Using traditional payment systems to send money abroad can become expensive quite rapidly. PayPal has always been a good example of this, since sending money from the UK to countries outside of the US, Canada, or Europe results in a standard $5 fee plus an additional credit-card and service charge.
PayPal Fees Remain High
It is evident that sending money abroad costs a lot more money than it really should. Given how money these days is stored and transferred digitally, there is hardly any reason to pay more than a few cents per transaction.
In the real world, things are very different where money transfers are concerned. Especially when using PayPal, transfer fees can get out of hand fairly quickly.
As is always the case, expenses related to sending money depends on where the sender and receiver are located. If the sender is situated in the UK, he/she will have to pay a high fee for sending money at all times. And when that transfer is made to countries outside of Europe, the US, or Canada, these fees can add up to at least $10 fairly quickly.
A Detailed Breakdown
The standard fee for transferring money to the aforementioned countries through PayPal is $5. That may seem cheap, but it is only the first fee users need to pay. If a payment card is used, there is an additional 3.4% surcharge based on the transaction amount. Add the fixed fee on top of that, as well as a potential currency conversion fee, and the recipient ends up getting only a fraction of the original amount. This is barring any withdrawal fees which may occur as well.
Bitcoin, on the other hand, is vastly superior in every single way. It can be sent to anyone around the world without any friction and without exorbitant fee rates. Although Bitcoin has seen its issues with high fees as well, current transactions are very cheap in comparison to PayPal or other solutions. It may take a few minutes longer, but that is a small price to pay for global money transfers without restrictions.
Unfortunately for Bitcoin, it simply doesn’t have the global pull that PayPal currently has. Luckily, things are improving in this regard, although there is still a long way to go. Bitcoin is already quite big in the Philippines when it comes to money transfers, but that is an exception rather than the norm at this stage.
Image courtesy of Shutterstock.com