A closer look at international coverage in Canadian banks
Take a look at the global coverage of some of the biggest Canadian banks, and how Wise can help with its international coverage
There are lots of different options out there if you’re looking to send money to friends or family abroad. You can send money direct from your bank account using a bank transfer, try a digital payment provider you already use, such as PayPal, or choose a specialist in international money transfers, like Wise. The costs to send money vary widely between these options, so doing a bit of research in advance is the best way to make sure you’re not paying too much for your cross-border transfer.
This overview will cover all you need to know about:
It makes sense to check out whether PayPal is your cheapest and most convenient option for sending money to friends and family overseas. You can compare the process and prices against your regular bank, and other alternative providers.
Working with your regular bank may have the benefit of familiarity, but it’s not always the quickest or most convenient choice - in fact some banks still require you to visit a branch in person to arrange a transfer.
To arrange a simple online payment to a friend overseas, you might find you’re better off with a modern alternative to traditional banks, such as Wise.
How does an international money transfer with Wise compare to one with PayPal? Let’s look at an example of sending CA$1.000 to the US, to be received in US$.
Charges | PayPal | Wise |
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Fee for payment method |
| Fee overview
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Currency conversion fee |
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Exchange rate |
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Check out Wise, and the Wise multi-currency borderless account to get safe, quick international payments for a low fee. |
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Before we dive into using PayPal to make international transfers, it’s worth knowing that the fees and features you can access with PayPal will depend on whether you have a personal or business account. This guide will focus on making international payments from personal PayPal accounts, so if you’re looking to send money for your business, you’ll need to review the business account fees over on the PayPal website¹.
With a PayPal personal account, sending money overseas is fairly simple. You’ll need to take a few steps in order to create a payment².
Your recipient will receive an email notifying them that they have a payment waiting. If they have a PayPal account already, the money will be deposited there. If they don’t have an account with PayPal yet, they’ll have to open one to access the funds you’ve sent.
You can link different payment methods to your PayPal account, and then select the one you want to use for your transfer. Choose from using your PayPal balance, your linked bank account, or a Visa, Mastercard or American Express credit or debit card³.
Usually, one payment method will be nominated as your preferred option, and this will be automatically selected by PayPal when you set up the transfer⁴. Alter this within your account by simply selecting a different linked method of funding the payment when you review the payment.
It’s worth knowing that the fees you pay for an overseas transfer with PayPal can vary depending on the funding method you choose. You can find more information on that in the table below.
Using PayPal to send money to friends and family abroad is convenient, but there are fees you need to think about. The charging structure is relatively complex, and varies according to the payment type and destination country. Make sure you understand the range of fees you’ll face before you go ahead.
Transfer details | Payment funding method | PayPal Canada fee |
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Sending money to friends and family in the US or selected countries in Europe. | PayPal balance or linked bank account | CA$2.99 or currency equivalent + 2.5% exchange rate markup + 3.5% - 4% currency conversion fee |
Sending money to friends and family in the US or selected countries in Europe. | Credit or debit card | CA$2.99 or currency equivalent + 2.9% + fixed fee based on the currency + 2.5% exchange rate markup + 3.5%-4% currency conversion fee |
Sending money to friends and family elsewhere in the world. | PayPal balance or linked bank account | CA$4.99 or currency equivalent + 2.5% exchange rate markup + 4% currency conversion fee |
Sending money to friends and family elsewhere in the world. | Credit or debit card | CA$4.99 or currency equivalent + 2.9% + fixed fee based on the currency + 2.5% exchange rate markup + 4% currency conversion fee |
Source ⁵ and ⁶
If you pay for your transfer using a card, you’ll have to pay a fixed fee depending on the currency. These fees can be found on the fees section of the PayPal website. To give an idea of the cost, the fixed fee would be EUR0.35 for a transfer in euros, or AU$0.30 if you’re sending in Australian dollars⁶.
You’ll also pay a currency conversion fee⁶ if the payment is to be received in a currency other than Canadian dollars, and may find that a markup has been added onto the exchange rate offered for conversion⁵.
The exchange rate that PayPal uses to convert your money to the currency of the recipient, is a rate they call the “retail foreign exchange rate”. But what does this mean for the exchange rate you’ll get? They explain it like this⁵:
”We receive a wholesale rate quote from our bank twice a day and add 2.5% to determine the retail foreign exchange rate to apply to transactions that involve a currency conversion.”
As the name suggests, this is not the same rate as the mid-market exchange rate. They get the mid-market rate, or wholesale rate, from their bank and add a markup of 2.5% to it. This marked up rate will be the rate that they will use to convert your money. Although most banks and providers do this, and PayPal is at least transparent about how much their markup is, you’re still paying extra costs on your international money transfer.
Before you hit the confirm button, when making your international transfer, compare the fees, exchange rate and the amount your recipient will ultimately get to different providers, to make sure you get the best deal. Not all international payment providers add a markup to the exchange rate they use. Wise, for example, offer international payments using the mid-market exchange rate, which is the same exchange rate you’ll find on Google. You then pay a transparent fee for the service, which makes it much easier to understand and compare the costs involved.
You can arrange a one off Wise payment, or open an online borderless multi-currency account for ease. With a borderless account you can hold over 40 currencies, and send payments all over the world and even receive payments like a local in USD, GBP, EUR, AUD, NZD and PLN. Transfers use the Google exchange rate, with a straightforward fee schedule to make it easy to compare the service with other providers. And because Wise is FINTRAC regulated and uses the same security technology as leading banks, you know your money is safe - no matter what currency you’re holding it in.
Before you choose the best way to arrange your overseas payment, it’s well worth spending some time looking at different providers. Compare the service for convenience and cost, to make sure you’re getting the best deal out there.
Sign up with Wise, and start saving on your international money transfers! |
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Sources used for this article:
1.PayPal FAQ page - What is the difference between personal and business accounts
2.PayPalFAQ page - How do I send money?
3.PayPal FAQ page - What credit or debit cards can I use with PayPal?
4.PayPal FAQ page - How are my payments funded?
5.PayPal FAQ page - Where can I find PayPal's currency exchange rates?
6.PayPal fees page
*All sources checked on Dec 5, 2019
*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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