Get the Finder app 🥳

Track your credit score

Free

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.

Updated

Fact checked

We’re committed to our readers and editorial independence. We don’t compare all products in the market and may receive compensation when we refer you to our partners, but this does not influence our opinions or reviews. Learn more about Finder.

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 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 = 0.591 EUR 1 AUD = 0.595 EUR
Transfer fee $5.99 $24
Transfer speed 1 business day 3 to 5 business days
Transfer options Bank transfer Bank transfer
Total euros received EUR€588 EUR€581
Receiver gets EUR€7 more EUR€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
AUD 2,000 1 day AUD 0.00 0.733 USD
7,330
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 2,000 1 day AUD 0.00 0.733 USD
7,330
Finder exclusive: Get a $100 EFTPOS voucher when you transfer AUD$1,000 or more. T&Cs apply.
Fee-free transfers in 30+ currencies to over 200 countries.
Go to site Show details
AUD 2,000 1 day AUD 0.00 0.733 USD
7,330
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 - 2 days AUD 0.00 0.733 USD
7,330
$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 1 1 day AUD 52.00 0.732 USD
7,285
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
7,276
Special offers like free transfers and better exchange rates available for new customers.
Affordable transfers around the world with both express and economy options. Express transfers delievered in as little as 10 minutes for an extra fee.
Go to site Show details
AUD 1 Same day AUD 0.00 0.732 USD
7,323
Get fast transfers with no fees and a range of foreign currency tools. Go to site Show details
AUD 200 1 - 2 days AUD 50.00 0.735 USD
7,317
Exclusive: Use code FINDER10 to receive US$10 off your first transaction.
Quick and simple international money transfers with a flat 0.5% transfer fee for most transfers. Zero-margin rates on some currencies.
Go to site Show details
AUD 5 1 - 2 days EUR 3.00 0.729 USD
7,284
Special offer: Zero fees on your first 10 transfers.
Get bank-beating exchange rates and fast transfer times on 15+ popular currencies.
Go to site Show details
AUD 1 Same day AUD 3.99 0.727 USD
7,268
Use promo code 3FREE to send your first 3 transfers with no fee. Conditions apply.
An online money transfer service with cash pick-up, bank account to bank account and airtime transfers available.
Go to site Show details
AUD 1 1 - 2 days AUD 45.00 0.736 USD
7,326
Make online transfers at the mid-market rate with transparent fees in 45+ 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 TorFX International Money Transfers
TorFX International Money Transfers

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.

Logo for SendFX International Money Transfers
SendFX International Money Transfers

Finder exclusive: Get a $100 EFTPOS voucher when you transfer AUD$1,000 or more. T&Cs apply.
Fee-free transfers in 30+ currencies to over 200 countries.

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 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.

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site