PayPal international fees in the UK: You can skip them altogether

8 minute read

TransferWise is here to help people like you move your money around the world at costs fair to you. We think you’ll be interested to know how we can help you cut some of your costs. But more on that later.

Regardless, making international money transfers with PayPal can be a confusing process, especially when you try to decipher the international fees included. And if your payment involves more than 1 currency or country, PayPal clearly states that you’ll face charges.

For many people, when they start to delve into the UK PayPal fees involved in an international transaction, it becomes tough to decipher.

On PayPal’s UK cross border fees page, the fees break down like this:

  • Fee 1: Cross border payment fee + Fixed fees (based on the currency received)
  • Fee 2: Currency transfer & cross border commercial payment fees (for business payments)
  • Fee 3: Currency conversion fee

At our count, there can be up to 3 different fees for a single international transfer. And while the costs are all shown on Paypal’s website, it can be a bit overwhelming figuring out what your final fee will be.

And, as a heads up, this article focuses on UK-based PayPal accounts. For more information on the fees applied on US-based PayPal accounts, check out this great article instead.

Sending money to or from the UK? TransferWise could save you. A lot.

Before you get started, a word.

Banks and money transfer providers often give you a bad exchange rate to make extra profits.

TransferWise is different. Its smart new technology skips hefty international transfer fees by connecting local bank accounts all around the world. Which means you can save up to 8x by using TransferWise when you send your money abroad.

Independent research has even shown that, on average UK PayPal business users can save 9x more by using TransferWise.

Check out how to make your first transfer with TransferWise. And give it a try.

Oh, and while you’re at it, check out TransferWise’s free borderless multi-currency account. Where you can manage and send dozens of currencies all from the same account. With no monthly fees.

Now, back to what you came here to read.

Read on to find out a bit more about PayPal’s fees. And why we think TransferWise can save you even more when you send money abroad.

(Source 1 Source 2 20 October 2017)

Fee 1: PayPal Cross Border Payment Fee + Fixed Fee

For these fees, they can be paid by either the sender or the recipient, but not both. Luckily for you, if you’re the sender, you can choose who does the paying for them.

The payment fee itself depends on both the sender and recipient’s country, and they vary quite a lot. If you’re paying from your PayPal balance or your bank account you’ll pay less, from 0.3% to 3.3% of the total sent.

If you pay for even part of the transfer with your debit or credit card, however, you’ll pay a higher percentage fee that ranges from 3.7 - 7.4%. Not to mention you’ll also need to pay a fixed fee based on the recipient currency.

(Source 20 October 2017)

Fee 2: PayPal Currency Transfer & Cross Border Commercial Payment fee

Wait. Another cross-border fee? Didn’t we just look at one?

Not to worry, this fee seems to only happen in instances where goods or services are being paid for. If the transfer is just between friends and family, meaning it isn’t a business transaction, then you shouldn’t have to bother with this.

This fee gets tacked on to the seller, aka the recipient of the payment.

PayPal specifically notes the following in regards to their currency transfer & cross border commercial payment fee:

Fees for receiving payments from buyers outside your country, are based on the fees for receiving domestic commercial payments with: The percentage based element increased by the Cross Border Fee outlined in the table below. The fixed fee element based on the currency received or set out in the fixed fee table below.

If your first instinct was to read that, re-read it, read it again, and then try to pop it into Google translate to try to figure out what it means, you’re not alone.

In plain English, it seems to say “Hey, recipient, because you’re selling something, add on a little extra percentage to what was already charged in the previous fees. Plus a fixed fee.”

How much additional would TransferWise charge you because this is a business payment?


Just because you’re offering goods or services, why should TransferWise take an extra cut? We shouldn’t. You earned that money. So keep it.

(Source 20 October 2017)

Fee 3: PayPal currency conversion fee

This one gets even more confusing.

Fees for converting your balance or payments that you receive into another currency: 2.5% above the wholesale exchange rate. Fees for all other transactions involving a currency conversion (For example: sending payments not in UK sterling): [follow PayPal’s table]

If your payment involves a conversion from one currency to another, PayPal says they’ll take an extra 2.5% markup above the wholesale exchange rate. This can hurt. And when an independent consumer research company did a few case studies with the cost of sending money abroad with PayPal business, it turns out that the exchange rate markup seemed to be even higher.

And, further, if it happens that the recipient wants a currency that isn’t local to his country — say if someone wanted US$ in Brazil instead of Brazilian real — then the markup is even higher. The chart shows a range from 3 - 4%.

(Source 20 October 2017)

TransferWise vs PayPal? How we’re different.

PayPal has done an incredible job of connecting people and money from all around the world. But the fact of the matter is still that if you’re someone who regularly sends payments across borders from the UK, their fees can really sting.

This is where TransferWise can help.

You don’t need to link your bank account to TransferWise

For some countries, like the US and Canada, you’ll have an option to link your bank account to TransferWise. (In fact, you can link multiple bank accounts if you want.) But it’s almost never necessary. And in most countries, like the UK, it isn’t even an option. Every time you make a transfer, you can choose how you want to pay. Credit card, debit card, TransferWise balance, or a local bank transfer or two from your bank(s). It’s your choice. And your account.

Your recipient doesn’t need a TransferWise account to receive money

We don’t force anyone to sign up for something they don’t need, or won’t use. If you’re sending money to Granny and she’s never used the internet, have no fear — your grandma won’t need to make a TransferWise account. You’ll be depositing money straight into her local bank account.

TransferWise pays out the majority of your transfers locally, in the local currency, cutting out the usual cross-border and international banking fees

Smart new technology connects TransferWise local bank accounts all across the world. So if you send a transfer to Australia, your money arrives in Australian dollars to your recipient, via a local bank transfer, from our Australian account. Send money to the US, it’ll come from a TransferWise bank account in the States in US dollars.

You get the picture.

This means your recipient shouldn’t pay any international fees to get their money. Like in these real life business examples comparing TransferWise and PayPal business transfers.

TransferWise believes you deserve the same exchange rate that major players on global trading platforms get

A vast majority of big banks and money transfer platforms take a little extra from your international transfer by giving you a different exchange rate than the one you find online.

Some are upfront about it. Some list it out in the fine print. Some list it in a PDF with addendums and sections and legal jargon that’s hard to sort through. Some even conveniently leave it out of the conversation altogether. But, rest assured, it’s most likely there. You’ll just have to look for it.

PayPal themselves note that they charge you 2.5% above the wholesale exchange rate to convert your received money into another currency.

If you compare the exchange rate you find online to the exchange rate you’re offered by a provider — even taking fees into account — you’ll likely find there’s still a chunk of your cash missing every time.

But just because you don’t have access to hundreds of thousands of dollars you can trade on the global financial market, this doesn’t mean your money should be worth any less than if you were a high street bank or another major player.

TransferWise believes both you and your money are just as worthy as a big businesses. Which is why we offer the mid-market rate to all our customers.

The mid-market rate is called by all kinds of names — spot rate, interbank rate, wholesale rate. Whatever it’s called, though, it’s a rate that banks and financial players use to trade amongst themselves. And it’s the same rate we offer to our customers. Our exchange rates are updated minute to minute, independently provided by Reuters, and you’ll find it’s the same exchange rate you’d find when you do a Google search or by using an online currency converter.

We think that’s fairness at its best.

Finally, TransferWise doesn’t hide your transfer fees behind private sign-ins or tiny print on hard-to-find pages

Life is already complex, so why do costs need to be the same? With TransferWise, our small, fair transfer fee is spelled out up front. Right from the start. No sign-ups. No sign-ins. No haggling. No obfuscated information behind frustrating paywalls or telephone calls.

Which means there are never any surprises, and no confusion about what you’ll be charged. Unlike many other transfer services and banks, you can check our prices without even having an account with us. We have a dedicated pricing page so you’ll know exactly what to expect.

We’re advocates for transparency, so much so that we’ve started petitions and conversations with governments all over the world in an effort to hold financial institutions accountable on what they charge consumers. We feel it’s time that banks and money transfer services become more transparent about their own exchange rate markups and charges. Don’t you?

(Source 20 October 2017)

If you’re still not sure if PayPal or TransferWise is the one for you, split your next transfer in two. Send half with TransferWise and half with PayPal. See what you end up with in the end.

We’re pretty sure you’ll find out yourself how much more you can save with TransferWise.

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