8.1
Overall
PayPal was first founded in 1998 as an e-wallet service, and describes itself as a “smarter way to send and receive money online”. As well as sending money to friends and family, PayPal is also popularly used to pay for online goods and services.
While PayPal’s currency conversion service is only a branch of the many services the company offers, it nevertheless supports over 20 currencies across the globe. In 2015, PayPal acquired the digital-led money transfer company, Xoom.
Quick summary: Western Union wins
Our Western Union vs PayPal comparison has found that Western Union offers faster transfer times, more favourable exchange rates, and lower fees than PayPal. While PayPal does have it's advantages for more convenient transfers domestically, Western Union is the better choice for international transfers.
Which brand has lower fees?
PayPal’s fees vary depending on where you are sending your money as well as the total sum you are sending. For currency conversions to the US, Canada, and Europe, you’ll be charged a fee of £0.99 for any amount under £49.99, and £1.99 for transactions £50 and over. For the rest of the world, you’ll instead be charged £3.99 for transactions £100 or more.
✅Verdict: There are too many variables
Between PayPal vs Western Union, Western Union places too many variables on their fee structures to draw a direct comparison. In addition, both companies add a markup on the exchange rate when you transfer your money with them, which can significantly impact the amount you are charged overall for your transfer.
Which brand offers better exchange rates?
PayPal’s exchange rate tends to be around 3.5% - 4% according to their website, although this depends on the currency and the sum you are sending. When you are initiating a transfer with PayPal, although you are shown the exchange rate you will be getting, you are not clearly shown the markup on the mid-market rate.
✅Verdict: It’s a tie - the exchange rate markup varies on a number of factors
Again, it’s difficult to draw a direct PayPal vs Western Union comparison based on exchange rates because of the ambiguity about the margins added to each transfer depending on where you are sending to, from, and the amount you are sending. In the case studies below, we’ll be able to draw more direct comparisons using specific examples.
Which brand covers more locations?
PayPal’s service is available in more than 200 currencies, but at the moment they only support currency conversions to 25 currencies.
✅ Verdict: Western Union wins
With more currencies supported and thousands of physical agent locations, Western Union is the clear winner here when it comes to international transfers.
Which is faster?
PayPal’s transfers can take minutes, or up to 3 - 5 working days. With currency conversions, this largely depends on whether you already have the funds in your PayPal account, or if you need to first withdraw from your bank account before the transfer can be processed.
✅Verdict: It depends on the circ*mstances of your transfer
When compared Western Union vs PayPal, both of the providers can send your money within minutes or within a couple of working days depending on the specific circ*mstances of your transfer. Generally, however, if you are sending smaller sums of money, both providers are a good option for instant transfers.
Which brand offers more transfer & payment options?
PayPal’s payment options include:
Bank transfer
Credit card
Debit card
PayPal transfer
Pay-out options are either a bank deposit, and transferring to the recipient’s PayPal account.
✅Verdict: It’s a tie - but Western Union alone offers cash pickups
Between Paypal vs Western Union, both operators offer a fairly diverse range of payment and payout options, but it should be noted that Western Union alone offers cash pickups as a delivery method, which may have a big appeal to some.
What do users have to say about each brand?
PayPal has over 13,000 reviews on Trustpilot, with an overall ‘Bad’ rating of 1.2 out of 5. It’s worth noting that these reviews cover all of PayPal’s services, not just their international transfer service, so the reviews may not give a fully accurate picture.
Amongst negative reviews, users frequently refer to unfair charges, funds being paused or lost, and poor customer service. Elsewhere on the internet, users frequently recommend other money transfer services to avoid the poor exchange rate and high fees PayPal attaches to its services.
✅Verdict: Both have mixed reviews
As two industry giants operating in the money transfer space for decades, it's unsurprising that both providers have their fair share of mixed reviews when comparing Paypal vs Western Union. We should note, however, that PayPal's reviews are based on the full range of services the company offers, whereas Western Union's user reviews are focused on their international transfers service.
What brand offers better ease of use, accessibility & security?
PayPal’s app is available in 17 different languages and is also available on iOS and Android with positive reviews. The app allows you to send and receive money, view your balance, and add or withdraw money from your account.
For support with your account, PayPal has a large resource centre designed to address most frequently asked questions. In addition, you can also use their messenger function to talk with a customer service agent.
PayPal takes several steps to secure your account. First, your account is password protected with a number of security questions in place to help you regain access to your account if your password is lost.
Additionally, the provider uses advanced encryption technology to protect every transaction it processes, with a 24/7 security operation to identify and prevent fraud.
✅Verdict: It’s a tie
Between Western Union vs Paypal, both industry giants have a good range of languages and support available in line with their global reach, making sending and receiving money more convenient for people all over the world. Additionally, both companies have multiple steps in place to protect and secure your account when completing a transaction.
Additional features
PayPal, in addition to being a popular service for sending money to friends and family both domestically and internationally, is also commonly used for e-commerce. Users will pay for online goods, services, and subscriptions via a PayPal account rather than entering your card details directly into the retail provider’s website. PayPal can also be used to set up a regular subscription, granting access to a merchant to access your account rather than setting up a direct debit with your bank.
Case study: sending a variety of amounts
For this case study of Paypal vs Western Union, we’ll look at the fees, exchange rate, and transfer times sending various amounts from the UK to Spain.
Sending £200
When sending money with PayPal, no clear breakdown is provided regarding the fees that are added to your transaction. Sending this sum with PayPal, at the time of writing would give you an exchange rate of 1 GBP = 1.0547 EUR, with the total received by the recipient being 210.96 EUR.
Sending £1,000
Again, no transparent breakdown of the fees added to this currency conversion are given, but sending this sum would give you the same exchange rate as above with PayPal. Your recipient would get a total of 1054.79 EUR.
Sending £20,000
You would be given the same exchange rate as the above two sums with PayPal when sending £20,000 (1 GBP = 1.0547 EUR at the time of writing), and the total amount received by your recipient would be 21095.89 EUR.
✅Verdict: Western Union has better rates
From this case study, it’s clear to see that Western Union’s rates mean that your recipient ends up with more of the money you are sending. This, combined with Western Union’s flexible payment options and the option for cash pickups, makes it the far more versatile choice.
Final Verdict: PayPal or Western Union?
In terms of international transfers between Western Union vs Paypal, Western Union offers faster transfer times, more favourable exchange rates, and lower fees, making it the clear winner between these two industry giants.
With that said, however, you will often find more affordable deals with other money operators, so it’s well worth comparing all of your options before making your final decision.
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FAQs
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