Transferring large amounts with First Direct
Check out our helpful guide to First Direct transfers for large amounts, including transfer times, limits and how to set up your first payment.
PayPal competitors for sending money abroad
When it comes to sending money internationally, there are several platforms that you can use. One of the most popular is PayPal. With over 300 million users globally as the first quarter of 2020, when it comes to online payment processing, PayPal is the company to beat. However, PayPal is not the only player in the block in the game of international transfers and selling online. In this article, we’ll look at some of Paypal’s competitors on all fronts, and compare how each stands when it compares to each other.
PayPal’s competitors for international transfers
Here’s a quick price comparison between PayPal alternatives for a 1,000 GBP transfer to USD
| PayPal¹ | Wise | Skrill² | Payoneer³ | World Remit⁴ | |
|---|---|---|---|---|---|
| Exchange rate mark-up | £25 | £0 | £39.99 | £20 | £16.48 |
| Fees | £3.99 | £4.44 | Free for international transfers | $0 | £2.99 |
| Speed | Instant for PayPal to PayPal or 1 - 2 business days to your bank account. | Instant transfer for most currency exchanges or between 1 - 2 business days for the rest. | 2 - 3 business days | Payoneer to Payoneer transactions are instant or 2 -3 business days for withdrawal into your bank account | Near-instant transfer or 1 - 3 business days for bank transfer |
| Recipient gets | $1213.07 | $1,244 | $1199.33 | $1224.30 | $1224.96 |
Exchange rate last updated on 6th of July
| Please note that fees can vary according to currency and country you're sending to and from. |
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When it comes to international transfers, there are several options to consider. Each of these options has different offers and areas of specialization. Let’s take a look at them.
PayPal
PayPal still remains perhaps the world’s biggest online payment platform. However, PayPal does charge a hidden markup when converting money between various currencies. This markup is between 2.5% - 4%. This means that when you send money from one currency to the other, the money gets converted at a rate that is between 2.5% and 4% lower than the mid-market exchange rate. This is on top of the international transfer fee which ranges from £0.99 - £2.99 depending on the country you’re sending from.
PayPal also charges 0.50% - 2% plus a small fixed fee extra on every transaction that you receive from other parts of the world.
| Please note that fees might be different for commercial transactions. Personal transactions are those initiated from the “Friends and Family” tab of the “Send Money” flow) to, or receive money into your PayPal account from, friends and family without making an underlying commercial transaction (that is, the payment is not for the purchase of goods or services or for making any other commercial transaction). |
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Wise
Wise is an upcoming player in the international transfer industry, disrupting the status quo in a good way. With over 4 million customers and some of the best customer service out there, many people are starting to turn to Wise. Wise’s goal is simple, to make money transfers easy and cheap, and make premium service the normal.
Wise does this by exchanging money at the mid-market rate, with no mark-up. Their fees are also very low, at 0.75% on average. Most transfers are sent instantly. The Wise multi-currency account is really easy to use and allows you to hold and receive money in over 40 currencies for free.
Skrill
Skrill is another option for making international payments online. It has an exchange rate markup of about 3.99%, and the charges for domestic transfers is a flat 2%. The most attractive thing about it, however, is that international transfers are free. It also helps that transfers to your bank accounts are processed between 2 and 3 working days. These all work together to make it really attractive
Payoneer
Payoneer happens to be a very good payment platform. It is easily accessible to businesses and individuals. Withdrawals can be made via a Payoneer debit card, which allows you to spend money right from your Payoneer account. They have a competitive exchange rate markup of 2% and charge 3% for payments via credit card. You do not pay any fees if you are paid in Dollars, Euro, Pounds, and Yen. Transactions from Payoneer accounts to Payoneer accounts are instant, and withdrawals to your bank account are processed within 2 to 3 business days. All this makes Payoneer a convenient choice for money transfers.
WorldRemit
WorldRemit charges some of the lowest exchange rates markup in the market, except for Wise. They charge a 1 – 1.5% exchange rate markup, which makes it very competitive. However, depending on the country of the recipient, a fee of £2.99 - £20.10 may be charged on top of the exchange rate mark-up. Transfers within the platform are almost instant, and it takes between 1 and 3 business days to process withdrawals to your bank account
PayPal’s Competitors for receiving money
| PayPal | Money is received in your PayPal account. | 0.50% - 2% plus a small fixed fee |
|---|---|---|
| Wise | Money can be received to Wise Multi-currency account | Recipients are charged zero fees |
| Payoneer | Money can be held in your Payoneer and then withdrawn to your bank account as you want | No fees to receive money in GBP or if coming from another Payoneer account. |
| Revolut | Money can be received into their Multi-currency account | £0.2 per transfer for local transfers above your receiving allowance and £3 per international transfers.⁵ |
When it comes to sending money abroad, you need to consider the following:
- Sending fee
- Exchange rate
- Intermediary bank fee if the provider sends your money through Swift
- Receiving fee
You can easily calculate PayPal fees for merchants with this simple PayPal fee calculator.
Some providers like Wise developed a solution to avoid intermediary bank fee and receiving fee by processing transfers locally but some might still process your transfer through Swift which doubles down the overall transaction cost so try to find a provider that will process your transfer locally without involving an intermediary.
Sources:
- PayPal website - Consumer fees
- Skrill website
- Payoneer website - fees
- Worldremit calculator
- Revolut help page
*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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