Western Union Vs Paypal
Looking for a way to send money overseas? Find out which is the better option for you.
A Western Union Overview
Being around for over a century, Western Union is one of the oldest and most renowned money transfers in the world. Money was still being sent on horseback when the company was founded in 1851! Since those old-fashioned days, the company has expanded to global branches as well as fully online money transfer services. The company allows customers to send money to over 200 countries on a global scale. The company is best known globally for their cash transfers through the agent network. Branches are located all over the world allowing customers to send money anywhere they want!
A Paypal Overview
Founded in 1998, PayPal is a leading online payment platform that enables secure digital transactions. It operates in over 200 markets, supporting 25+ currencies. Users can send and receive money, make online purchases, and pay bills. PayPal also offers peer-to-peer payments via Venmo and provides features like instant transfers and buyer protection, making it a trusted choice for both consumers and businesses.
Available payment methods
Western Union Payment Methods
Western Union has five different payment methods:
The amount you can send with Western Union depends on various factors, including your transaction history, location, the recipient's country, and the funding method.
As of recent information, the limits for Western Union transfers are as follows: For most online transfers via the website or app, the daily limit is $2,999, with the following day's limit reduced to $500. For phone-in transfers, limits range from $300 to $2,500 per day, depending on various factors. When initiating a transfer in person at a Western Union agent location, there is typically no set limit, allowing for larger transactions.
PayPal Payment Methods
A few options that PayPal offers to pay for transactions include:
Fees
Western Union’s Fees
Western Union often has low rates with high fees - this means that they have relatively large margins on its exchange rate markup. Sometimes, customers may need to pay up to 20% in exchange rate difference and various fees. The fees regarding how much customers will need to pay, depend on a variety of factors including:
PayPal’s Fees
Using a PayPal balance or linked bank account will not have any fees If money is being sent within the customer’s country. But using a credit or debit card domestically will always come with a cost. Sending money abroad will always include a fee for all the transfers, regardless of payment method. This fee is lower when using a PayPal or bank account to complete a transfer, but will be significantly higher when using a debit or credit card. This fee will be added on top of the flat fee that PayPal charges for all transfers funded with a credit or debit card. There are no fees for withdrawing money unless a paper check is requested. In other words, there are no fees for recipients to receive money.
Exchange rates
Western Union’s Rates
Western Union usually isn’t better than its competition. Their rates are dependent on the country where the money is being sent to and how much money is being sent. Sending larger amounts of money typically means customers will receive better rates. When sending money to developing countries, customers can expect better exchange rates in comparison to sending a transaction to the United States or Europe.
PayPal’s Rates
Exchange rates are calculated using the mid-market exchange rate. A 2.5% to 4.5% margin is subtracted from the mid-market rate. This calculation depends on the sender’s country and the receiving currency. Another factor that impacts exchange rates is how the transfer is being funded. For international currency transfers executed with PayPal account balances, there is only one exchange rate per country. This rate is often better due to the lower mark-up charged on the transaction. Bank account, credit card, or debit card, funded transfers will be charged a different exchange rate for each method. This is due to PayPal’s higher mark-up rate. PayPal’s higher exchange rates are not as good as competitors. Customers may be better off with other money transfer companies.
Security
Western Union’s Security
Western Union’s age and history can attest to its security - especially as one of the oldest companies in the money transfer business. The company is fully licensed and is insured in many countries around the world. It is extremely well known, used, and trusted by the public.
PayPal’s Security
PayPal is very secure. It is one of the most well-known and used ways to pay bills and send money online. The company’s 20 years of business have allowed them to build a reputable service that is trusted by millions. Customer’s funds are held in accounts separate from those of the company’s own accounts. This is to ensure that the money is never used to fund PayPal’s expenses. The company also has a dedicated security team that monitors all transactions to prevent theft, fraud, and phishing. All transactions and customer data are secured with intense encryption and security measures. On top of these precautions, PayPal is regulated and monitored by various international financial agencies.
Ease of use
Western Union’s Ease of Use
Western Union is extremely easy to use and very accessible. It also has over physical 550 000 locations worldwide for customer convenience and an online platform and mobile apps making the company’s services accessible to anyone with an internet connection. Paying bills with certain retailers is another service that Western Union offers, along with prepaid cards allowing customers to send and receive money easily, or directly depositing paychecks onto the card. The card can even be used as a debit card at various retailers, allowing customers to make purchases.
PayPal’s Ease of Use
PayPal’s services are overall very easy and efficient to use. They have both physical locations and online platforms that are available on both desktop and mobile devices. Although PayPal may be easy to use, a very common complaint is in regards to PayPal’s poor customer service. It will be rare for something to go wrong within a customer’s transaction, but in the case that it does, PayPal may not be the easiest financial institution to contact.
Conclusion
Overall, Western Union and PayPal are both giants in the money transfer industry. Western Union is the better option between the two due to their significantly lower rates and fees. Regardless of the decision that a customer decides to make, both options are safe and reliable. Customers should also consider other options when it comes to sending money internationally.