PayPal vs Australian banks for international transfers

We compare the digital payments giant against your typical bank transfer to see which offers the better deal.

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PayPal and bank transfers are both popular ways to get your money where it needs to go, but by comparing fees, rates and speeds, you might be able to figure out which offers the better deal.

The fees and rates used in this comparison are accurate as of 30 October 2018.

At a glance: General features

Payment methods Minimum and maximum transfers Delivery methods Transfer speeds Countries
PayPal Bank transfer, credit or debit card, PayPal Credit Minimum: $1

Maximum: $60,000

PayPal transfer, bank transfer 1 day 190+ countries
Bank Transfers Online, in person, app (when available) Varies by bank Bank transfer Typically within 2 business days 190+ countries

Which has lower fees?

PayPal

PayPal charges a flat fee of $5.99 for sending money overseas. If you pay by credit or debit card, there's going to be another 2.6% fee added on, though it could be more depending on the currency you're sending to.

Bank transfers

While most of our banks offer free bank-to-bank domestic transfers, they’re often the most expensive option when sending money internationally.

Banks charge higher fees – anywhere from $10 to $30, depending on the details of your transfer – and a bigger variety of fees. In general, there's also a sending and receiving fee, which your recipient may have to pay.

Trophy icon
Winner: PayPal

While bank transfer fees vary, for most transfer amounts it’s unlikely that you'll get anything lower than the competitive prices offered by PayPal. Remember to compare PayPal's fees against other money transfer specialists to find the best deal possible.

Let's crunch the numbers: Sending $1,000 to Germany

Let's bring this into context a little. In our scenario, we're going to send $1,000 to Germany using both PayPal and a local bank to see which is better. Keep in mind, rates vary for other countries.

PayPal Major Australian bank
Exchange rate 1 AUD = 0.60 EUR 1 AUD = 0.58 EUR
Transfer fee $5.99 $18
Transfer speed 1 business day 3 to 5 business days
Transfer options Bank transfer Bank transfer
Total euros received EUR€596 EUR€570
Receiver gets EUR€26 more EUR€26 less

The result? A transfer through PayPal results in your recipient receiving EUR€26 more. We can also see that PayPal offers a fairer exchange rate and fee for this particular transfer.

Which offers better exchange rates?

PayPal

To calculate the exchange rate it offers to customers, PayPal takes the current mid-market rate and adds a margin. PayPal updates this rate twice a day. The margin depends on what currency you're sending to, but in general:

  • To USD or CAD: 3.5%
  • To other currencies: 4%

What does this mean for you? If you want to make a transfer in euros (EUR):

  • If the mid-market rate is 1 AUD = 0.62 EUR
  • PayPal’s exchange rate might be 1 AUD = 0.60 EUR

Bank transfers

Nearly all banks skew the mid-market exchange rate for a profit, but you’ll typically pay higher margins than you would with PayPal.

Using the example of a transfer to euros (EUR):

  • If the mid-market rate is 1 AUD = 0.62 EUR
  • Your bank’s exchange rate might be 1 AUD = 0.58 EUR

Trophy icon
Winner: PayPal

Again, PayPal’s exchange rates are typically more competitive than those offered by your local bank. Check out the exchange rates offered by other money transfer providers and compare them with PayPal's in the table below.

Which is faster?

PayPal

Money transfers with PayPal are speedy. If you’re transferring between PayPal accounts, funds are available immediately. If you withdraw money from your PayPal account into a bank account, you can expect the funds to get there within the next business day.

Bank transfers

Most banks offer international money transfers that will arrive within two business days, but your transfer speed depends on your specific bank and type of account.

Trophy icon
Winner: PayPal

Even though both PayPal and a bank transfer can get your money where it needs to go pretty quickly, PayPal edges out the competition with instant transfer options between PayPal accounts. See how PayPal's transfer speed stacks up against other money transfer companies.

How do they work?

PayPal

To transfer money through PayPal, you’ll need to create a free PayPal account. You can then send a transfer to your recipient’s PayPal account, funding it with your PayPal balance, bank account, credit card, debit card or PayPal Credit. After your recipient receives the money, they can either keep the funds in their PayPal account or withdraw the money to their bank account.

Bank transfers

A bank transfer lets you move your money from one bank account to another through existing banking networks. While in the past you had to visit a bank branch to initiate a money transfer, these days most banks allow you to initiate transfers online and by phone as well. However, delivery options are typically limited to bank account deposits, usually within a few days. You might also hear it referred to as a telegraphic transfer (TT) or a SWIFT transfer.

Learn more about using PayPal to send money abroad

Bottom line

Although much of the comparison between PayPal and a bank transfer varies depending on your bank account, PayPal tends to come out on top thanks to lower transfer fees, stronger rates and faster service.

Ultimately, you’ll want to compare your options to find the service that best fits your individual needs.

Looking for more options?

Check out some other international money transfer options in the table below.

Min. Transfer Amount Transfer Speed Online Transfer Fee Rate Amount Received Description CTA Details
AUD 3,000 1 day GBP 20.00 0.681 USD
6,805
Global Reach will match any competitor's exchange rates. Conditions apply.
No transfer fee when transferring more than £10,000 or equivalent. Send money in over 130 currencies. No maximum transfer amount.
Go to site Show details
AUD 2,000 1 day AUD 0.00 0.682 USD
6,823
Better exchange rates for Finder customers.
Send 60+ currencies at competitive rates and no fees. If you find a better eligible quote, WorldFirst will beat it.
Go to site Show details
AUD 250 1 day AUD 0.00 0.682 USD
6,824
SendFX guarantees to match any competitor's exchange rate. T&Cs apply.
Fee-free transfers in 30+ currencies to over 200 countries.
Go to site Show details
AUD 250 1 - 2 days AUD 0.00 0.682 USD
6,821
$0 transfer fees for Finder customers.
No-maximum limit transfers with competitive exchange rates for 100+ currencies. No transfer fee over AUD$10,000.
Go to site Show details
AUD 2,000 1 day AUD 0.00 0.683 USD
6,828
TorFX guarantees to match any competitor's exchange rate. Conditions apply.
Send money overseas in 30+ currencies with competitive rates for transfer amounts over $2,000.
Go to site Show details
AUD 5 1 - 2 days EUR 3.00 0.679 USD
6,785
Special offer: Pay zero fees on your first 5 transfers.
Get bank-beating exchange rates and fast transfer times on 15+ popular currencies.
Go to site Show details
AUD 1 Within an hour AUD 3.99 0.677 USD
6,770
An online money transfer service with cash pickup, bank account to bank account and airtime transfers available. Go to site Show details
AUD 200 1 day AUD 0.00 0.68 USD
6,800
Low minimum transfer amount of just AU$200, with no set-up fees or transfer fees. Go to site Show details

Compare up to 4 providers


The "Rate" and "Amount Received" displayed are indicative rates that have been supplied by each brand or gathered by Finder.

Exchange rates are volatile and change often. As a result, the exchange rate listed on Finder may vary to the actual exchange rate quoted for the brand. Please confirm the actual exchange rate and mention "Finder" before you commit to a brand.

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Related Posts

International Money Transfer Offers

Important Information*
Logo for Global Reach (formerly FC Exchange) International Money Transfers
Global Reach (formerly FC Exchange) International Money Transfers

Global Reach will match any competitor's exchange rates. Conditions apply.
No transfer fee when transferring more than £10,000 or equivalent. Send money in over 130 currencies. No maximum transfer amount.

Logo for WorldFirst International Money Transfers
WorldFirst International Money Transfers

Better exchange rates for Finder customers.
Send 60+ currencies at competitive rates and no fees. If you find a better eligible quote, WorldFirst will beat it.

Logo for SendFX International Money Transfers
SendFX International Money Transfers

SendFX guarantees to match any competitor's exchange rate. T&Cs apply.
Fee-free transfers in 30+ currencies to over 200 countries.

Logo for OFX (Ozforex) International Money Transfers
OFX (Ozforex) International Money Transfers

$0 transfer fees for Finder customers.
No-maximum limit transfers with competitive exchange rates for 100+ currencies. No transfer fee over AUD$10,000.

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