Through the past years, the evolution of smartphones led us to discover and create many possibilities that were previously unimaginable. The era of check payments and paper waste is now far gone, replaced by the ability to send money in every corner of the globe within seconds, easy and safe, just with a few clicks on your mobile device. But what are those money transfer apps and how do they work?
Money transfer apps are also known as peer-to-peer money transfer applications. This indicates that there is no need for a middleman because the recipient of the payments can get the money directly into their bank account or digital wallet. They make payments simpler and provide you the option to link your bank or credit card account to a digital wallet. They are designed to be compatible with both Android and iOS and are usually free to download and used, as they earn money through the fees people need to pay for every transaction they make.
Why should I use money transfer apps?
The reasons are pretty much obvious. Unlike other conventional means, you can send money to people within your country or around the globe within seconds, anytime you decide, wherever you may be, just by using your phone and having an internet connection. In addition to that, it is also usually way cheaper, in some cases totally free of charge and way more secure. You can also keep track of your processed payments as well as create automatic payments to be done in the future.
Below you will see a comparison between our selected top 3 money transfer apps, Western Union, Wise and Paypal, with all information corresponding to 5th October 2022.
Western Union is one of the largest and most recognized money transfer providers that are still in business. Founded in 1851 as the New York and Mississippi Valley Printing Telegraph Company has now grown with a network of over 500,000 agent locations across 200 countries and territories globally. Through the last years they have made their appearance across the internet too, creating their own application and providing the opportunity to the vast crowd to send money online.
Wise (former TransferWise) is one of the biggest money transfer providers in the world. Founded in January of 2011 in London by two friends, one of which was Skype’s first employee, had just one goal. Make money transfers cheaper, easier and more secure. It has a great reputation for offering a low-cost, dependable service accompanied by an extraordinary fee transparency, as you can determine the cost of every feature they provide in advance, through their website.
Don’t miss the chance to learn more about Wise. Read our article about it NOW!
PayPal is unquestionably a leader in online shopping and digital payments, providing simple ways to send and spend money, make purchases online and monitor your finances. Founded in 1998 as an e-wallet service is now one of the most well-known money transfer apps, counting more than 400 million users in various countries through the years of its operation. In addition to that, during 2015, PayPal acquired the online money transfer business Xoom in an attempt to expand.
Let’s take a look to a brief comparison regarding their features:
| Western Union | Wise | PayPal | |
|---|---|---|---|
|
Founded |
1851 |
2011 |
1998 |
|
Publicly Listed |
|
|
|
|
Fully Licensed |
|
|
|
|
Debit Card |
|
|
|
|
Credit Card |
|
|
|
|
Business Account |
|
|
|
|
Minimum Transfer |
1 USD |
1 USD |
1 USD |
|
Maximum Transfer |
50,000 USD |
1,000,000 USD |
60,000 USD |
|
Currencies |
40 |
53 |
25 |
|
Countries |
200+ |
80+ |
200+ |
What about their fees, speed and safety?
Western Union:
- Having an account at Western Union is free of cost. Their transaction fees vary. There is a 5 USD fixed fee per transfer for e-Transfers sent through Interac, plus a 1% commission fee on the total amount per transfer.
- Domestic money transfers are typically completed in 24 hours while international money transfers are completed in one to five business days.
- Fully regulated in the USA with FinCEN as well as with different organizations in other countries such as FCA (UK), NBB (EU/EEA), etc.
Wise:
- Wise accounts are free of charge , unless you want to upgrade to a specific bundle with a monthly cost in order to obtain more features and lower fees. Transaction fees start from 0,41% of the transferring amount and vary by currency. There is a 9 USD fee for purchasing their debit card with any subscription costs and you can also withdraw up to 100 USD per month (made in 2 transactions maximum) for free. After that they charge 1.50 USD per withdrawal.
- Transactions are pretty fast with 45% of them getting completed instant while 80% of them arrive within 1 business day.
- Fully regulated in the USA with FinCEN as well as with different organizations in other countries such as FCA (UK), NBB (EU/EEA), etc.
PayPal:
- As the previous companies, running a Paypal account is free of charge. Transactions within Paypal accounts are totally free with no hidden costs, while charging 5% of the total amount for transfers to other accounts, starting from 0.99 USD to 4.99 USD. Regarding their debit card there is no monthly or starting fee but you will be charged an amount of 3.95 USD when loading cash to your PayPal balance.
- Most transactions through PayPal are instant, getting completed within 30 minutes, with the longest ones taking from 1-3 business days.
- Fully regulated in the USA with FinCEN as well as with different organizations in other countries such as FCA (UK), NBB (EU/EEA), etc.
Let’s take it one step further though. When it comes to transactions, which one is the cheapest:
Receiving amount after fees are applied
USD – EUR Conversion
| Amount | Western Union | Wise | PayPal |
|---|---|---|---|
|
1,000 USD to EUR |
1,003.90 EUR |
1,003.22 EUR |
931.92 EUR |
|
3,000 USD to EUR |
3,024.30 EUR |
3,010.96 EUR |
2,796.36 EUR |
|
5,000 USD to EUR |
5,040.50 EUR |
5,020.68 EUR |
4,660.80 EUR |
USD – GBP Conversion
| Amount | Western Union | Wise | PayPal |
|---|---|---|---|
|
1,000 USD to GBP |
881.30 GBP |
878.52 GBP |
820.88 GBP |
|
3,000 USD to GBP |
2,642.70 GBP |
2,637.58 GBP |
2,463.15 GBP |
|
5,000 USD to GBP |
4,404.50 GBP |
4,396.40 GBP |
4,105.41 GBP |
Information above is shown after running a simulation according to conversion rates of 6th October 2022.
When it comes to numbers it’s pretty obvious what is the most cheap way to send and receive your money. However, it is not the only factor that should contribute in making your decision. Let’s have a quick look on what the reputation of each company is, according to their customer’s reviews through a well-known website called Trustpilot:
Western Union
Overall Rating: 4/5 ★ based on 36,287 user ratings:
- 63% of the users rated WU with a 5/5 ★ rating.
- 13% chose 4/5 ★ as the appropriate rating.
- 16% of the users were really dissatisfied, leaving a rating of 1/5 ★.
Wise
Overall Rating: 4.5/5 ★ based on 174,201 user ratings:
- 84% of Wise’s clients were really satisfied, rating it with 5/5 ★.
- Just 6% of the users were left really dissatisfied, rating the company with 1/5 ★.
PayPal
Overall Rating: 1.3/5 ★ based on 22,886 user ratings:
- Barely 10% of the users were satisfied, rating PayPal with a rating of 4/5 ★ or higher.
- 87% of PayPal’s reviewers rated their experience with the company as really unsatisfying, giving a rating of 1/5 ★.
All three companies have their names connected with ‘’innovation’’ and ‘’evolution’’ through their years of existence. A definite choice cannot be made when it comes to which one of them is the best, as there are factors like purpose of use, country of residency, etc. that can change the reply to that question every time. Western Union is a really old company, withstanding every difficulty since it was founded and it is also the only one that provides the option to visit one of their agent locations in real time. Wise, despite the fact that it is relatively recent in this market, has a great reputation within its clients and is also famous for its complete transparency regarding its fees. PayPal is unquestionably the No1 company that comes to mind when talking about online payments and secure online transactions. However, their reputation has been affected by their hidden and high fees as well as their low exchange rates. Take everything into consideration and decide which one is the best for YOU!
Vaggelis Moutsios
Vaggelis Moutsios is a newly inspired author and a book lover since a young age. Born in Agrinio, Greece, graduate in Physical Education and Sport Science at Democritus University of Thrace, he decided to make a turn to his professional career. Remote work and the freedom it provides earned him. Following his passion for writing combined with his 6 years experience in the WFH market, he dedicated himself into introducing this world to more and more people.
