A Comparison of the Major eWallets for International Transfers
eWallets, otherwise known as digital wallets, are truly the forefront of the banking industry. They make it easy to transfer money, make online purchases, and even split bills. But what parameters does a service need for it to be defined as an eWallet, and what are the main differences between them when it comes to moving money to a different currency.
For your convenience, the following is an overview of what you need to know about eWallets, focusing on foreign currency transfers.
What is an eWallet?
To put it simply, an eWallet is a desktop or mobile app that allows you to manage money and make electronic commerce transactions. For a money transfer app to be considered an eWallet, we require it to have the following functions:
- peer-to-peer transfers: enables people to transfer money to each other
- withhold money in the account: just as you would a regular wallet
- withdraw it to your credit card or a bank account
Examples of known eWallets:
- Apple Pay
- Google Wallet
- Samsung Pay
- Walmart Pay
- iDebit (local Canadian)
- iDeal (local Dutch)
What all these companies/apps have in common is that they specialise at transferring money between persons (p2p), or as a means of payment for a business by an individual (c2b), or as a means of payment to a business by a business (b2b). It is usually extremely easy to deposit and withdraw cash from the electronic wallet – some of them are connected directly to a credit card, and some are connected directly to a bank account.
What these companies don’t specialise at is international money transfers. Some of them (Paypal and Skrill in particular) do enable it and make a nice chunk of their revenues from clients who use them for this purpose, but the fees are exorbitant.
The same applies for Paypal and Skrill which are very popular methods of moving funds for remittances purposes, and charge similarly high fees.
How Expensive are Traditional eWallets for International Payments?
We have compared Paypal and Skrill’s fees and in comparison we tossed in a specialised foreign currency provider (which we will deal with later).
|Company||Personal Transfer Fees||Currency Exchange Fees||Withdrawal / Receiving Fees||Total|
|PayPal||1%||3.5%||£0.20||4.5% and £0.20|
|Skrill||0% – 1.9% (5.5% – paysafe card)||2.99%-4.99%||£2.07||2.99% (or more) and £2.07|
|Currencyfair||€3 (if from UK)||0.35%-0.5%||–||0.35% + €3|
As you can see in the table above, Skrill has the most hefty fees, which are far more expensive than PayPal and Currencyfair. PayPal itself is significantly more expensive than Currencyfair, with 4.5% fees as opposed to 0.35%.
Each of the services has its own sending limits:
- PayPal: requires a minimum transfer of just US$0.02, or £0.01 The maximum you may send through PayPal is US$10,000 in one transfer. Since Paypal is funded by your debit or credit card, standard credit limits will apply.
- Skrill: Visa funded transfers are limited to €5000 per single transaction.You can use your Skrill Card to pay for goods and services up to the value of €1,000.
The cost of using Paypal or Skrill for currency exchange purposes outweigh the many positive these companies have in comparison to other means of payment (like the easy on-boarding, professional software, ease of use, accessibility).
International Money Transfer Services
These are companies which aren’t traditionally considered as eWallets, but in fact they do enable clients to use the same function as an eWallet. The only differences is that none of these companies enables P2P transfers to another client on the platform but rather force you to send funds to a bank account (either yours or someone else’s). The exception to that is Payoneer which is truly revolutionary, but the reviews about it are too bad to even consider as option (view our Payoneer review).
Note: Most traditional transfer services do not enable users to keep sums of money in the account, but some of the larger money transfer companies have an E-MONEY license by the FCA which means they can withhold client funds for limited periods. These are the companies we will be focusing on. f you want to send money abroad or receive funds from abroad using a commercial foreign exchange company and you don’t need them to withold your funds for any period, click on the links to find our relevant guides.
|Company||Min Transfer||Transfer Fees||Exchange Rate Markups||Withdrawal / Receiving Fees||Extra Info||Total|
|World First||€1,000||None ($10 if from USA)||Usually less than 1%||None||Businesses get collection accounts abroad||Spotless reputation, collection accounts, low fees|
|Currencies Direct||€100||None||Usually less than 1%||None||Online sellers get collection accounts abroad||Spotless reputation, collection accounts, low fees|
|Moneycorp||€100||None||Usually less than 1%||None||No collection accounts, but you can receive checks from abroad||Banking License in Gibraltar, Operating since 79|
As you can see from the table above, the top rated money transfer companies can help an individual or a business make payments through an online system (similarly to eWallets) for a fraction of the cost. Funding the transaction is usually done via a bank transfer, but for smaller payments you can use a credit card, similarly to eWallets.
Receiving money from abroad through these companies is definitely do-able. With some companies like World First, businesses can have their own collection accounts abroad, and with other companies you will request an electronic check to be cleared by the firm. In either way, each one of the 3 companies above will supply you with a dedicated currency dealer to assist you with all your inquiries.
Why are PayPal and Skrill popular despite their high fees?
There are multiple reasons for the popularity of PayPal and Skrill:
- Diverse Functionality: People use these eWallet apps to receive and send local-currency payments all the time. When they need to exchange currency they just go back to the same platform they know. Similarly to people who still use banks for international transfers in spite of high cost and worsening reputation.
- Reputation: It is unwise to underestimate a good reputation. PayPal and Skrill are household names, because they have been at the top of the industry for a long time. People trust them more than a name they know little about, and many are prepared to lose on some of their money for that reason.
- Reach: PayPal and Skrill allow you to send money across the globe, from just about anywhere in the world. Other services do not accept clients from certain countries. Currencyfair does not accept clients from the USA. It must be stated, though, that both PayPal and Skrill have limited availability when it comes to currencies (less than 30 currencies).
- Quick: PayPal and Skrill are easy to use – transferring funds is quick and simple. For certain customers, the convenience and ease make up for the fees.
- Great Apps: Many transfer companies do not have their own mobile apps, and when they do they are often inferior. Currencyfair, however, has a great app. That being said, people are still more familiar with PayPal and Skrill apps that have been around for longer.
- Unaware of alternatives: Many customers are unaware that there are cheaper alternatives, and stay with what they know. It’s easy to think that other services are simply doing the same thing.
PayPal is one of the best-known and most popular money transfer services. Over the past decade and a half, it has made itself into one of the giants of the online money transfer industry.
- Founding: PayPal was founded back in 1998, getting its IPO in 2002.
- Backing: PayPal became a wholly owned subsidiary of eBay later that year, and remained so until it became an independent company in July 2015.
- Amount PayPal moves annually: In 2014, PayPal moved US$228 billion. This was across more than 190 countries, in 26 different currencies.
- Xoom takeover: PayPal is currently acquiring Xoom Corporation, which is another leading remittance provider. This will increase PayPal’s reach and boost revenue significantly.
- Client perceptions: PayPal has a wide reputation, which necessarily comes with a lot of criticism. In the early 2000s, PayPal had a widespread problem of being used for fraud, which they largely managed to limit. However, the perception caused by the controversy remains fresh in the mind of many.
- Client feedback is also often quite negative. On TrustPilot they have a score of 2 out of 10, with 1920 reviews. A lot of the complaints focus on bad customer service when things go wrong. There are also complaints about money being taken off with no indication of why.
- Disadvantages: The main disadvantage of using PayPal is the high fees, and the fact it is lacking client support highly negative. It is mostly convenient to use, but when things go wrong, customers face a lot of frustration and difficulty getting money returned.
Another giant of the money transfer corporations, Skrill is up there with PayPal in terms of renown and usage.
- Founding: Skrill is another company that has been around for a while. Skrill was founded in 2001 as Moneybookers, but was taken over and rebranded by Skrill Limited.
- Backing: Skrill’s parent company is Paysafe Group.
- Optimal Payments acquired Skrill in the 3rd quarter of 2015, which is the latest in a long line of acquisitions over its 14 year history.
- Ukash takeover: Skrill have acquired Ukash, their biggest competitor in the UK. This is expected to increase the scale and reach of Skrill’s paysafecard, which will help them maintain their status as one of the leaders in the market.
- Client perceptions: Just like PayPal, Skrill’s global reach has built up a large base of unhappy clients. On TrustPilot they have a rating of just 5 out of 10. The major complaints involve possible scams, accusations of fraud, and non-existent customer service.
- Disadvantages: The major disadvantage with Skrill is the very high payment fees even compared to alternatives. Its fees are higher than PayPal’s. Skrill also has customer service problems, and a lack of client support.
Who should use PayPal or Skrill?
PayPal and Skrill have their disadvantages, but they also have aspects that subsequently make them a necessary player for many people around the world. They are useful to people who need to transfer money very quickly or need to send domestic transfers. They are also necessary for people living in or sending to countries with limited reach. It has also become popular to use these services to evade the tax authorities.
PayPal vs. Skrill
There is no simple answer as to which one of these companies is better. PayPal’s fees are significantly lower than Skrill’s. But Skrill has much higher ratings online than PayPal, although these ratings are not at all high.
Currencyfair has the advantage
Currencyfair is far cheaper than either PayPal or Skrill for transfers involving currency exchanges. They also have far better customer service, based on client reviews, and far more comprehensive client support system, which makes clients feel safer. If anything goes wrong, they will work with you to resolve the issue.
PayPal and Skrill have their advantages, but Currencyfair is the eWallet provider with the lowest fees by far. Currencyfair major disadvantage is their limited reach, but they are the best choice in locations where they are accessible.
New Contender: Circle Pay App
You have surely heard of Circle Pay app. If you haven’t – please read our Circle Pay app review here. It might be the best eWallet in the coming years.