Send money overseas: 5 options cheaper than PayPal

by Rob Rawson
send money overseas

At Time Doctor, we have a lot of customers who have employees/freelancers in other countries. One of the things we’re trying to do is to help our customers to find the lowest cost method to send money overseas so they can transfer money to those employees.

PayPal is one of the easiest ways to transfer money, but it’s often not the cheapest.

How much does it cost to send money via PayPal?

The cheapest legitimate transfer method on PayPal is “Mass Pay”.

This is an easy way to pay several people at once by uploading a CSV spreadsheet of all the payment amounts. The cost is usually 2% to a maximum of $20 for offshore payments. The maximum fee can vary based on the sending & receiving countries. You can see the fees for your countries using the form on the right side of this page. If you send payments on PayPal without using Mass Pay then the cost will be higher, at around 4%.

Also remember that for global payments PayPal also charges a currency conversion fee which is actually a hidden fee, but it often comes out to around 2.5%, and is a cost on top PayPal’s stated 2% fee.

There may also be some fees charged to your employees by their local banks when they withdraw the payments you’ve sent them.

So the total cost? Let’s look at an example: If you send $1,000 from the US to one employee in the Philippines,PayPal will charge 2% ($20), plus an extra approximately 2.5% ($25) for the currency conversion, so the total cost will be 4.5% ($45).

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The reason I said the cheapest “legitimate” method of sending money via PayPal is that some people will pay employees through PayPal, but claim that they’re transferring the money to a friend or relative. In this case 2% or 4% fee is waived, however the hidden currency conversion fee is still there. This is against the PayPal terms of service and I imagine would be problematic when sending larger amounts of money.

Declaring that your transfer was to a friend or relative may also get you into hot water with your own tax authorities when you try to claim it as a business expense. We suggest always being honest & following the terms of service.

How to determine the HIDDEN currency conversion fee?

Most transfer services will not tell you how much they charge for exchanging money. Sometimes these charges can be very high. PayPal charges around 2.5% in our experience, although this rate can vary depending on the currency.

Banks also can charge exorbitant rates when transferring money overseas. As the rate is usually not declared there’s little incentive to charge a reasonable fee. For example most Australian banks will charge at least 2% and sometimes as high as 4% when converting money to other currencies. US banks generally charge lower rates but it’s unlikely you’ll find a bank that charges under 1% to convert between currencies.

Since the currency conversion fee is not declared, you’ll need to calculate it yourself. The way you can calculate it is to divide the currency conversion rate that they give you by the inter-bank rate at the time of the transfer. The inter-bank rate is the rate at which banks trade with each other. It’s the true market rate for exchanging currencies. You can find the inter-bank rate at

Let’s look at a specific example. Let’s say you want to send money from the US to India using Western Union. According to the Western Union website, they’ll convert 1 US dollar into 61.1620 Indian Rupees. On the Oanda site, 1 US dollar converts into 61.7196 Indian Rupees.

Western Union: 1 USD = 61.1620 INR
Interbank Rate: 1 USD = 61.7196 INR

To determine the amount being charged by Western Union on the exchange, you just need to find the difference between the 2 amounts and turn it into a percentage:

61.7196 – 61.1620 = 0.5476
0.5476 / 61.7196 = 0.88%

So Western Union would charge 0.88% on this transaction (far below PayPal’s ~2.5%). This is an approximate calculation because the rates will vary throughout the day.

Local transfer fees

On top of the stated fees and hidden fees of the money transfer service that you’re using, there will often be some cost to transfer your funds to the transfer service in your own country, and then from the transfer service to your employee in the receiving country.

These fees are usually minimal and don’t vary between transfer methods, but it’s good to be aware that they exist.

For example if you want to transfer $1,000 from the US to your employee in the Philippines using Wise, formerly TransferWise (one of the methods listed below), you’ll need to first get the $1,000 to Wise. This can be done through the ACH system in the US and usually costs less than $1 per transfer.

To do this you will need to make sure that your bank account is able to money via ACH. Most banks in the US will provide an ACH service only to business accounts. Sending the money to Wise via a wire transfer is a lot more expensive and can cost between $15 and $40.

Local banks in the Philippines may also charge some small amount to receive the money from Wise into your employee’s bank account.

The hassle factor in transferring money to remote employees

PayPal is one of the easiest ways to transfer money to workers because it only requires that you know the email address of the recipient and it takes just a few clicks to send the money.

Also PayPal will automatically debit your bank account and withdraw the money you need to send it to the recipient. Most other transfer methods require several more steps and do not automatically withdraw the money from your bank account. You’ll need to consider whether the money saved is worth the extra hassle.

If you’re paying several workers you may save thousands of dollars which might be worth a bit of hassle and time on your part.

Comparison of payment methods

Let’s take a look at some other options for transferring money. We’ve created three tables so that you can compare the fees in each situation.

Table 1 – Moving $500 USD to Indian Rupees in India (paying 1 employee for example)
Method Stated Fees Hidden currency conversion fee Total Cost ($) Total Cost (%) Speed Hassle
Wise, formerly TransferWise $4.50 $0 $4.50 1% 1-2 days Low
Money Gram $0 $2.50 $2.50 0.5% 3-5 days Medium
Western Union $0 $3.50 $3.50 0.7% 3-5 days Medium
Ria Money Transfer $3 $3 $6 1.2% 3-5 days Medium
Xoom $2.99 $7.50 $10.49 2.1% 3-5 days Medium $3.99 $12.50 $16.49 3.3% 3-5 days Medium
PayPal Mass Pay $10 $12.50 $22.50 4.5% 3-5 days Low
PayPal Normal Payment $20 $12.50 $32.50 6.5% 3-5 days Low
Wire (Swift) $25-40 $5-10 $30-50 6-10% 3-5 days Medium
Upwork (formerly oDesk) $57.54 $10 $67.54 13.5% 2-4 days Low

Notes re this table:

  1. If you already have money in your PayPal account the transfer will be instant, but if you need to withdraw from your bank account it will take 3-5 days.
  2. Western Union and Money Gram appear to be the lowest cost transfer methods however their fees are much higher for sending from all other countries other than the USA and their fees vary even within the US.
  3. The rates in this table are using the lowest cost transfer option which usually takes several days and means the recipient will get the money to their bank account. There is an option to transfer instantly on Western Union but the cost is a lot higher.
  4. Hidden currency conversion fees are approximate and calculated to the best of our ability.
  5. WorldRemit is only available from a few US states.
  6. OFX is another option if you are sending larger amounts of money. The standard transfer fee is $5 and their exchange rate fee goes down for larger amounts.
Table 2 – Moving $12,500 USD to PHP in the Philippines (paying 25 employees $500 each)
Method Stated Fees Hidden currency conversion Fee Total Cost ($) Total Cost (%) Speed Hassle
Wise, formerly TransferWise $125 $0 $125 1% 1-2 days Low
Western Union $0 $100 $100 0.8% 3-5 days High
Ria Money Transfer $75 $56.25 $131.25 1% 3-5 days High
ko-kard $175 $112.50 $287.50 2.3% 3-5 days Medium
Money Gram $75 $275 $350 2.8% 3-5 days High
PayPal Mass Pay $250 $312.50 $562.50 4.5% 3-5 days Low $300 $312.50 $612.50 4.9% 3-5 days High
PayPal Normal Payment $500 $312.50 $812.50 6.5% 3-5 days Medium
Upwork (formerly oDesk) $1414 $250 $1664 13.3% 2-4 days Low

Notes re this table:

  1. The Western Union public consumer website is not designed for transfers to multiple recipients for business purposes. I am unsure of the consenquences or legality of using it for this business purpose. Western Union does have a corporate transfer service, which allows you to upload all transfers as one spreadsheet (low hassle factor), however the rates will not be the same as listed above. I believe that they will be significantly higher than listed above although still below PayPal.
  2. Wire transfers are not included in this table as sending individual wires to 25 people in the Philippines is very expensive and a very high hassle factor so it’s not a viable option.
  3. Ko-kard is only available to send money to the Philippines
  4. OFX is another option if you are sending larger amounts of money. The standard transfer fee is $5 and their exchange rate fee goes down for larger amounts.

Table 3 – Overall cost in percentage for transferring various currency amounts to various countries
Method $500 USD to the Philippines $550 AUD to the Philippines* $550 CAD to Philippines* 320 UK Pounds to Philippines $500 USD to India $2000 USD to Russia $2000 USD to Ukraine
Wise, formerly TransferWise 1% 1% Not Available 1% 1% Not Available 2.9%
Money Gram 0.5% 2.8% 3.4% 7.2% 0.5% 2.5% 0.75%
Western Union 0.8% 3.6% 4.3% 2.5% 0.7% 2.5% 0.75%
Ria Money Transfer 1.2% Not Available Not Available Not Available 1.2% 0.25% 0.25%
Xoom 2% Not Available Not Available Not Available 2.1% Not Available Not Available
Ko-kard 2.3% 3.9% 3.9% 3.9% Not Available Not Available Not Available
Payoneer 2.5-5% Not Available Not Available Not Available 2.5-5% 2-4.5% 2-4.5% 3.3% 3.7% 3.9% 4% 3.3% Not Available Not Available
PayPal Mass Pay 4.5% 5.5% 6% 6% 4.5% Not Available Not Available
PayPal Normal Payment 6.5% 7.5% 8% 8% 6.5% Not Available Not Available
Wire (Swift) 6-10% 8-12.5% 6-12.5% 6.5-12.5% 6-10% 2-6% 2-6%
Upwork (formerly oDesk) 13.5% 16% 16% 16% 13.5% 13.5% 13.5%

*AUD denotes Australian Dollars, CAD denotes Canadian Dollars

Notes re this table:

  1. The percentage cost adds up the total amount of declared fees and our best estimate of hidden currency conversion fees.
  2. It is very difficult to withdraw money from PayPal in Ukraine and Russia to convert it to local currency.
  3. We have read reports that Xoom has disabled accounts sending to multiple employees for business purposes.
  4. Fees for Payoneer vary significantly depending on several factors. Payoneer uses either a card to withdraw from the ATM or a bank transfer and fees vary for each of these two methods. Fees also vary based on how often the person withdraws from the ATM machine.
  5. Another option for sending larger amounts of money is OFX. The standard transfer fees are as follows: $5 (US), 15 AUD (Australia), 15 CAD (Canada), 7 GBP (UK). Their exchange rate fees go down for larger amounts.

Here’s a further explanation of some of the options:

western union

Western Union

It can be surprisingly inexpensive to send money from the US via the public (not corporate) Western Union website, however it’s significantly more expensive to send money from most other countries.

For example sending money using the public Western Union in Australia only has a credit card option and for that reason alone it’s more expensive than sending via a bank account.

Western Union corporate is available in Australia, Canada and the UK for sending to large number of employees and is significantly cheaper than PayPal.

wise logo

Wise, formerly TransferWise

This method costs 0.5% of the transfer amount plus 1 pound (approximately $1.5 USD), for sending from most locations which is cheaper than most other methods. When you compare Wise vs Western Union or Wise vs Paypal, the rates for sending US dollars are higher starting at $3 for a transfer of $300 or lower and then 1% above this amount. There will also be some fees charged by your bank when sending the money via a local transfer method.

Wise can send money in the following currencies: Euros, Pounds, USD, Australian Dollars, Swiss Franc, Canadian Dollars, Polish Zloty, Swedish Krona, Norwegian Krone, Danish Krone, Hungarian Forint, Czech Koruna, Bulgarian Lev, Georgian Lari, Romanian Leu, Turkish Lira, Philippines Pesos, Thai Baht, Indian Rupee, Singapore Dollars, New Zealand Dollars, Hong Kong Dollars and Malaysian Ringgit.



This option is available to send money from most western countries but is not available from every US state. The fees for transferring $1,000 from the US to the Philippines are $14 plus approximately 1.4% currency conversion fee.

The total fee to send $1,000 from the US to the Philippines was $28 when I calculated it.



This method has an option to send money overseas via bank transfer or to a pre-paid card where the recipient can withdraw money from an ATM machine.

This is not necessarily cheaper than transfers with PayPal; however it is useful because in countries such as Ukraine or Russia it is very difficult to withdraw money from PayPal and receive local currency.

Another benefit of Payoneer is that recipients can withdraw their Payoneer funds directly from an ATM, whereas with PayPal where they’d probably only have the option to withdraw to a bank account. Payoneer only works with larger businesses, so if you’re paying just a few employees, Payoneer likely won’t accept you.

The good news is that we’re working on an Integration between Payoneer and Time Doctor at the moment.



This is a payment method specifically for payments to the Philippines. It sends money to individuals to a debit card that they receive in the mail. This has the advantage that the recipient does not need to set up a bank account in order to receive the money.



Lower cost than PayPal but they do not accept business transactions like paying workers.

International Wires (“Swift”)

Swift transfers are often used for international wire transfers from one bank to another.

Most US banks charge $25 – $40 to send an international wire via the Swift system. Some banks will require you to physically visit the bank branch to initiate a wire transfer which is a major hassle factor, and if your bank requires this I would look for another bank.

Also there will be additional fees for recipients in the foreign country when receiving money via a wire which can be as high as $20. This means that sending money via an international wire transfer with your bank usually only makes sense for larger amounts of money (at least $2000).

Wire transfer fees and the hidden currency conversion fees vary for each bank so it’s difficult to give an accurate figure for how much it costs.

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