Understanding PayPal Wire Transfers and How to Do Them

Looking to expand your payment options past PayPal? Check out our latest payment method guide for more.

The gig economy is alive and well. In its wake, brands surrounding the business model have flourished. Reports show, if the gig economy keeps growing at its current rate, more than 50% of the United Kingdom workforce will participate in it by 2027.

This is why the stock for PayPal continues to soar as more people adapt to a freelancing society. They need a place to transact internationally and receive secure payments.

What is PayPal?

Whether you send money or receive it, PayPal is one of the most trusted online payment systems in the world. It serves as an alternative to traditional paper methods like cheques and money orders. PayPal is based on email addresses, which makes transferring money easy. The funds are pulled directly from your PayPal balance or a linked bank account.

The PayPal process is based on a person-to-person transaction between account holders in the system. Both parties must have an account to move money. You cannot receive or transfer money without one.

If your account is verified, there is no maximum amount or cap on what you can send. In a single transaction, you may transfer up to £60,000, but might be limited to £10,000 in some cases. This is due to different currency conversion and exchange rates.

The platform offers 24/7 fraud detection monitoring and will alert you if any suspicious activity takes place. PayPal also lets you check out faster online with a one-click payment method. A business can even link their credit card to a PayPal account and still receive all the points, miles, and rewards they would with a normal card. Your PayPal money goes a long way!

PayPal is one of the fastest money transfer services online and in the UK. It only takes 1-2 business days for the funds to hit your local bank. 

A PayPal wire transfer is still one of the quickest and most trusted ways to transact.

Setting up a PayPal Account

Although setting up a PayPal account is free, you still need to provide enough personal and financial data to make it secure. This includes your contact and bank account information. You can also add a credit card or debit card depending on how you want to do business. It’s a centralised location for all your finance channels.

You must first verify you are the rightful owner of the account. This is done by scanning a photo ID along with other required documents (proof of address, etc).

Users also have the option to download the PayPal mobile app. The app allows you to easily send a money transfer to friends and family from anywhere. The app is free and has features like built-in donations and payment tracking.

Are you a fast-growing, digital-first business that caters to a variety of partners?

Then you need to know the quickest and most efficient ways to pay them!

PayPal Charges

PayPal’s fees can rack up. This is how they stay in business since accounts are free. There is no fixed fee because the rates for an international money transfer vary by country. If you are sending a personal transaction to friends or family, the PayPal wire transfer fee is considerably low. It’s free within the UK, and 5% of the transaction amount internationally. 

Receiving Domestic Transactions

When you buy or sell goods or services, receive payments through QR Codes, make any other commercial type of transaction, or receive a payment when you “request money” using PayPal, it’s called a “commercial transaction.”

Payment TypeRate
Card funded payment from a user1.2% + fixed fee
QR Code Transactions – GBP 10.01 and above1.5% + fixed fee
QR code Transactions – GBP 10.00 and below2% + fixed fee
All Other Commercial Transactions2.9% + fixed fee

Receiving International Transactions

The fee for receiving domestic commercial and QR Code transactions applies, plus the additional percentage-based fee for international commercial transactions. The fee is 1.29% for senders from the EEA, and 1.99% for senders from all other markets.

There is also an additional fee for recipients of EEA-based international commercial transactions. In this case, the fee is also 1.29% of the transaction.

Card Payments

If you fund a wire transfer from PayPal (or to PayPal) using a credit card, debit card, or PayPal credit, your fees increase. The cost, in this case, ranges from 1.2% to 3.4% of the total transaction amount, plus a small fixed fee (depending on the currency involved).

Mass Pay

PayPal Payouts (the feature used for mass payments) also charges a fee for domestic and international payments. In both cases, this is 2% of the total transaction amount.

Currency Conversion

If you are using PayPal to send money internationally, you pay a currency conversion fee of 3% above the base exchange rate. This cost is added to the wholesale exchange rate. This means PayPal takes the exchange rate of a third party and adds its conversion spread. This can vastly increase charges depending upon the mid-market rate. That’s what makes Xoom and Transferwise smart alternatives for international business.

International Transfers

When arranging to send or receive money overseas, PayPal account holders generally use Xoom. It’s a PayPal service that is an electronic transfer and remittance provider for sending money internationally. Consumers can transfer funds, pay bills, and reload phones from the United Kingdom and Canada to 131 countries globally.

Xoom offers a money-back guarantee with SMS alerts for your peace of mind. The fees for the app vary by country. It won’t be the same to send cash to Albania as it is in Hong Kong. There’s no need to Google the exchange rate, however, because the platform does everything for you. Their pricing is completely transparent.

Transferwise is another option for a PayPal international transfer. The brand supports more than 750 different currency routes across the world, including:

  • EUR
  • USD
  • GBP
  • AUD
  • CAD

They also provide multi-currency accounts to facilitate international business. The service is free, and pricing varies by the exchange rate. Transferwise is a great brand in the sense that the costs are transparent, and they offer the lowest rates on the market.

PayPal Mastercard

To access your funds immediately, you can sign up for the PayPal Cash Card. This is not a credit card, and PayPal is not a bank. Therefore, the brand itself does not take deposits.

Rather, it’s an exchange between you and another party (with PayPal being the middle entity). You do not receive any interest rates on the card, but they can be used anywhere Mastercard is accepted (it does not come in Visa form).

You can also use the card at an ATM to withdraw your funds immediately. The limit is usually £300 per transaction, with a £2 fee. Daily limits may vary by account holder. Remember, this is not PayPal credit. If there are no funds in your account, the card may be declined or pull from your financial institution (depending on your settings).

How to Perform a PayPal Wire Transfer

As PayPal is the global leader in digital payments, they have a lot of partners to help get the job done. To send a PayPal wire transfer through, just complete these simple steps:

  • Securely link your bank account, credit, or debit card information to send money.
  • Enter the email or mobile number of the recipient.
  • The funds are deposited straight into their PayPal account.
  • Notifications are automatically sent out to the recipient.

The process is as simple as that. Keep in mind the type of transfer you wish to make. Some of the PayPal partners offer much cheaper rates for international transactions. Overall, PayPal is a brand you can trust. The company always offers leading-industry security for any transaction you make online.

Now that you have a more thorough understanding of making a wire transfer with PayPal, have you considered additional payment options? It’s possible your partners are using something else. Check out our latest ebook, Comparing the Top Global Payment Methods, for more.

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