Transferwise vs PayPal

If you need to transfer money abroad, or run a business with your customers overseas PayPal or Transferwise are your best bet.

While banks have been around since forever, these two fintech mega successes have emerged in recent years and truly shaken up the money transfer business – especially if you need the ability to “Request Money”.

It appears that both strive put the user experience and convenience at the heart of their product and sending or requesting money with either of these two companies is so much better then it was in the dark ages when we used banks.

What’s more is that they are both fairly cheap and convenient to use, especially when compared to your bank.

However, one must still rise to the top! In this battle of PayPal vs Transferwise, we compared both companies based on the following categories:

  • Cost
  • Speed
  • Convenience
  • Security

While we fully recommend you to read the whole article to see exactly how each service performed in each category, for those of you who need can’t wait (after all, time is money) Transferwise is the overall winner especially if you want the most money to arrive.

Here is a Video from Transferwise that we thought was pretty funny…

For most people getting the most funds from A to B is the most important and on this score Transferwise is cheaper and faster than PayPal.

PayPal did have a clear advantage in that many people already have a PayPal account but this came at a steep price. However, if you and the person you are sending money to are already signed up and don’t mind paying more, PayPal could be the service for you.

At this point you have to ask yourself if getting up to 6% less is an acceptable for the convenience. Now that might not sound a lot but if you are getting paid a good proportion of your income this way or you are paying others – this can be a significant loss and worth making the switch.

A final thing to consider is that there are many variables depending on where you are transferring money. For example, the currency you are using, how you pay into the service, etc. To ensure you get the best price you could always get a quote from each company before sending your money. Generally though you will be hard pressed to beat Transferwise so we recommend taking a look look as this could easily result in hundreds if not thousands saved each year.

Now, before we move on to how we arrived at these results, let’s firsts take a quick look at the history behind each company.


PayPal for Money TransfersOf the two companies, PayPal is the one you probably know the most about. It was founded in 1998 and rapidly expanded after becoming the payment method of choice on the auction site eBay.

It has continued to grow to the point where I would be willing to bet that a significant number of the people reading this already have a PayPal account set up and have probably used it.

However, before PayPal came along, everyone had a bank account. Yet we all know that this didn’t stop PayPal from tearing up the financial rulebook.

Perhaps now is the turn of…


Transferwise was formed in 2011, as Money Transfer Company with a few distinct points of difference – ridiculous transparency on its fees + it does enable you to request money from others overseas + the fees charged throughout the process are much less.

Like PayPal before it, Transferwise has grown rapidly over the years and now claims to send over 800 GDP every month!

It uses an innovative Peer to Peer transfer model that allows users to transfer money without technically sending their money to another country. This allows Transferwise to really reduce the amount they charge in transfer fees and it is a big reason behind its success and your savings.

So, now that you know a little about each of these companies let’s move on to finding out which one is actually the best at sending your money abroad. First, let’s take a look at the cost of sending money with each company.


For many people out there the best money transfer service will always be the cheapest. After all, the extortionate transfer fees are exactly the reason why you want to avoid using your bank and perhaps why you are looking beyond PayPal because of their high fees.

The overall cost of a money transfer service will generally come down to two different measures. These are the exchange rate that you are given and also any fees that are added on.

In addition are the fees added by your bank or your credit card company. These would most likely be the same on either service anyway.

Exchange rate

Exchange rates are one of those things. We all see on Google, or our finance apps, or on the news what the exchange rate is but we all also know we are never actually going to get that rate.

It is a commonly accepted fact that financial companies will always try to skim a little of the top making the actual amount we receive less than the exchange rate we see.

Well, hold on a moment.

When it comes to your exchange rate, what you see is what you get with Transferwise! Transferwise uses the mid-market rate and doesn’t actually make any money from the transfer rate. This basically means that when it comes to exchange rate, it would be very hard for anyone to beat Transferwise.

PayPal, on the other hand, say that they take the wholesale rate provided by banks and then add on an extra 2.5% – 4% to calculate the exchange rate you receive.

3.5 – 4% is what they charge for currency exchange. (2.5% is what they charge to exchange currency in your own account.)

Here is the chart they publish:

Exchange Rate Costs for PayPal

In our tests, even a bank will outdo PayPal for anything above about $300 but this is dependant to countries and amount.


You can see on the screenshot below that the fees for PayPal range at between 0.5% to 7.4% of the total amount transferred or slightly more if you are using money from a credit or debit card

Fees for PayPal




So the total cost to use PayPal

= Exchange Rate + Fees

= (2.5 + 0.5) to (4 + 7.4)

= 3% (min) to 11.4% (max) 

For most people, in the USA, UK, Europe, Canada or Australia for example and get paid or pay someone in those same countries;

Total Cost = 5 – 6% (Lesser known currencies will be higher)

By contrast the fee for using Transferwise is 0.5% for most major currencies.

However this can increase if you use different currencies. For example, sending GBP (UK) to CNY (China) will be charged at a rate of 1.5%.

Basically, when it comes to fees, with both of these services you will pay a slightly different rate depending on the currency pairing that you choose. However, what is clear is that due to the 2.5% extra that PayPal add to the exchange rate, sending money with Transferwise is almost always going to be your best option.

Winner: Transferwise is the clear winner due to its use of the middle market exchange rate and its relatively small transfer fees.


Like with cost, speed, is important and also highly dependent on the currencies you choose.

Transferwise claim that most transfers will be completed within 1-4 working days once they receive your payment. When I set up a transfer of USD to EUR it claimed that the money would arrive within 1-2 working days.

The average amount of time a PayPal payment takes is 3-5 business days. So again, while this is certainly slower than some transfers with Transferwise, it is at least competitive with other types of transfer.

Winner: Once again Transferwise is the winner here. While both companies say transfers can take up to 5 days, for many currency pairings a transfer with Transferwise will only take one or two business days.


Both companies make signing up for their service very easy. I signed up to Transferwise by simply typing in my email address and choosing a password. Incredible! You can also use Facebook or Google to sign in if you please.

This is part of Transferwise’s overall strategy of making sending money abroad as simple as possible.

Of course, PayPal is no slouch either. Signing up for PayPal requires you to type in a few more details before your account is open but it really isn’t any hassle at all.

Also, while it may seem like you need to give more details to PayPal before signing up than you do with Transferwise, in reality, before making your transfer you give some extra information to Transferwise anyway.

After signing up to either service, you will have to transfer money to your account from a bank account in your home country. Alternatively, you can use a card to make a payment although this may be slightly more expensive.

One place where PayPal may have the edge is the simple fact that it is such a popular service. This means that there is a fairly high chance that you and the person you are sending money to already have a PayPal account!

If this is the case, not only will you save time when it comes to signing up to the service but sending money to another user of PayPal is ridiculously easy. All you need to do is type in the email address associated with their PayPal account, choose an amount of money that you want to send, and then confirm the transfer.

In all honesty, it is almost scary-awesome how easy it is to transfer money internationally using this method.

Winner: This winner of this category really depends on the person you are transferring money to. If you need to transfer money to a bank account then Transferwise is the winner. On the other hand, for sheer ease of use, if the recipient has a PayPal account already then PayPal is the winner.


When it comes to transferring money, security is one of the most important factors. Luckily, for anyone considering using either PayPal or Transferwise, both these companies are about as secure as it gets.

As both companies do business throughout the world, they are regulated by various services depending on the country you use them in. This makes them incredibly safe. Here is a list of who regulates PayPal in each state while here is Transferwise’s security and regulation for each country it operates in.

If you need any more evidence about just how safe these companies are, then you can take a look at the numbers. As mentioned above, Transferwise transfers over 800 million GDP a month while, according to this article from way back in 2011, it is estimated that in 2011 PayPal was processing $315.3 million in payments every single day.

Basically, both of these companies are highly successful and this kind of success only comes if they are able to provide a certain amount of security to their users.

Of course, one place where they don’t have much of an influence is on human error. When transferring money, make sure you know and/or trust the person you are sending the money too as once it’s gone it can be hard to get it back.

As well as this, it is worth remembering that both these services put ease of use at the forefront of their customer experience. As we saw with how easy it is to transfer money using PayPal, all you need is the email address of the person you are sending money too.

Because of this, it would be worth making sure that you change your passwords regularly and choose a long, difficult to break password when using these services.

Winner: Hard to tell these two companies apart when it comes to security. As long as you are careful with who you are sending money too and keep your account details secure, you should have no problems using either service.


Overall, if you are looking to send money as cheaply as possible then Transferwise is usually going to be cheaper than PayPal. It does not make money off the exchange rate and only charges a small percentage of the overall transfer as its fee.

It is simple to sign up to, easy to send money with and should even be quicker in many situations than PayPal.

However, that doesn’t mean that PayPal doesn’t have its place.

PayPal is well known and as such, it can be a convenient option and is likely to be especially useful for small amounts where the fact that they take a percentage won’t result in you losing that much money.

For amounts more than about $300 we highly recommend comparing Transferwise as your solution – it could save you a bundle.

Basically, check out either option, see how much it will cost for you to send money using each service, and then you can come to a good decision about which is the best money transfer option for you!

6 Untapped Ways to Save $$$

How’d you like to see how I consistently save thousands of dollars on a regular basis when I transfer a fairly modest amounts around the world?

Quinn Askeland Small ImageHi my Name is Quinn.

After 10 years of living around the world and thinking each time that we were going to settle down 🙂 – I have learned a thing or SIX!

Unfortunately most people waste between at least 3% of their money and usually more like 5 – 7 % of their money when moving their hard earned dollars, pounds or euros worldwide.

Here is a round up of some awesome ways I have discovered how you can end up with more in your bank account.

1. Use a Money Transfer Service

As discussed everywhere there easiest way to save money is to not use a bank and choose a service that specializes in transfers overseas – ideally one that has an office on you country because of the extra layer of safety you will get and the fact that you are more likely to get better rates and service.

The next 3 are in my eBook, and they remain powerful – I recommend you grab a copy now!

2. Dip a Toe In

I found out the number 1 reason people continue to use their bank is that they are worried about losing their money. My suggestion here is to transfer a small amount initially – you will soon see how silly you were to wait so long.

3. Register

Until you register you have got nothing. The rates indicated on websites don’t mean a damn thing until you are actually in the back end and ready to trade. There is one awesome service, that I use myself personally that does actually offer the rates right on their website – live – the actual rate you will get BUT even then by the time you login or signup the rate you thought you could get is no longer.

4. Shop Around

The transfer market has become pretty competitive. This means you can do well to shop around.

In the eBook I provide tips on exactly how to go about each of these.

After you have read it you will be miles ahead of most people without doing anything else.

But if you want to go a bit deeper and actually make some money here are some slight less passive ways to do it!

5. Ladder Technique

Through a little experimentation I found a way to basically lock in rates as they go higher.

Just like a ladder and using your two legs you are able to move higher up the rungs.

This saves me easily on average about $100 each time – risk free.

I thought it was a cool little technique, so I made a little video.

You can find the transcript here or watch it now.

The only thing about the ladder is that you have no idea how high it goes.

You have to have a little discipline to take the extra money off the table. Just be happy with what you get.

6. Smart Alerts

Beyond just using a specialist money transferrer with an office ideally in you country this is by far the most powerful way to make (save) a bundle of money.

I showed, “How I made $2500 or 10%” with a case study where I show you step-by-step how I do it.

Essentially I have taken a tactic that the Pros have used and simplified it and dumbed it down so that I can do it without too much thought – just results.

Yes it takes a little discipline, but I have consistently outperformed over a long period of time.

I can always get an extra 1% (but often more) which covers all the costs of the transaction and a bit more usually.

It is as simple as setting up some rules and alerts for yourself on when to send the money based on drawing a couple of lines.

You can also read, “How to Lock in Great Rates” to help you master this technique.

Hope that helps – Happy Transfers!



How to Lock-in Great Rates – Case Study on International Transfers

I am super excited to share this with you.


Well pocketing a couple thousand extra dollars could not be simpler in my view.

Unhealthy obsession?

I think not.

To the contrary it is very healthy in every way because it is but far the easiest thing to do to make money.

In a world where 1% – 2% interest per year from your bank account is about as good as it gets – Getting another 2% safely, easily and in about 5 days is very sweet indeed.

As discussed at length, you can easily save money by not using a bank and simply use a money transfer companyusually saving around 3%.

But in addition to this, here is how you can lock-in great rates.

How Alerts Work to Make Money

The beauty of this method lies in its simplicity.

For example, lets say you want to transfer $100k Canadian (CAD) to the Australia (AUD) in the next 3 months.

I use these currencies just as an example, mainly because this is a real life example I am executing right now but I have transferred – USD and GBP exactly the same way.

  1. Timeframe: Decide when you need the money moved – 1 week, 1 month, 3 months, 1 year (in this example 1 week)
  2. Set Limits: Look at the three month chart and one year chart using yahoo exchange or something similar and decide on your limits – upper and lower
  3. Set Alerts
  4. Wait
  5. Execute

Step 1. Timeframe

In my example, here is what the charts look like.

3 month exchange rate Cad to Aud

3 Month Chart


1 year Cad to Aud chart

12 Month Chart

I find charts like the second one very exciting if you have a long time horizon.

For my example, like most people, I needed my money ASAP.

So the three month chart plays a bigger role in step two.

Step 2. Set Limits

For step two usually I print off these charts – yep I actually print them off and get out a ruler and pencil.

Here is what I did to the 3 month chart:

3 month CAD AUD chart

What I drew is two sets of parallel line or “trends”

The rising set of lines are more important if my time horizon was 1 month to 3 month, but since we need the money now – the key is avoid dips like what happened on 2 July.

Finding the Sweet Spots

Just in the past 15 days the “currency pair” has moved between 1.06 and 1.04 – for $100k that is a $2k difference.

Therefore it is easy to see that anything over 1.06 is a great result in the short term.

Longer term is a different story – everything tells us if we wait we will be better off.

However, our timeframe in this example is short.

Step 3. Set Alerts

I used OZForex/Canadian Forex/USForex which are the same company for this example, but almost all money transfer companies provide alerts.

Here is what the alert panel looks like.

Alerts for Ozforex, Canadian Forex and USForex


In this example 1.06 is what we want but I want to be ready when it hit that.

So I set alerts for 1.059, 1.06 and 1.061

Importantly: I also set alerts for 1.039, 1.04, 1.041 to protect on the downside.

Lets not forget we were at below parity ($1) this calendar year so being ready and able to pull the trigger at 1.039 (maybe 1.0375) is just as important as 1.06.



Step 4. Wait

Waiting seems easy, but it is not for most people.

The magic of having the alerts set up though is that you can get on with everything else in your life without worrying.

Then this happens.

Alerts Trigger an Email

Step 5. Execute

This is where the rubber hits the road.

An email is sent or you get a text (I always do both) and now its time to ring the register.

In Real Life

The reason I am so excited to share this with you is because it works and here is proof.

Actual Trades

On the 3 July I sent money from Canada to Australia with the CAD/AUD above 1.06.

I also did the same thing earlier on the 26 June.

During this time the exchange rate did go to 1.04 but not any lower so I did not transact.

Of course the money transfer company does take a cut – In this case it was about 0.9%.

I ended up in front by 2% – Which for $100k is a $2000 gain. Not bad for about 10 or 20 min work. Not too bad ehh?

Important Notes

Deciding when you need your money is very important. In my example, I wanted to bring the money over ASAP so the 3 month chart and particularly the past month is far more important.

If however you time horizon is much greater, like 3 months or more, then the 1 year chart becomes more important.

I hope you do to!

Thanks for reading.

By the way, I am not a financial expert of any kind and this is not meant to be financial advice – just a way for you to make your own decisions and have more control over your money with confidence. 

How I Saved $2500 or 10% in One Transaction – Case Study You Can Follow

Want to know how you can save a bundle of money easily?

Transumo Saves You MoneyThat headline sounds corny I know. But at Transumo, I have written about how you can save hundreds, if not thousands on your money transfers very passively simply by using money transfer companies – we even show you can choose one best for your specific requirements.

And there is no doubt you can save 2 – 4% percent pretty easily just by registering with a reputable company – ideally in your country of residence.

What I am about to show you does require some minimal work on your behalf, but I use it every time and as you will see I get some pretty awesome results.

Now I want to show you how you can save even more by the simple timing of your transfers!

Sometimes MUCH MORE – like 7% on top of the juicy 3% or so you saved by not using a bank. That’s 10% in total.

Heres the cool thing, forget about pips, fiscal policy, reserve bank meeting predictions, candlestick charts, forward contracts and hedging …

In some situations complex solutions are helpful but most peoples needs are simple – we simply want the most money to arrive at A from B.

And you can make this happen.

I did and I want to show you very simply how.

Simple Needs = Great Results

You have money and you want to send to another country and you are not sure if you should do it now or reassess later – period.

If you are a forex trader stop reading now… I can’t help you – ever.

This simple method is for individuals and businesses that want to move money in days or weeks – not minutes.

Also, if you are happy leaving you money in the hands of commission based experts thats fine too – stop reading now – maybe you have someone you trust but I don’t. No one cares more about your money than you.

What Works – Simple Charts Method

The basic chart here was all I used to make my decision for a transaction I did moving Aussie dollars (AUD) to Canada (CAD).

Transumo Money Transfer Method Example

I know there are many ways to second guess yourself on this but I find that putting my trust in two parallel lines is all that is required. This is because these two parallel lines are not opinion – they define what is happening – simple supply and demand.

Currencies have a way of working in trend channels – just look at the channels since.

All you need to do is act when they break out of these channels if it is in your favour. This is what a “sell alert” is.

But, what if you were transferring money in the other direction?

Simple! A break out from this trend would indicate I should wait. In this case, waiting would have been a really good idea. In this case it went to 92c. In other words, for every 92c I have, I would get $1.

Pulling the trigger

The final step is important before you pull the trigger. Do you need the money now or can you wait?

Even if the trend is not in your favour you might need to act. Thats OK, we are not in the business of trying to make money doing this but if we can save a little or a lot by acting now or just holding on for a few weeks – why not!

Here is a transaction I made based on the chart above.

Money Transfer Example

In my example, I didn’t need the money to buy groceries but at the time I preferred to have it in Canada so it was an easy decision for me. Other times I have needed to money pretty immediately but I could always hold off for a few weeks and in this case a few weeks could make all the difference.

That’s it really – three simple steps or really just one if you just let the charts guide you.

Note: The rate on the 1 May shown here is the rate offered by the money transfer company. The actual spot rate or interbank rate was about 1.035.

Just waiting another another month to move my money would have meant I would have got 95c – a difference of 7c or approximately 7%. In my actual money transfer I figure I saved at least $1750 and more to the point the rate has not been that good since (1 year later).

Thats $2500 I saved in total! 3% for not using a bank and 7% with these simple steps.

I just showed you how I routinely save – in this case a cool 7% on my money with a slightly flexible time horizon. Its not trading, but it is money in the bank and you can be the master of making it happen very simply.

If you want to get the latest charts and analysis, each month I produce charts and analysis for all the major currencies including USD, CAD, and AUD on a monthly basis.

Over to you.

Let me know in the comments below, what you think of this process. Do you have anything else that helps you?

Thanks for reading!

By the way, I am not a financial expert of any kind and this is not meant to be financial advice – just a way for you to make your own decisions and have more control over your money with confidence.