PayPal Transfers From the UK to Australia: Beware the Fees

Australia is a popular destination for international payments originating from the UK, and PayPal, with its 300 million global customers, is one of the most widely-used P2P mobile transfer platforms worldwide.

However, while speedy and convenient, using PayPal to send money from the UK to Australia is a pricey choice due to the transaction fees and exchange rate margins involved. In this short guide, we look at how to send money from the UK to Australia with PayPal, what the costs are, and how to find cheaper alternatives instead.

How to PayPal From the UK to Australia

Sending money from the UK to Australia with PayPal may be expensive, but it's there's no doubt that it's convenient. To get the job done, all you'll need to do is log in to your PayPal account and make a transfer to any Australian PayPal user whose balance is in Aussie dollars. This can be done as follows:

1. Log in to your PayPal wallet;
2. Click the 'Send & Request' button;
3. Enter your recipient's email address, username, or mobile number;
4. Specify the 'Sending to a friend' option;
5. Enter the amount you'd like to send and choose AUD;
6. Click 'Send Money Now'.

Using this method, you'll be able to choose whether to pay by credit card, or using the balance in your PayPal wallet. The latter option will subject your transaction to PayPal's exchange rate fees, while the former option gives you a choice between paying at PayPal's or your card issuer's exchange rates.

Take a look at Monito's in-depth PayPal review to learn more.

PayPal's Fees and Exchange Rates

Weighing up total fees and exchange rates for international payments, it quickly becomes clear that PayPal is one of the most expensive ways to transfer into a different currency. Ultimately, this is because of the highly variable, nontransparent fees and exchange rates that you'll be charged along the way. We go through them both below:

PayPal Exchange Rates From the UK to Australia

In most cases, the bulk of the fees PayPal will charge you when sending money from the UK to Australia will come in the form of the exchange rate margin, the difference between the mid-market exchange rate (i.e. the one you see on Google) and the exchange rate that PayPal offers.

According to PayPal's fee schedule, this fee constitutes a margin that's 4% above the mid-market rate. However, according to our own analysis of the exchange rate that PayPal displays on its pricing calculator for GBP/AUD transfers compared to the mid-market exchange rate, PayPal's exchange rate margins fluctuate constantly and can be slightly lower or higher than this amount. In effect, this means that for every GBP 1,000 you transfer over to Australia, PayPal will convert only around GBP 960 of that amount into Australian dollars at the true exchange rate.

PayPal Transfer Fees From the UK to Australia

With PayPal, whenever you transfer money to the account of somebody else in a different currency, you'll pay a currency conversion fee in addition to the margin we touched on above. These fees break down as follows:

• Via PayPal balance/bank account: Exchange rate margin (around 4%) only.
• Via credit/debit card: AUD 0.30 fixed fee + 2.60% commission + exchange rate margin (around 4%).

To get a better picture of how the above transfer fees and exchange rate margins fit into the picture, take a look at the chart below:

Other Fees to Anticipate

If you make a PayPal transfer from British pounds to Australian dollars using a debit or credit card, you could be charged an exchange rate margin fee by your card issuer. However, PayPal gives users the choice of whether to pay their own exchange rate fees or those of the card issuer. Because currency conversion costs at major card providers can easily be as steep as at PayPal, we recommend choosing PayPal's exchange rates unless you know that your card provider offers you favourable exchange rates.

Find the Best PayPal Alternatives

Because PayPal is one the most expensive ways to send money to a different currency, we only recommend it for in-app transfers where using PayPal is the only option. Where it can be avoided, we recommend running a search on Monito's real-time comparison engine to find the best deal instead.

For example, by comparing your options and making a bank transfer from the UK to Australia with Revolut Money Transfer (the cheapest bank transfer service on around 50% of searches in July 2022), your recipient would receive around AUD 90 extra for every GBP 1,000 you send across the border.

For the sake of comparison, below you can see how much PayPal costs for a GBP 500 transfer to Australia compared to Revolut and HSBC:

In addition to Revolut, other services such as Wise and CurrencyFair offer great fees and exchange rates for transfers from the UK to Australia too. For larger transfers (i.e. those above GBP 25,000), then specialized foreign exchange brokers such as OFX and Currencies Direct become the better-priced services to suit your needs and will save you a considerable amount over PayPal in the long run.

Run a search on Monito's comparison engine to compare the market and find the best deal in real-time:—