For a modelled $1,000 US-dollar-to-euro conversion, Interactive Brokers estimates about $2.00, while PayPal estimates roughly $35.00. IBKR's commission row is lower at 0.20% when the exchange supports investing, trading or hedging inside the brokerage. PayPal can pay an eligible PayPal recipient.
The catch is product fit. IBKR needs a funded eligible brokerage account, an executable FX order, and a later eligible withdrawal. PayPal's availability, payment timing, fees, and exchange rate vary by market and transaction type. The figures below apply stored published-fee models to the current mid-market benchmark.
- IBKR's commission model ranks lower. Tier I pricing is 0.002%, subject to a USD 2 equivalent minimum per order.
- PayPal's cost hides in the rate. There is no separate fee line to read, because the charge is baked into a worse exchange rate.
- Interactive Brokers needs setup. Convert Currency submits a market order, and spread, slippage, withdrawal, intermediary-bank, and tax costs sit outside the widget.
- PayPal supplies a different payment flow. It can pay an eligible PayPal account; IBKR is not a substitute for that recipient experience.
How Interactive Brokers charges
Interactive Brokers is a broker, not a money-transfer app. It charges a Tier I spot-FX commission of 0.20 basis points, or 0.002% of trade value, with a USD 2 equivalent minimum per order. That percentage exceeds the minimum at about USD 100,000, so the charge is not permanently flat. Convert Currency submits a market order, and the executable bid/ask spread and slippage can move the result away from the mid-market benchmark.
On a $1,000 conversion, the widget estimates about $2.00, or 0.20% of the amount. A USD 1,000 order is below IBKR's published USD 25,000 standard-order minimum, so it is an odd lot whose price is not displayed in the interbank market.
At USD 25,000, the order reaches the standard-size band and the commission model remains near the USD 2 equivalent minimum. That does not include the buying-versus-selling price difference or the cost and eligibility of withdrawing the converted funds.
The workflow requires a funded eligible account, supported currencies, and an eligible withdrawal route. Spot-trade settlement does not promise that a later withdrawal reaches a bank on the same timetable. Third-party payees require approval and due diligence. The Interactive Brokers provider page explains the product fit.
How PayPal charges
PayPal works the other way around. On most international transfers it shows you no separate fee line at all. Instead it quotes an exchange rate that sits roughly 3.5% above the base rate and keeps the gap. The cost is real, but it is buried in the rate rather than printed as a charge.
The exact markup varies by route and by how you fund the payment, and PayPal's Xoom transfer service prices things its own way. The pattern still holds: almost everything you pay is in the exchange rate, not in a fee you can point to.
On a $1,000 conversion, the modelled markup is worth about $35.00, or 3.50% of the amount. That row represents the stored conversion assumptions, not every PayPal transaction or a Xoom quote.
An eligible recipient with a PayPal account may receive a PayPal payment without sharing bank details, subject to availability, reviews, holds, and the selected funding method. That is a different service from converting assets inside a brokerage account. The PayPal provider page shows how the modelled pricing comes together.
Head to head, by amount
The fee model shows a wide gap, but the two rows answer different questions. Here is the modelled currency cost at two amounts; check whether either workflow actually completes your payment before comparing rank.
$1,000: the gap is already clear
At $1,000, the IBKR commission model is about 0.20%, while the PayPal conversion model is near 3.50%. The IBKR order is an odd lot and its execution price is not displayed in the interbank market. PayPal is the relevant row if the required outcome is an eligible PayPal payment, not a brokerage withdrawal.
$25,000: the gap turns into real money
At USD 25,000, IBKR enters its published standard-size band, while the stored PayPal markup scales with the amount. The model therefore shows a much larger dollar gap. IBKR is relevant when the currency trade supports investing, trading or hedging in the brokerage; use PayPal or a transfer provider for a payment to somebody else.
Who should pick what
Check Interactive Brokers first when the currency trade funds an investment, executes a trading view or hedges exposure inside the brokerage. Its commission can be dramatically lower than PayPal's markup; the modelled 0.20% does not include the buying-versus-selling price difference.
Check PayPal if the person you are paying can receive through PayPal and that recipient flow matters more than the lowest modelled conversion cost. Confirm the fee, exchange rate, holds, and withdrawal implications on the final screen.
Pick neither without checking if the transfer is large or unusual. Run the amount through our comparison tool first, because a third provider may beat both on your specific route. Our Wise vs Revolut guide covers two more options in the same detail, and a quick check costs nothing.
Frequently asked questions
Is Interactive Brokers cheaper than PayPal?
IBKR's commission model is lower at the two displayed amounts. Tier I pricing is 0.20 basis points with a USD 2 equivalent minimum, while this PayPal model uses a roughly 3.5% conversion markup. They are unlike products, so include IBKR execution and withdrawal costs and PayPal's final transaction terms before deciding.
Why is PayPal so much more expensive?
Most of PayPal's cost is hidden in the exchange rate rather than shown as a fee. It quotes a rate a few percent worse than the real mid-market rate and keeps the difference. That is convenient and familiar, and many people happily pay it for the ease of sending to an existing PayPal balance. On a pure price basis, though, it costs many times what a broker charges.
What is the catch with Interactive Brokers?
You need a funded eligible brokerage account, and the exchange should support genuine investing, trading or hedging there. Convert Currency submits a market order, small orders may be odd lots, and withdrawals have separate eligibility and processing. IBKR is therefore not an urgent PayPal-recipient checkout.
Can I use the IBKR estimate on a weekend?
Do not treat it as a weekend execution quote. The comparison intentionally ignores weekend-specific adjustments, and an IBKR market order depends on an open market. If timing is flexible, compare executable prices and convert on a weekday.
Cost figures are worked out from each provider's published fee structure applied to the current mid-market reference rate, with modelled estimates for typical major-currency routes. IBKR execution, withdrawal, intermediary-bank, and tax costs are outside the widget; PayPal pricing varies by market and transaction type. Always confirm the final quote on the provider's own site before you transfer. We may earn a commission from affiliate links at no extra cost to you; this never affects rankings. Nothing here is financial advice.
Sources: Interactive Brokers spot-FX commissions (opens in a new tab), Interactive Brokers FX order sizes (opens in a new tab), Interactive Brokers Convert Currency guide (opens in a new tab), IBUK and IBLLC Client Agreement (opens in a new tab), Interactive Brokers withdrawal fees (opens in a new tab), Interactive Brokers third-party withdrawals (opens in a new tab), PayPal fees (opens in a new tab), PayPal exchange-rate help (opens in a new tab). Accessed 22 August 2026.