PayPal Transfers From the US to Canada: Beware the Hidden Fees

Canada is one of the most popular destinations for international money transfers originating from the US, and PayPal, with its 160 million American customers, is one of the most preferred ways to make transfer across the northern border.

However, while fast and convenient, using PayPal to send money from the US to Canada is an expensive choice due to the hefty exchange rate margins that go along with the app. In this guide, we look at how to send money from the US to Canada with PayPal, what the costs are, and how to find better alternatives instead.

How to PayPal From the US to Canada

Sending money from the US to Canada with PayPal may be expensive, but it's undoubtedly very convenient. To get the job done, you simply have to log in to your PayPal account and make a transfer to any Canadian PayPal user whose balance is in Canadian 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 CAD;
6. Click 'Send Money Now'.

Using this method, you will also be able to choose whether to pay by credit card or using your PayPal balance. The latter option will subject your transaction to PayPal's exchange rate fees, while the former option gives you the 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 US to Canada Fees and Exchange Rates

All things considered, sending money from one PayPal account to another is one of the most expensive ways to transfer into a different currency. This is because of the highly variable, nontransparent fees and exchange rates that you'll be charged.

PayPal Exchange Rates: US to Canada

In most cases, all fees PayPal will charge you when sending money from the US to Canada 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 3% above the mid-market rate. However, according to our analysis of the exchange rate that PayPal displays on its pricing calculator for USD/CAD transfers compared to the mid-market exchange rate, PayPal's exchange rate margins are still higher, in the region of 3.35% of the transfer value. In effect, this means that for every USD 1,000 you transfer to Canada, PayPal will convert only around USD 966.50 of that amount into Canadian dollars at the actual exchange rate.

PayPal Foreign Transaction Fees: US to Canada

If you're sending money to the PayPal account of somebody else in a different currency, you won't pay any fixed transaction fees over and above the exchange rate margin we explored above.

However, if you're sending money from the US to a business or non-profit in Canada, or if you receive payment using the 'Request Payment' tab, then you'll be subject to a CAD 0.30 fixed fee in addition to the exchange rate margin. (The exchange rate margin for these payments is 4.4% for transfers from the US to Canada.)

Other Fees to Anticipate

If you make a PayPal transfer from US to Canadian dollars using a debit or credit card, you could be charged an exchange rate margin fee by your card issuer. However, PayPal allows users to choose whether to pay their exchange rate fees or the card issuer's. 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

To avoid the high fees that come along with PayPal, comparing the market for the most competitive money transfer apps is the best choice at your disposal. The cheapest provider is . Most people transfer around 1000, but it's a cheap provider at any amount.

For example, by comparing your options and making a bank transfer from the US to Canada with Wise, your savings compared to PayPal would be in the region of CAD 40 per USD 1,000 that you send across. There are other great options too. The following were the cheapest money transfer apps on Monito from the USA to Canada in 2022:

1. CurrencyFair (cheapest on 40% of searches)
2. Wise (cheapest on 22%)
3. OFX (cheapest on 3% - especially for big transfers over USD 50,000)

Find the best deal from the US to Canada in real time now 👇