What PayPal is and who it suits
PayPal is an online service used for payments and transferring money, best known for letting you pay online stores or send money to other PayPal users. You can also send money internationally to friends or family through its personal transfer option. The company has been operating since 1998 and is based in San Jose, US.
If you shop online a lot and want to pay sellers without entering card numbers every time, PayPal can make things easier. For someone making regular, larger transfers across borders, the cost of conversion might matter more. This review is produced for editorial purposes only, not as financial advice. GoldexPay may receive income from some links here, though that doesn't influence our rankings at all.
How PayPal's costs work
When you send money abroad with PayPal, the total cost is made up of two things: a visible transfer fee, and a currency conversion markup. That markup is the difference between PayPal’s exchange rate and the real, mid-market exchange rate. It isn’t always obvious, since PayPal doesn’t present it as a separate cost.
What matters to you is what the recipient actually receives, so compare using the total after every fee and rate difference is applied. That’s exactly how our table above calculates the real amount. The conversion markup at PayPal is higher than with some specialized money transfer providers, and as you send more, the effect of international fees grows. Enter your amount in the comparison to see where PayPal stands for you right now.
Speed, payment methods and limits
Sending to another PayPal account is almost instant in most cases. If you’re transferring money internationally to a bank account, PayPal lists these as fast, but how quickly it lands can differ. The bank, the local currency or extra verification can slow things down, especially on weekends or public holidays.
You’re able to fund your PayPal payment by regular bank transfer or with a card, depending on which country you live in. Cards are usually faster (though they might cost more), so it pays to check every detail before going ahead. Limits depend on your account history, what type of verification you’ve done, and your country. If you try to send a larger sum, PayPal could need more documents or even put a temporary hold on the payment.
Worked example: a Canadian buying from a German shop
Say you’re in Toronto and want to purchase a rare camera lens from a small business in Germany. The price is in euros, and PayPal is the payment option.
At the checkout page, pick PayPal and log in to the account with your Canadian credit card. You might see a choice: pay in euros or pay in Canadian dollars. That one click decides who handles the conversion and what rate you get.
Compare PayPal’s conversion with the estimate from your own card provider, including the card’s foreign transaction fee for that euro amount. Go ahead only if you’re satisfied the final total fits your budget and expected rate.
Check your account statement after the lens arrives to confirm all charges. Hold onto any emails and shop receipts, just in case you get a faulty lens and need to use PayPal’s buyer protection process later.
Safety and regulation
PayPal’s main European operation has a banking license from Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier (CSSF). You can look up the company on official registers if you want to confirm its status. While this oversight requires strict procedures for customer money, it doesn’t cover losses from exchange rate changes, and won’t protect you if you approve a payment after being deceived.
For your security, use a complex password and enable two-step authentication. Never follow a link from unexpected messages that pretend to be PayPal.
Pros, cons and when to choose an alternative
Pros
- Widely accepted by online retailers and stores.
- Transfers between PayPal holders can happen nearly in real time.
- Eligible purchases may benefit from buyer protection.
- Supervised by an EU financial authority.
Cons
- Currency conversion markups are higher than those of specialized services.
- International transfer fees increase with high-value transfers.
- Account restrictions or holds are possible during checks.
If your main goal is to send international payments, Wise is often better value. For those needing to send cash for face-to-face pickup, Remitly or Western Union provide this option.