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.
Western Union vs PayPal: The Important Bits
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
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
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 Western Union
Learn more about PayPal
Fee Free Offer
The Currency Shop has partnered with OFX to offer fee free money transfers. Click on this offer, register your details and avoid paying a fee to transfer money overseas.
- After 20 years, OFX is one of the oldest money transfer companies and they have the expertise to go with it.
- Their rates are often better than the banks, especially for larger transfers.
- 24/7 phone support.
- They have a minimum transfer amount of $250
- Receiving or intermediary banks may charge fees on transactions
Learn More About OFX
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 Online Limited is Regulated by ASIC (RBN 141 662 633)
Paypal is regulated by ASIC (Australian Financial Service Licence 304 962)
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:
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 involved 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.
|Direct transfer to bank
AUD to GBP or NZD: $15 AUD fee
AUD to INR: No fee
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
Time For Transfer To Reach Recipient
The transfer speed depends on the amount and type of currency, country of transfer and turnaround time of your bank to clear payment.
- Cash: Within minutes
- Bank transfer from Australia to:
UK: 3 – 4 working days
New Zealand: 3 working days
- 3 – 5 working days
Should you have any queries, you can contact Western Union at 1800 173 833 (within Australia) or +61 2 9231 9729 (outside Australia).