MoneyGram vs. PayPal vs. Xoom: Who Has the Lowest Fees? (2024)

The three leading money transfer services are PayPal, MoneyGram, and Xoom, which have varying levels of fees that can be calculated online, such as the MoneyGram fee estimator. Typically, these companies charge varying fees based on the origin country and receiving country; the size of the transfer; whether the recipient account is a bank account, debit or credit card, or other transfer accounts; and whether the transfer is between family members or in payment for goods.

In this article, we'll compare PayPal fees to MoneyGram fees and Xoom fees, all based on the type of transaction whether personal, commercial, or international.

Key Takeaways

  • PayPal, MoneyGram, and Xoom are the three leading money transfer services that can be used to send money to recipients in the United States and overseas.
  • PayPal does not charge a fee if both sender and recipient have a PayPal account and the funds do not come from a debit card, credit card, or PayPal credit.
  • MoneyGram fees range from $1.99 if no debit or credit card is used.
  • Xoom charges $5.99 for transactions up to $999, and $9.99 for transactions over that amount.
  • Online platforms aren't the only way to transfer money and you can turn to other more affordable options.

Transfer Fees: PayPal vs. MoneyGram vs. Xoom

Transfer fees are standard charges collected by these money transfer platforms in order for them to be profitable. While some can be thought of as service charges, other transfer fees are derived from other fees, such as international currency exchange fees, that are passed on to the individual. Transfer fees ultimately allow PayPal, MoneyGram, and Xoom to be profitable.

PayPal Transfer Fees

PayPal does not charge a fee, either to the sender or recipient, when funds are sent within the United States. Both sender and recipient must have PayPal accounts. The funds must come from their PayPal balance or linked bank account.

Fees are only charged on PayPal if the money is coming from a linked credit or debit card, if money is being sent internationally, or if you are collecting payment as a merchant or vendor. If the funds are coming from a credit card, debit card, or PayPal Credit, the platform charges 2.9% of the transaction plus 30 cents. PayPal also does not charge a fee for shoppers, whether online or in stores, operating instead like a secure bank account to pay for goods and services.

MoneyGram Transfer Fees

MoneyGram fees tend to be higher than PayPal's: for a direct transfer from a sender's online bank account, debit, or credit card to a recipient's debit card, the company charges a flat $1.99 fee. This fee applies whether the customer is sending $1 or the maximum $10,000. However, if the cash will be picked up in person at a MoneyGram location by the recipient, this fee jumps to $5.99 if coming from a bank account, and $13.99 if coming from a debit or credit card.

Xoom Transfer Fees

Xoom, which is owned by PayPal, charges a fee of 1% on all transactions up to $999, and $10 on transactions of $1,000 or more. Funding sources include PayPal USD, PayPal balance, bank account, debit card, or credit card (though additional fees may be charged by your card's issuer for the latter two options). Transactions of $10,000 and up to $19,999 require 24-hours to process. Transactions of $20,000 and up to $29,999 require 30 days and any amount over $30,000 will need 180 days to process. To understand how Xoom money transfers work, users can also estimate fees at Xoom's website.

PayPal Merchant Fees

PayPal offers a host of payment processing services for merchants. Its standard transaction fee is 3.49% plus 49 cents. If the PayPal account is located outside the U.S., the fee is 3.49% plus the fixed fee rate for the other country, plus an additional percentage-based fee for international commercial transactions of 1.5%.

International Transfer Fees: PayPal vs. MoneyGram vs. Xoom

When it comes to international transfer fees, a foreign currency exchange rate is involved, making the transaction more costly. In addition, platforms such as MoneyGram openly disclose that the company makes money off of the foreign currency spread, which fluctuates daily.

When sending money abroad, the service provider typically earns money on the foreign currency spread in addition to the stated fees being charged.

PayPal International Transfer Fees

PayPal charges a 5% transaction fee when U.S. account holders send money to other PayPal account holders located outside the U.S. A minimum fee of $0.99 applies, and the maximum fee is $4.99. If the funding source is a credit card or debit card, the account holder pays an additional 2.9% of the transaction amount, plus a fixed fee based on the currency.

MoneyGram International Transfer Fees

MoneyGram operates in more than 200 countries and territories. It has digital capabilities in more than 150 countries and 400,000 physical locations that are either company-owned or operated by a business agent. When it comes to global money transfers, the company earns revenue in two ways: on the transaction fee and also on the foreign currency spread.

A customer sending $100 to a bank account in Mexico would pay $1.99 if the funds originate from a debit and $6.49 if from a credit card. If the funds are being sent for cash pick-up, the MoneyGram fee charged for debit would be $3.99 and fee charged for credit is $8.49. As of April 2024, MoneyGram is quoting an exchange rate of 17.38 pesos to the dollar.

Xoom International Transfer Fees

Xoom, which also makes money on foreign currency transactions, offers a slightly better exchange rate of 16.79 pesos to the dollar as of April 2024. In addition, its fee structure is comparable to MoneyGram's.

On a $100 transfer, Xoom charges users $2.99 if the money comes from a PayPal balance or bank account and is deposited directly into a bank account, or $3.99 if the funds come from a debit or credit card. Fees for cash that is picked up by the recipient in person, no matter how it's sent, will be charged $3.99 in fees.

Comparing Fees Between MoneyGram, PayPal, and Xoom

Transfer fees range based on the kind of transaction you are trying to make. As a rule of thumb, PayPal is the best option to transfer money between bank accounts, MoneyGram or Xoom are usually cheaper for transferring money from a sender's debit or credit card to a recipient's bank account, and MoneyGram has no fee for international transfers.

Transfer Fees: MoneyGram, PayPal, Xoom
Transfer FeesPayPalMoneyGramXoom
Within the U.S.
(bank account→ bank account)
No fee$1.991% on all transactions up to $999, and $10 on transactions of $1,000 or more
Within the U.S. (debit/credit card→ bank account)2.9% of the transaction + $0.30 flat fee$1.99$1.99
International ($100 from U.S. to Mexico)$5.00No fee$2.99

MoneyGram Fees FAQs

What Are MoneyGram Fees?

MoneyGram fees are the service fees charged by the company in order to process your transaction. In the case of sending money internationally, MoneyGram fees also factor in a currency exchange rate fee. MoneyGram makes money from currency exchanges.

How Much Does It Cost to Send a MoneyGram at Walmart?

MoneyGram fees at Walmart are the same at any other MoneyGram location: typically a flat $1.99 for most transfers within the United States, if being sent directly to a recipient's bank account or debit card.

How Much Does MoneyGram Charge to Send $200?

Fees vary. Within the United States, for example, MoneyGram charges $2.99 to transfer $200 from a sender's debit card to a recipient's online bank account.

Which Is Cheaper: Western Union or MoneyGram?

Within the United States, Western Union is cheaper than MoneyGram to send $100 via an online bank account: $0 for Western Union compared to $1.89 for MoneyGram. And Western Union doesn't charge for sending via bank account or debit card, but does charge $2.50 for credit card funding. MoneyGram charges $6.59 for credit card funding.

How Do I Receive Money From MoneyGram?

Money can be received via MoneyGram through a direct online bank account or debit card deposit or picked up in cash at a MoneyGram location.

The Bottom Line

When using a money transfer platform, transaction fees vary greatly depending on how you are sending the money, where you're sending it, and how it will be received. Online platforms aren't the only way to transfer money, however: if these fees are too expensive for you, check out some other low-cost ways to transfer money.

MoneyGram vs. PayPal vs. Xoom: Who Has the Lowest Fees? (2024)

FAQs

MoneyGram vs. PayPal vs. Xoom: Who Has the Lowest Fees? ›

PayPal does not charge a fee if both sender and recipient have a PayPal account and the funds do not come from a debit card, credit card, or PayPal credit. MoneyGram fees range from $1.99 if no debit or credit card is used. Xoom charges $5.99 for transactions up to $999, and $9.99 for transactions over that amount.

What is cheaper than MoneyGram? ›

Western Union tends to provide cheaper fees while MoneyGram generally provides better exchange rates.

Is PayPal the cheapest way to transfer money? ›

Is it cheaper to send money with PayPal or a bank transfer? The cheapest option for sending money all depends on who you bank with, as well as where you're sending to (and in which currency).

How much does Xoom charge for PayPal balance? ›

How much does Xoom really cost?
Xoom international transferFeeⁱ
PayPal balance transaction fee$0 - $10, depending on currency and transfer amount
Credit or debit card transaction feeMinimum of $1.99, but can rise substantially depending on currency and transfer amount
2 more rows

Is it cheaper to send money through Western Union or PayPal? ›

If you're sending smaller amounts, you could pay minimal fees with PayPal — again, depending on where you're sending it. For larger amounts, Western Union may be the more ideal provider. For instance, sending $100 using Western Union can cost you as much as 10%, while PayPal transfers can come up to $8.

Is PayPal cheaper than MoneyGram? ›

As a rule of thumb, PayPal is the best option to transfer money between bank accounts, MoneyGram or Xoom are usually cheaper for transferring money from a sender's debit or credit card to a recipient's bank account, and MoneyGram has no fee for international transfers.

Is Xoom cheaper than PayPal? ›

Additionally, when sending money internationally, PayPal may apply an exchange rate markup. In contrast, Xoom offers predictable and competitive exchange rates with no hidden fees for international transfers, making it a cost-effective choice for sending money abroad.

Who has lower fees than PayPal? ›

Stripe offers both online and in-person payment options. While PayPal's card transaction fee is 2.99%, plus a 49-cent fee, Stripe's 2.7% plus 5 cents per card transaction fee makes it a better option for budget-conscious businesses.

Which money transfer method is cheapest? ›

Funding your money transfer with a bank transfer is usually the cheapest way to send money abroad.

How much is the PayPal fee for $100? ›

PayPal Fee Calculation Formula and Example
Transaction AmountDomestic FeeInternational Fee (Example: UK)
$10$0.30$0.44 + £0.39
$50$1.50$2.24 + £0.39
$100$2.99$4.49 + £0.39

Does MoneyGram charge a fee? ›

Fees vary based on a range of factors, such as where you are sending, how much, and the payment and receive method chosen. If you pay with your credit or debit card, the fees are slightly higher. Enjoy more peace of mind by estimating transfer fees and exchange rates on MoneyGram's estimator.

What is the Xoom exchange rate? ›

Xoom exchange rate
CurrencyShould arriveExchange rate
USD US dollarwithin 1 day1.28918
EUR Eurowithin 3 hours1.16966
INR Indian rupeewithin 2 hours108.877
PKR Pakistani rupeewithin 1 day356.971
5 more rows

Why did Xoom charge me? ›

Transaction Fees.

For each Transaction that you submit, you agree to pay Xoom's transaction fee (the "Transaction Fee"), if applicable, plus the Transaction Amount. Any Transaction Fee will be disclosed to you prior to you authorizing a Transaction.

Is Western Union or MoneyGram cheaper? ›

Is Western Union or MoneyGram cheaper? MoneyGram has marginally cheaper additional fees when sending money to foreign bank accounts. However, both have very high exchange rate margin fees. These can sometimes be in excess of 5%.

Which way is cheaper to send money? ›

A transfer paid by bank account directly tends to be a much cheaper (and much slower) transfer. If you need money delivered quickly, use a debit card, which will also incur a lower fee than using a credit card.

How to send money internationally for free? ›

OFX. OFX does not charge any fees, and the exchange rate is less than 1%, but all transfers must occur within bank accounts, and it typically takes two to four days for your recipient to get the money. The company can transfer money to over 170 countries or 50-plus currencies.

What's the cheapest way to receive money? ›

ACH (Automated Clearing House) transfers are one of the most affordable ways to receive payments online. The fees involved are usually much lower than those charged by credit or debit card companies. This makes ACH transfers very popular in the world of ecommerce.

How much does Western Union charge to send $1 000? ›

Assuming you're sending bank-to-bank, Western Union generally charges between $6.47 and $37.60 to send $1,000. However, the costs could still be higher if you choose a different sending or receiving method. How much does Western Union charge to send $5,000?

What is the disadvantage of MoneyGram? ›

While MoneyGram is well-known for fast and reliable international money transfers, it is one of the most expensive options for many consumers. MoneyGram has higher fees for transfers and a greater markup on the mid-market exchange rate.

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