Western Union vs PayPal: Which Is Better for Sending Money Abroad?

Among the many payment platforms available on the market, Western Union and PayPal are some of the most popular choices. But managing international business payments is rarely straightforward. Amidst fluctuating exchange rates, platform fees, and processing times, several things can complicate the process. That’s why choosing a platform just because everyone else uses it is far from prudent.

Instead, take the time to understand what each platform truly offers, and how it aligns with your business needs. To make that easier, here’s a clear breakdown of Western Union vs. PayPal, so you can decide which works best for sending or receiving money across borders.

Western Union is a financial services company that allows individuals and businesses to send and receive money internationally. It is known for using a wide variety of payment and delivery methods. Apart from digital transfers, it also allows cash transfers with the help of a network of agent locations. 

PayPal is also a payment platform that largely deals with online payments. Its users include individuals and different types of businesses, like SMBs, enterprises, startups, and solopreneurs. It is known for quick setup and a simple interface. 

Xflow is another payment platform that offers payment solutions to Indian businesses of all sizes. With faster settlement times, real-time FX conversions, and automated compliance with significant regulations, Xflow stands out as one of the most efficient and reliable ways to manage your cross-border payments.

Most of the services of both Western Union and PayPal overlap. However, there might be some changes in how they operate. The following are the core features of Western Union: 

• Support for several payment methods, including bank transfers, credit/debit cards, or cash.
• Online transfers as well as in-person cash pickup at an agent location. 
• Rapid cash pickups that can be processed within minutes.
• In-person verification, fraud protection, and encryption for safe transactions. 
• A vast network of agent locations for money transfers. 
• Unique tracking number, MTCN, for tracking your transactions. 

Here’s what PayPal can do for you:

• Online and in-person payments.
• PayPal Debit/Credit cards for online and in-store purchases.
• Buyer and seller protection for authorized transactions. 
• Monthly digital FIRA of all inbound transactions.
• Transactions in multiple currencies with automatic withdrawal in INR.
• Customizable invoices with tracking and payment reminders.

Western Union doesn’t declare a fixed price for the transfers. The transfer fee keeps changing depending on the destination country, the amount, and the payment method you’ve selected. Same goes for the currency conversion fee, which depends on the payment and delivery method. 

Because both fees and exchange rates are different for different scenarios, it’s best to check the most current rates on its website and app before transferring any money. 

With PayPal, you get pretty clear rates, and the amount of money you receive eventually, after deducting the fees, is significantly less. Here's how the fee structure looks:

• 4.4% transaction fee.
• A fixed fee that depends on the currency of the transaction. 
• 4% markup over the mid-market exchange rate. 

In terms of reach, both Western Union and PayPal support transfers to a wide range of countries. With Western Union, you can transfer to over 70 countries from India. The platform is also known for its wide range of agent locations that make transactions quite seamless.

PayPal also operates globally, and you can use a PayPal account to transact in 25 currencies across more than 200 countries.

How fast a payment platform processes your transactions, whether it is easy to use or not, and how simple it is to access the platform – these are some of the questions that deserve your attention when you go looking for a payment platform. Here, we discuss how Western Union and PayPal fare on these factors.

Let’s have a look at the category of users both Western Union and PayPal cater to.

Western Union

Western Union is more suitable for personal remittances, where people have to send money to their family and friends living abroad. It’s also preferred where the banking networks might not be well-established and the recipient may need cash pickup from the agent locations. Additionally, businesses use it for receiving cross-border payments through cash pickup, in bank accounts, or mobile and online banking.

PayPal

PayPal also works best for peer-to-peer transfers, but when both the sender and receiver have PayPal accounts. Besides that, it is also extensively used for receiving business payments by freelancers, SMBs, enterprises, and online sellers in marketplaces.

To understand how these platforms work, let's consider a scenario where you receive $ 2,500 from a U.S. client. Because for Western Union, the method of payment and delivery matters, let’s assume that the former is credit card and the latter is through bank account.

In this case, the fee structure will look like this, based on the current exchange rate of ₹88.7433:

From the table, it’s evident that Xflow is the most cost-effective solution when receiving cross-border payments.

Xflow is a modern fintech platform that helps exporters, funded startups, and freelancers receive their global transfers in the easiest and efficient way possible.  Key features that differentiate it from other platforms include:

• Settlement in just 1 business day. 
• No forex markup charged on mid-market exchange rate.
• A transparent, minimal fee with no hidden costs. 
• Free eFIRA issuance within 24 hours of transactions. 
• Intelligent FX management with FX AI Analyst.
• Anytime withdrawal benefits. 
• Limitless transactions in a single invoice. 
• Invoice and payment links generation.
• Real-time tracking of transactions. 

And so much more. To experience how Xflow simplifies your international payments, sign up today!

Let’s have a quick look at the pros and cons of Western Union and PayPal.

In the end, one thing is clear: both Western Union and PayPal come with their own mix of strengths and limitations. The key is to weigh how these balance out for your unique situation. Before choosing a platform, take a moment to match its capabilities with your business needs and see which one truly supports your growth.

If you need a platform that provides some of the best features out there and is cost-effective, Xflow is what you are looking for. 

With its transparent pricing, fast settlements, and simplified compliance process, Xflow ensures your cross-border payments are a breeze. Sign up with Xflow today!