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

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 a PayPal Cash, PayPal Cash Plus, or bank account linked to the PayPal 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, 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 or greater require 2-3 business 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 2.9% plus 30 cents if the purchase is made online. If the PayPal account is located outside the U.S., the fee is 4.4% plus a fixed fee based on the currency. For in-store sales, the standard transaction fee is 2.7% inside the U.S., and 4.2% outside the U.S.

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, debit card, or PayPal credit, 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 70 countries and 350,000 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 no fee if the funds originate from an online bank, and $2.99 if the funds originate from a debit or credit card. If the funds are being sent for cash pick-up, the MoneyGram fee charged for both options would be $3.99. As of January 2021, MoneyGram is quoting an exchange rate of 19.96 pesos to the dollar.

Xoom International Transfer Fees

Xoom, which also makes money on foreign currency transactions, offers a slightly better exchange rate of 19.21 pesos to the dollar as of January 2021. 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 Fees PayPal MoneyGram Xoom
Within the U.S.
(bank account → bank account)
No fee $1.99 1% 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) $5.00 No 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 $1.99 to transfer $200 from a sender's online bank account to a recipient's debit card.

Which Is Cheaper: Western Union or MoneyGram?

Within the United States, Western Union is slightly cheaper than MoneyGram to send $100 via an online bank account: $0.99 for Western Union compared to $1.99 for MoneyGram. However, the two platforms charge the same amount if sending via debit card, and Western Union charges more when sending through a credit card.

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.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. PayPal. "PayPal Consumer Fees."

  2. PayPal. "PayPal fees are always fair."

  3. MoneyGram. "Fast, Simple, Reliable: Send Money Direct to a Bank Account."

  4. Xoom. "Send money fast to the United States."

  5. PayPal. "PayPal Merchant Fees."

  6. MoneyGram. "About MoneyGram."

  7. MoneyGram. "2018 Annual Report," Pages 1-2.

  8. Xoom. "A fast, easy way to send money to Mexico."