Western Union vs. PayPal: Which one is cheaper in 2021?

Adam Rozsa
30.09.21
6 minute read

Both Western Union and PayPal offer customers ways of sending money overseas.

However, the costs of using each transfer service will vary depending on where you’re sending to, the amount of money you want to transfer, how the beneficiary receives the money and which of the available payment methods you select.

This guide helps you to compare Western Union with PayPal - including looking at transfer fees and exchange rates.

We’ll also touch on how you may be able to save on your international money transfers with Wise. Get fast, safe cross-border payments which use the real mid-market exchange rate – and save up to 6x compared with some other providers.

Learn more about Wise

📝 Table of contents

How is PayPal different from Western Union?

There’s certainly some overlap in the services offered by both PayPal and Western Union.

Not only do both allow customers to send cross-border payments, you can also make cash withdrawals or in person payments using either service with a PayPal Cash Card, or a Western Union Prepaid Card.

That said, PayPal and Western Union are distinctly different providers, with individual features and fees. Here are a few major points of difference:

  • Western Union allows online transfers and also payments for cash pickup at an agent location - PayPal’s services are predominantly online
  • You can use your PayPal account to shop online and in apps freely - you can’t do this with a regular Western Union account
  • Western Union payments can be sent to beneficiaries who don’t have a Western Union account of their own - you’ll need a PayPal account to both send and receive funds
  • PayPal has a broader range of business and merchant services compared to Western Union

In short, Western Union is primarily a payment provider which started out offline and has moved into the digital age.

PayPal exists online first and foremost, and specializes mainly in digital payment services including e-commerce and transfers. Keep on reading for more on how each service works - and which may be best for your international transfer.

New to PayPal? Learn more with this guide to PayPal and how it works. Or, if you’re specifically looking at using PayPal for sending money overseas, get this guide to PayPal international transfers instead.

western union vs paypal

What’s cheaper: PayPal or Western Union?

Whether PayPal or Western Union is better value for your international transfer depends on a number of factors, so there's no easy answer to this.

How much you’re sending, how you’ll pay, and how you want the recipient to get the money can all make a difference to the overall cost.

The best idea is to model your payment on both platforms and see which is better for your specific transfer.

It’s good to know that an international transfer can actually have a few different fees:

  • Upfront transfer fee
  • Exchange rate markup
  • Third party costs

The upfront transfer fee is usually pretty easy to see. This will be listed on your provider’s website or app when you input your payment details.

Exchange rate markups can be trickier to spot. And finally, you’ll need to make sure there are no likely third party costs, such as a cash advance fee applied by your credit card provider.

Want to know more? Get an in depth guide to Western Union fees here - and learn all about PayPal’s currency conversion rates here.

How much does it cost to send $1000 through Western Union?

To help you figure out if Western Union is the right provider for your payment, let’s look at an example - sending 1,000 USD to a friend in the UK.

The true cost of sending USD to GBP
💡 If you want a simpler, cheaper way to send cross-border payments, get Wise. All Wise international transfers use the mid-market rate - the one you see on Google. There’s just a low, transparent fee to pay, no hidden costs and no surprises. Arrange your transfer online or in the Wise app and have it sent to your recipient’s bank account for convenience. It couldn’t be easier.

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western union vs paypal

Western Union vs. PayPal: Which offers better exchange rates?

Let’s move on to the tricky question of the exchange rates used by both PayPal and Western Union.

Western Union

Both Western Union and PayPal add a markup to their exchange rates - this may be called a currency conversion fee or spread. In either case it’s an extra fee so it’s important to know about it. Here’s what Western Union’s small print says about currency exchange¹:

“In addition to the transfer fee, Western Union also makes money from currency exchange”

As we saw above, the exchange rate markup used by Western Union may vary depending on whether you’re arranging your payment online or in person, and on how your recipient gets the money in the end.

Usually there’s a higher fee added to payments which have to be processed in person - when you arrange or receive a transfer at an agent location.

However, the only way to be sure exactly what markup will apply to your transfer is to model the payment online or in the Western Union app.

PayPal

PayPal on the other hand, does publish the exchange rate fees which are applied on top of any upfront transfer fee. If you send money to be received in any currency other than your home currency, you’ll pay an exchange rate fee of 4%².

PayPal vs. Western Union: Options

Both PayPal and Western Union have pretty much global coverage, although services may vary from place to place. If you’re still struggling to choose between them, check out this side by side comparison.

Western UnionPayPal
Payment methodsCredit card, debit card, bank transfer, cashCredit card, debit card, bank transfer, PayPal balance
Delivery methodsPay direct to bank or mobile money account - or for cash collectionPay to a PayPal account
Transfer speedCash payouts can be available in minutes. Other transfers may take a few daysPayments made from a card or PayPal balance will usually arrive quickly - bank transfers can take a few days
Minimum & maximum transfer amountVaries by payment channel and destination countryNo minimum applied. Verified accounts can send up to 10,000 USD per transaction³
Available countries & currenciesGlobal reach aside from a handful of countries where payments aren’t available due to security concernsGlobal reach aside from a handful of countries where payments aren’t available due to security concerns

Sending an international payment can be a daunting task - you want to find the best deal out there, and you need to make sure your transfer is fast and secure. The good news is that there are plenty of different options to check out to find the perfect fit. Get more on alternatives to Western Union or learn more about alternatives to PayPal in these handy guides. Or, Wise can also be a great option – as it offers low and transparent fees.

Find out more about Wise

western union vs paypal

Western Union vs. PayPal: Ease of use, security & accessibility

If you want to make a payment online, either Western Union or PayPal can provide a simple interface, although you’ll need to register an account to get started.

Once your account is active, you can send PayPal payments using just your recipient’s email address, which can be convenient. However, your recipient will need to open their own PayPal account to access the money you send.

For online payments, both services are secure, but it’s difficult or impossible to reverse payments once they are processed. Therefore, you should only pay people you know and trust using either Western Union or PayPal.

If you’re looking to send a payment using cash - or have your recipient get the money in cash, Western Union is probably your better bet. Look for an agent location near you, or check out this guide to making a Western Union payment, to get started.

western union vs paypal

Western Union vs. PayPal: What do the users say?

When you’re sending a payment internationally, you want to know the money will arrive safely - and that you’ll be able to get help and support if you need it.

Both PayPal and Western Union offer online customer services, and with Western Union you may also be able to get face to face help from an agent if you need it.

It’s also worth checking out customer feedback and reviews on a site like Trustpilot⁴ ⁵ before you decide which international payment provider to select, so you’ve got an up-to-date idea of how the customer support works for each option.

Bottom line: PayPal or Western Union?

Choosing between PayPal and Western Union will come down to the specific details of your payment, including how you want to pay and how your recipient wants to get their hands on the money.

If you want to send or receive the transfer in cash, you’ll probably prefer Western Union.

If you’re making an online payment, either provider has got you covered - but it’s smart to check the fees and exchange rates used by each. Nothing to choose between the costs? PayPal could be easiest, as you don’t need your recipient’s full bank details - just an email.

All that said, there are plenty of other providers out there too. So before you set up your transfer, check out a few other alternatives to see if there are better deals to help you save on your payment.

A nice alternative to PayPal or Western Union can be Wise. Wise payments use the real mid-market exchange rate with no hidden costs, no markup and no surprises. Just fast, secure international transfers you can set up online or from your smartphone. You can save up to 6x compared to some other providers - and it takes just minutes to open a free account.

Get a free Wise account today

Frequently Asked Questions

Does Western Union work with PayPal?

You can not usually pay for a Western Union transfer using your PayPal account, and you can not have a Western Union transfer paid into a PayPal account.

Can you Western Union money to a PayPal account?

PayPal is not a Western Union payout option. Check the payout options for your destination country online - these usually include cash pickup, bank transfer and mobile wallet payment.


Sources:

1]Western Union - Send money
2] PayPal - fees
3] PayPal help - maximum send limits
4] Trustpilot- Western Union
5] Trustpilot - PayPal

All sources checked on 30 September 2021


This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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