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 22 October 2019.

At a glance: General features

Payment methodsMinimum and maximum transfersDelivery methodsTransfer speedsCountries
PayPalBank transfer, credit or debit card, PayPal CreditMinimum: $1

Maximum: $60,000

PayPal transfer, bank transfer1 day190+ countries
Bank TransfersOnline, in person, app (when available)Varies by bankBank transferTypically within 2 business days190+ 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.

PayPalMajor Australian bank
Exchange rate1 AUD = 0.591 EUR1 AUD = 0.595 EUR
Transfer fee$5.99$24
Transfer speed1 business day3 to 5 business days
Transfer optionsBank transferBank transfer
Total euros receivedEUR€588EUR€581
Receiver getsEUR€7 moreEUR€7 less

The result? A transfer through PayPal results in your recipient receiving EUR€7 more. Interestingly, PayPal offers a worse exchange rate, but because the fees are lower, it works out better.

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
GBP 0 1 - 2 days AUD 0.00 0.731 USD
7,311
Azimo sends money directly to a bank account or over 280,000 cash pick-up points. It also has fast transfers to 50+ countries. Go to site Show details
AUD 2,000 1 day AUD 0.00 0.733 USD
7,333
TorFX guarantees to match any competitor's exchange rate. Conditions apply.
TorFX sends money overseas in 30+ currencies, with competitive rates for transfer amounts over $2,000.
Go to site Show details
AUD 250 1 - 2 days AUD 0.00 0.733 USD
7,333
$0 transfer fees for Finder customers.
OFX has no maximum limit transfers, with competitive exchange rates for 45+ currencies.
Go to site Show details
AUD 2,000 1 day AUD 0.00 0.733 USD
7,333
Send guarantees to match any competitor’s exchange rate. T&Cs apply.
Send provides fee-free transfers via its 24/7 multi-currency payments platform with real-time quotes.
Go to site Show details
AUD 1 Same day AUD 0.00 0.733 USD
7,326
XE has fast transfers with low fees and a range of foreign currency tools. Go to site Show details
AUD 1 Same day AUD 3.99 0.727 USD
7,271
Use promo code 3FREE to send your first 3 transfers with no fee. Conditions apply.
WorldRemit sends money to 110+ countries for bank-to-bank deposits, cash pick-ups or mobile top-ups.
Go to site Show details
AUD 1 1 - 2 days AUD 45.00 0.733 USD
7,299
Wise uses the mid-market rate and transparent fees to help you send money in 50+ currencies. Go to site Show details
AUD 200 1 - 2 days AUD 50.00 0.735 USD
7,317
Exclusive: New customers sending over AUD 500 from Australia use code FINDER50 to get AUD 50 off. Pay zero fees on your first transaction. Valid till 31 July 2021. T&Cs apply.
Instarem offers simple transfers with a flat 0.5% transfer fee for most transfers.
Go to site Show details
AUD 1 1 day AUD 52.00 0.733 USD
7,288
Pay no fees on your first two transfers, up to $3,000.
SingX offers the real exchange rate every time you make a transfer and can help you send money across the world.
Go to site Show details
AUD 10 Within an hour AUD 2.99 0.728 USD
7,280
Special offers like free transfers and better exchange rates available for new customers.
Remitly has quick, affordable transfers around the world, with both express and economy options.
Go to site Show details
AUD 5 1 - 2 days EUR 3.00 0.733 USD
7,332
Special offer: Zero fees on your first 10 transfers.
CurrencyFair has bank-beating exchange rates and fast transfer times on 15+ popular currencies.
Go to site Show details

Compare up to 4 providers

Disclaimer: Exchange rates change often. Confirm the total cost with the provider before transferring money.

Frequently asked questions

More guides on Finder

International Money Transfer Offers

Important Information*
Logo for Azimo International Money Transfers
Azimo International Money Transfers

Azimo sends money directly to a bank account or over 280,000 cash pick-up points. It also has fast transfers to 50+ countries.

Logo for TorFX International Money Transfers
TorFX International Money Transfers

TorFX guarantees to match any competitor's exchange rate. Conditions apply.
TorFX sends money overseas in 30+ currencies, with competitive rates for transfer amounts over $2,000.

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

$0 transfer fees for Finder customers.
OFX has no maximum limit transfers, with competitive exchange rates for 45+ currencies.

Logo for Send International Money Transfers
Send International Money Transfers

Send guarantees to match any competitor’s exchange rate. T&Cs apply.
Send provides fee-free transfers via its 24/7 multi-currency payments platform with real-time quotes.

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