look at the cost-effectiveness of this service.

What are the main advantages of PayPal money transfers?

PayPal is the world’s most widely used payment acquirer, having processed upwards of $936 billion in payments in 2020 alone. In addition to its global presence, the main advantages of sending money with PayPal include:

  • Money can be sent to recipients who do not have banks accounts
  • Domestic transfers to Friends and Family are free of charge
  • Most money transfers are processed instantly
  • Bank accounts and card details are protected from identity theft
  • Easy-to-navigate interface for both desktop and mobile use

Are there transfer limits for PayPal transfers? 

There is no minimum transfer amount for remittances arranged through PayPal, but the maximum limit is $60,000 per transfer. This is more than most individual clients send for personal payments, but may not be sufficient for business owners or corporate clients.

How much does a PayPal money transfer cost?

PayPal fees are not cheap which is why some customers are put off by the idea of using the company for international money transfers.

While domestic transfers are fee-free and instant, funds transferred to a different currency will incur charges of 3% per transaction. 

In addition to this, a further transfer fee of 2.9% is also added to the total amount; this is referred to as the processing commission fee. 

Depending on the amount of money that is transferred, these costs can add up to a great deal more than what customers originally anticipated.

Are money transfer providers more cost-effective? 

PayPal adds incremental fees during each step of the international money transfer process. Conversely, most money transfer providers implement flat-fee rates to every payment as well as more transparent and favourable currency conversion rates: resulting in far cheaper deals overall. The most cost-effective money transfer providers include…


This money transfer provider is the most cost-effective alternative to PayPal. Customers are likely to pay an estimated 6% in added fees when arranging international transfers through PayPal, but OFX does not charge any fees. As well as zero transfer fees, OFX exchange rate mark-ups range between 0.4 – 1.5% which is more than half of PayPal’s currency conversion fee.


If PayPal is your go-to provider for ease of access due to its global presence, then this money transfer provider is a good alternative. As a leader in global remittances this company facilitates cross-border payments to more than 150 countries worldwide. WorldRemit’s far-reaching network includes over 30,000 agent locations which offer pay-out options including cash pick-ups, home delivery and mobile money.

Learn all about WorldRemit by reading our review


Unlike PayPal, this money transfer provider does not implement a maximum limit per transaction. Further to this, the company charges zero fees and instead makes a small profit from the exchange rate spread between interbank rates and the rate it charges its customers (typically only 1 – 2%). Therefore TorFX is the ideal solution for business owners, corporations and even individual customers that frequently transfer large sums of money abroad, as the danger of being stung with hidden fees is removed entirely.

Bottom line

While PayPal is certainly a reliable and easy-to-use payment solution for sending money among friends and family, it is not the most cost-effective option for anyone who is converting currency and transferring funds overseas. 

Instead of relying on PayPal’s familiar interface and functionality, save money by exploring your options. We have created a guide to PayPal Alternatives for International Transfers which may prove useful for many customers looking to save money. Furthermore, our comparison engine searches for the best money transfer deals on the market, to find low-cost and low-risk companies who specialise in cross-border payments which suit your needs.

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April Summers

April is a journalist and full-time content writer for MoneyTransfers.com. Over the last decade she has written for a number of different online and print publications. Having lived overseas in Canada and Vietnam, April hopes to see more of the world as soon as possible, with Japan at the top of her travel list. As a former expat, April has first-hand experience of managing finances from overseas. She enjoys writing about forex trends and the future of banking.

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