PayPal Money Transfers, Getting Too Expensive? Yeah!
Updated: Dec 23, 2020
What is the most Cost Effective way to send money to and from different countries?
Traditional banks have always been the most expensive way to transfer money.
PayPal was formed back in 1998 and was acquired by eBay in 2002. Most people are already aware of PayPal and probably have an online account. What is not so clear is that PayPal charges you extra fees and holds your money longer, much like a traditional bank.
PayPal is well known but does slip in extra fees – most of them hidden – the money transfer will end up costing more than if you used companies specializing exclusively in international money transfers.
PayPal adds an extra 2.5% to the current exchange rate.
PayPal had more customers and a market share advantage for many years. But now with the emergence of next-gen online money transfer services, people are waking up to the overall costs of their transfers.
TransferWise was launched in 2010 and now has 8 Million+ customers and has managed to quickly move up in the online money transfer business.
Ease of use, very low transfer fees, multi-currency exchanges and exceptional speed, the TransferWise Mobile App and website are at the top of the market, especially if you need the ability to “Request Money” as well as send it.
TransferWise is also cheaper when you are doing International transfers in foreign currencies. Fees for currency conversions are very low as compared to PayPal, banks and even online banks because TransferWise uses its' own accounts in the recipient's country.
PayPal Vs. TransferWise Cost Comparison
Cost Comparison Results:
TransferWise is considerably less expensive overall than PayPal. PayPal adds extra fees to the exchange rates when you send and receive international payments, making it hard to understand why your costs change.
In the Cost Comparison above, you can see the fees for a PayPal balance transfer or a linked bank account transfer costs you 5% of the transaction amount to recipients outside your country. Also, PayPal's maximum transfer amount is $10,000 whereas TransferWise does not impose transfer amount limits (but your bank typically does).
PayPal charges you fees in addition to the real exchange rate for money transfers abroad. these fees include both the transfer fee and the margin spread taken on top of the exchange rate and are between 3% and 10%. This means that sending $300 from the US to Germany could cost you as much as $30. PalPal also holds your money for longer and charges you extra if you want it in your recipient's hands sooner. Take A look at a recent Tweet on December 3, 2020 from TransferWise regarding a new charge that PayPal will pass along to its Australian small to medium enterprises (SME).
TransferWise turns out to be more cost effective overall, up to 10 times less overall than Paypal/Venmo. TransferWise has grown quickly recently and now sends over $5 Billion every month, has 8 Million customers and saves their customers over $1.5 Billion every year!
For more information on TransferWise, or when you want to Try it Free Now!