Western Union vs PayPal: Are They Still Cheap?

Need to make an international money transfer? Western Union and PayPal are good alternatives to a bank. Find out which option is cheaper and if it will suit your needs.

The Important Bits

PayPal

Safety: One of the largest payment companies in the world

Rates: Vary depending on the situation

Fees: A lot depends on the country but is usually percentage based

Speed: Usually quick but can be up to 6 business days

Service: Average customer service both on and offline

Western Union

Safety: One of the largest and oldest payment companies in the world

Rates: Vary depending on the situation

Fees: Fee vary depending on product, country etc

Speed: Also depends on the service you use but can instant

Service: Offer online, app and in-store support

The Verdict

These are two of the best known names in money transfers, but are they still a cheap way to transfer money?

In most cases - no.

Western Union is incredibly convenient and fast if you need to send cash to someone overseas in a hurry.

PayPal is incredibly quick and easy to use, particularly if the other person has a PayPal account.

While both are usually cheaper than a bank, there are now companies that do exactly the same thing, but with better exchange rates and lower fees.

If you are still keen to use either Western Union or PayPal, here is a review of both, head-to-head.

Learn more about PayPal

Learn more about Western Union

Let's have a look at them in more detail

Western Union LogoWestern Union is one of the oldest and most popular money transfer companies in the world. Founded in 1851 and formerly known as the ‘New York and Mississippi Valley Printing Telegraph Company”, their operations grew rapidly and expanded internationally. The company moved into financial services and money transfers in 2009 when it acquired Canadian global payment company Custom House.

 

PayPal LogoPayPal is one of the world's most popular payment systems used to purchase goods and pay for services. It is also a way to transfer money to people in other countries.

Safety

The Australian Securities and Investments Commission (ASIC) is the government body that ensures and regulates fair and transparent conduct of financial services. Every company offering financial services must be granted an Australian Financial Service (AFS) licence by ASIC to carry out business in Australia.

 

Western Union PayPal
Western Union Online Limited is Regulated by ASIC Regulated by ASIC
ARBN 141 662 633 Australian Financial Service Licence 304 962

Exchange Rates

Like banks, Western Union and PayPal make their money in two main ways: Firstly, the margin from which they purchase currency at a wholesale rate and the cost of currency sold on to customers. Secondly, an additional transaction fee.

In Western Union's case, the exchange rate can be widely varied, depending on the currency, country, and method of payment. The company has a price estimator on its website that allows you to look up its exchange rates.

PayPal uses a retail exchange rate, which is a comparatively poor rate. Their rate offered is the rate you would get if you bought currency at the airport, which is one of the worst ways to buy currency. If you make payment with a credit or debit card, you could choose to use the currency conversion rate determined by your card provider instead.

Before making a decision, it is important to compare live exchange rates. It is more difficult to get clear information of PayPal's rates as you can only see the converted amount afer you commit to buy.

Here are three ways to compare the rates offered by Western Union and other providers:

  1. View live rates online at Western Union
  2. Call Western Union at 1800 173 833 (within Australia)
  3. Compare exchange rates from other providers online with our comparison engine

Fees

Western Union's fee structure depends on the country, currency and the way you send money to your recipient. You can choose to send money in cash for your recipient to pick up at a Western Union branch or through a direct bank transfer.

PayPal's fees are calculated on a percentage and payment method, depending on the country. You can choose to add funds to your PayPal account or pay with a credit or debit card.

Be mindful that there could be more fees invloved than the ones mentioned here. You could be charged a cash advance fee by your card provider. In addition, your recipient's bank could charge a deposit fee or corresponding bank fee to deposit the funds.

 

Western Union PayPal
Direct transfer to bank

AUD to GBP or NZD: $15 AUD fee

AUD to INR: No fee

PayPal Balance

0.5% to 3.3% depending on the country

Recipient pick up money in cash

AUD to GBP, NZD or USD: $30 AUD fee

AUD to INR: $25 AUD

Credit or debit card

3.9% – 7.4% plus a flat fee depending on the country

How Long Does It Take To Transfer Money With Western Union and PayPal

The transfer speed depends on the amount and type of currency, country of transfer and turnaround time of your bank to clear payment.

 

Western Union PayPal
Cash:

Within minutes

Bank transfer from Australia to:

UK: 3 – 4 working days

New Zealand: 3 working days

Between 3 – 5 working days

What Currencies Can I Transfer?

For an extensive list of currencies available for transfer with Western Union and PayPal, check out our reviews for each company
PayPal Review
Western Union Review

Customer Support

Should you have any queries, you can contact Western Union at 1800 173 833 (within Australia) or +61 2 9231 9729 (outside Australia).

 

Final thoughts

These are two of the best known names in money transfers, but are they still a cheap way to transfer money?

In most cases - no.

Western Union is incredibly convenient and fast if you need to send cash to someone overseas in a hurry.

PayPal is incredibly quick and easy to use, particularly if the other person has a PayPal account.

While both are usually cheaper than a bank, there are now companies that do exactly the same thing, but with better exchange rates and lower fees.

Learn more about PayPal

Learn more about Western Union

Compare money transfer services like Western Union

The best deal for you

TransferwiseRead ReviewTotal (USD)$7,115.04Exchange Rate0.7146Transfer Fees$43.32Transfer Time1-2 DaysLearn MoreTotal (USD)$7,115.04Rate Updated less than 4 mins ago
So, sending 10,000 AUD to the United States comes to $7,115.04 including $43.32 in fees
GO TO SITE
So, sending 10,000 AUD to the United States comes to $7,115.04 including $43.32 in fees

About TransferWise

Transparency and an easy online experience are the 2 things that set TransferWise apart from the banks and other money transfer companies. If you prefer to bank online, you'll like TransferWise. Setting up an account and making a transfer is very easy. They are also very clear on the exchange rate and fees you'll pay before you make a transfer. Click here for the full review

Pros

  • Clear and transparent exchange rates fees
  • The online experience is first class
  • Like the banks, they are regulated by ASIC and registered with AFSL
  • Constantly bringing out new innovative products

Cons

  • There are currently a number of global currencies they do not currently support
  • Limited support based in Australia
  • Percentage based fee can add up on very large transfers

More trusted money transfer options

Provider Exchange Rate Transfer Fees Transfer TimeTotal (USD) Rate Updated less than 4 mins ago
TorFXRead ReviewTotal (USD)$7,110.27$4.77 more expensive Exchange Rate0.7110 Transfer Fees$0.00 Transfer Time2-3 DaysGet discounted rate $7,110.27$4.77 more expensive GO TO SITE
So, sending 10,000 AUD to the United States comes to $7,110.27 with no fees.

About TorFX

TorFX are particularly good taking care of customers over the phone but using their website isn't the easiest to use. They don't charge a flat fee which is great but it's important to consider their exchange rates. While, they don't offer fantastic rates for small amounts under $2000 , TorFX offer exceptionally good exchange rates for larger transfers to the UK, New Zealand, South Africa and Europe.

Pros

  • No transfer fees
  • Highly competitive exchange rates
  • Secure transfers with authorised
  • Assigned account manager
  • 24 / 7 Assistance
  • Available range of transfer options

Cons

  • Limited exotic currencies available
  • Exchange rates on small transfers aren't great
  • Website experience could be better
XERead ReviewTotal (USD)$7,104.55$10.49 more expensive Exchange Rate0.7105 Transfer Fees$0.00 Transfer Time2-3 DaysGet discounted rate $7,104.55$10.49 more expensive GO TO SITE
So, sending 10,000 AUD to the United States comes to $7,104.55 with no fees.

About XE

XE is a well known and trusted name in the money transfer industry. With over twenty years experience, they now help 33,000 people and 2,000 businesses make transfers each year. Over 60 currencies can be transferred with XE and they pride themselves on the free tools and transparent rates they offer. Click here to read the full review

Pros

  • Well known and trusted brand.
  • Very informative website. Extensive information on currency and money transfers.
  • XE App is available on both iOS and Android. It allows you to see the interbank rate for over 100 currencies.
  • XE themselves charge no fees for international money transfers.
  • Offers support for both individuals and businesses when it comes to international money transfers.

Cons

  • Cannot pay via cash or cheque. Must pay via bank transfer, BPay is also accepted in Australia.
  • Maximum transfer amount is $500,000USD.
  • While XE compares more than 100 currencies, there are only 60 that are available for money transfers.
WorldFirstRead ReviewTotal (USD)$7,103.12$11.92 more expensive Exchange Rate0.7103 Transfer Fees$0.00 Transfer Time2-3 DaysGet discounted rate $7,103.12$11.92 more expensive GO TO SITE
So, sending 10,000 AUD to the United States comes to $7,103.12 with no fees.

About World First

World First was founded in 2004 in the UK and has grown rapidly with offices now in the U.S., Canada and throughout Asia. They consistently receive strong customer reviews and in a recent study, 98% of their clients said they would use them again.World First have a strong online offering, particular for businesses selling online. They do provide local support as well with offices in Sydney. Click here to read the full review

Pros

  • No fees and great exchange rates
  • Safe and secure transfers
  • Regulated by ASIC and registered with AFSL
  • Great for personal and business payments

Cons

  • Does not accept BPAY, credit card, cheque or cash
  • Limited currencies available
WorldRemitRead ReviewTotal (USD)$7,064.28$50.76 more expensive Exchange Rate0.7067 Transfer Fees$3.99 Transfer Time1-2 DaysGet discounted rate $7,064.28$50.76 more expensive GO TO SITE
So, sending 10,000 AUD to the United States comes to $7,064.28 including $3.99 in fees

About WorldRemit

WorldRemit are particularly good for transfers under $10,000 to destinations across Asia, Africa and South America. Sending money online is significantly easier than using companies like Western Union or Moneygram and their exchange rates and fees are clear and transparent. With 2 million users, WorldRemit has a focus on improving access to remittances for the billions people worldwide who don’t have access to banking. Because of this, WorldRemit has a number of ways to both make and receive transfers. They concentrate on servicing individual needs as opposed to businesses. Click here for the full review

Pros

  • They have a great network in Asia and Africa and number of receiving options like cash-pick up or bank transfer.
  • They are clear about their exchange rates and fees
  • No minimum amount

Cons

  • Maximum transfer sizes for every transfer
  • No support for business customers
  • They are not licensed to provide financial advice.
OFXRead ReviewTotal (USD)$7,000.48$114.56 more expensive Exchange Rate0.7011 Transfer Fees$15.00 Transfer Time1-3 DaysGet discounted rate $7,000.48$114.56 more expensive GO TO SITE
So, sending 10,000 AUD to the United States comes to $7,000.48 including $15.00 in fees

About OFX

OFX (formally known as Ozforex) is the largest Australian owned money transfer company. It launched in 1998 and grew rapidly until finally listing on the Australian Stock Exchange in 2013. OFX excels in 2 areas – Online experience and customer service. The company was born online and continues to develop easy, intuitive products. While OFX customers do most of their transactions online, they are backed up with exceptional customer service.

Pros

  • Better exchange rates compared to banks
  • Highly safe and secure transfers
  • 1 - 2 days delivery times for most countries
  • Quick response time
  • Fantastic customer service

Cons

  • Credit cards, cheques and cash are not accepted
  • Transfers to Thailand can take up to 4 days
  • Fees for transfers smaller transfers
ANZRead ReviewTotal (USD)$6,852.00$263.04 more expensive Exchange Rate0.6852 Transfer Fees$0.00 Transfer Time1-2 DaysGet discounted rate $6,852.00$263.04 more expensive GO TO SITE
So, sending 10,000 AUD to the United States comes to $6,852.00 with no fees.
ANZ International Money Transfer is a secure and fast way to transfer money overseas.

Pros:

  • Fast transfers
  • Safe and secure
  • No fee for transfers under $10 000 via Internet banking

Cons

  • $12 fee for transfers under $10 000 via Internet banking
  • Poor exchange rates
  • 24 hour hotline not available
Commonwealth BankRead ReviewTotal (USD)$6,716.93$398.11 more expensive Exchange Rate0.6725 Transfer Fees$12.00 Transfer Time1-2 DaysGet discounted rate $6,716.93$398.11 more expensive GO TO SITE
So, sending 10,000 AUD to the United States comes to $6,716.93 including $12.00 in fees
Commonwealth Bank provides secure and easy transfers to over 200 countries and more than 30 currencies.

Pros:

  • Fast transfers+ Easy transfers
  • Security guarantee covers any losses from unauthorised transactions

Cons

  • $6 fee for transfers under $1000 via Internet banking
  • $12 fee for transfers under $1000 via Internet banking
  • Poor exchange rates
Take into account that we have not compared absolutely every bank and company in Australia. We compare the large, safe and reputable banks and foreign exchange companies that we have already researched, tested and approved. We also may receive a referral fee if you choose one of these banks or companies, but that wont affect the exchange rates or fees you get.