When to use Paypal or Wire Transfer?

Paypal and bank wire transfer are both electronic ways of sending (purchasing) and receiving money to or from other foreign countries. Money transfer through Paypal seems easy to execute since you have the control of executing the transfer, online, and no need to go to the bank – just use your Credit Card. However, it usually took approximately 3-days to receive the payment, unlike wire transfer which, usually, could receive the money within the day when it was sent.

The fee or charge for the transaction, is of course a major factor here, and could be the deciding factor of which one to use.

The transaction fee for Paypal is a percentage of the money sent or received. As of this posting date, the rate is 3.4% + a fixed amount of $0.30. On the other hand,   charge or fee for the wire transfer is fixed to a certain amount, typically US$15-30 plus the same amount if the receiving bank is not a corresponding bank of the bank where you are sending the money.

Thus, it is quite obvious that you can save transaction fees if you use Paypal for small amount of money transfer or purchases, less than approximately $873.0; And use wire transfer if the money involved is of greater amount, more than $873. The computation is based on the assumption that the Paypal fee is 3.4%+$0.3 and wire transfer fee of $30.

Filed in: Internet - General, Money and Investing
Local date: March, 2010

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