Is TransferWise or PayPal the best way to send money abroad in 2021?

There are plenty of reasons you may be looking to send money abroad in 2021, but whatever that reason may be, value and security will likely be the two main considerations when choosing your transfer service. TransferWise and PayPal are two key players in this space, so here, we take a look at each of them in turn and answer a few questions to help you determine which would be your best bet for sending money abroad this year.

PayPal works by connecting your bank account and/or credit card to a secure online system that allows you to send and receive payments without needing to input your details each time. Your details are never shared with the recipient (or with sellers in the case of online shopping) to help prevent fraud, and payments can even be sent to people using an email address or phone number.

To transfer money abroad using PayPal, all you have to do is select the recipient (or add them to your contacts), enter the amount you’re sending, choose the currency, and send it. The transaction will complete in a matter of seconds and the recipient can access the money from their account.

Alternatively, for recipients who don’t have a PayPal account, you can send money using Xoom, PayPal’s new international money transfer service.

After being owned by eBay for much of its history, PayPal is currently a publicly traded company. Its biggest shareholder is the Vanguard Group.

Although PayPal is free to use for those purchasing goods or services, and for both sending and receiving money in the UK, there will be fees to pay if you’re sending money abroad.

International personal transactions will be charged at 5% of the transaction amount, with a minimum fee of £0.99 and a maximum fee of £2.99. Currency conversion charges will also be applicable, with the charge to convert payments received into another currency standing at 3% above the base exchange rate. Fees for sending money not in GPB are 4% above the exchange rate.

PayPal is known for offering a high level of security, with personal details never shared with the recipient and vice versa. It also monitors every transaction to check for fraud, and each one of those transactions is fully encrypted. The website is encrypted, too, and as long as you know who you’re sending the money to, there’s minimal risk involved.

TransferWise is an online account that lets you send and receive money internationally, get paid in other currencies and spend money abroad. It’s a multi-currency account that lets you link your own bank account to make payments, in a similar way to PayPal; you can either send money to the recipient using their bank details, or simply using an email address. Then, if they don’t have an account with TransferWise they’ll receive an email prompting them to set one up. Money is transferred using the real exchange rate, with minimal fees and transparent pricing.

Founded by Kristo Käärmann and Taavet Hinrikus, TransferWise also has a number of additional investors including Old Mutual, Andreessen Horowitz and Sir Richard Branson.

It’s free to set up the account, but you’ll be charged a fee for every transfer made; there’s both a fixed fee (depending on currency) and currency conversion costs. This will vary depending on the currency you’re transferring into and the amount you’re sending, as well as the exchange rate, but TransferWise has an on-site calculator that lets you see exactly how much each transaction will cost.

Yes. TransferWise adheres to a strict set of rules within each country it operates, and has bank-level data security as well as a specialist security team to ensure all transactions are as safe as possible.

This depends on various different factors, such as the country you’re sending the money to and how much you’re looking to send, but the best way to send money internationally is arguably the one that’s the most convenient, the safest and the cheapest. For many, this could mean international money transfer services or specialist currency exchange providers such as XE, or even using apps or services such as PayPal (above).

Using a specialist international money transfer service will typically be the cheapest way to send money internationally, with fees often lower than if you were to go via your bank and exchange rates more favourable. Find out more about how to find the best international money transfer service by reading our guide.

You can send money internationally electronically using a range of specialist services and apps, depending on your individual requirements. Find out more about how to send money abroad to see the kind of options available.