PayPal Vs Wise – Full comparison [2023 Updated]
PayPal is a giant in the world of ecommerce and digital payments, with over 400 million active accounts globally. Wise hasn’t been around quite so long – but is already trusted by millions around the world for digital accounts and online payments. While both PayPal and Wise have some overlapping services, their focus is quite different – which means that the right fit for your needs may depend on the type of transaction you’re making.
If you’re not sure whether PayPal or Wise is best for you, this PayPal Vs TransferWise review is here to help. We’ll cover all you need to know about both PayPal and Wise international transfers, accounts, and cards, so you can decide which suits you best.
Summary: The services you can get from PayPal and Wise are quite different. However, when it comes to international transactions, PayPal’s transfer costs and currency conversion fees can be fairly high. In our comparison Wise has cheaper overall costs and a better exchange rate if you’re looking for a way to spend or send foreign currencies.
PayPal Vs Wise comparison: side by side
|Send payments to||Send to PayPal accounts in 200 countries, or use Xoom for bank deposits to 130 countries||160+ countries, 40+ currencies|
|Multi-currency accounts||Hold and convert 24 currencies in your PayPal account||Available for 40+ currencies|
|Debit card available||Y||Y|
|Pay later options direct with merchants||Y||N|
|Fully licensed and regulated||Y||Y|
|Open a business account||Y||Y|
So, to summarize:
- PayPal supports payments to more countries, but you can only pay to another PayPal account. To make payments to a bank account you’ll need PayPal’s Xoom service
- Both PayPal and Wise offer options to hold and convert currencies – Wise accounts can handle more currencies
- PayPal offers credit and pay later services to selected customers – Wise does not
- Both providers are fully regulated, and offer both personal and business services
PayPal started as a payment platform for online shopping, and has related services such as credit for eligible account holders. You can also make domestic and international payments between PayPal accounts, but to send money to a bank account you’ll need to use PayPal’s alternative service – Xoom.
Wise is a specialist in international payments to bank accounts, and offers safe, fast and low cost transfers which use the mid-market exchange rate. If you’re looking to send money to someone’s bank account internationally, Wise worked out cheaper overall compared to using a PayPal service, in our comparisons (more on that later).
The important bits: Differences between PayPal and Wise
|Rates||Exchange rate includes a markup of 4%||Mid-market exchange rate with no markup|
|Fees||At least 5% of transfer amount, depending on funding method (subject to some minimum and maximum caps)||Low fees, varies by destination|
|Speed||Can be instant||50% of payments are instant, 90% arrive in 24 hours|
|Service||Online, in app and by phone||Online, in app and by phone|
|Safety||Fully regulated and licensed||Fully regulated and licensed|
Rates: Wise uses the mid-market rate, whereas PayPal may charge currency conversion fees in the form of an exchange rate markup of 4%
Fees: Wise has variable fees which are based on the destination country, PayPal international payments from personal account have at least a 5% fee
Speed: PayPal payments arrive almost instantly if you’re sending to someone who already has a PayPal account. Wise payments can be instant
Service: Both providers offer multilingual service in a range of languages, online, in-app and by phone
Safety: Both providers are fully licensed and regulated
Pros and cons
|Pros||✅ Global coverage|
✅ Send to PayPal accounts instantly, or use sister service Xoom for alternative payout options
✅ Send payments with just an email address or phone number
✅ Hold and exchange 24 currencies in your PayPal account
✅ Business services available
|✅ Mid-market exchange rates + low fees|
✅ Transparent pricing
✅ Send to 160+ countries
✅ International accounts for personal and business customers
✅ Hold and manage 40+ currencies
|Cons||❌ Complex fees which are often high|
❌ Exchange rate markups
❌ Send from one PayPal account to another only – or use Xoom
|❌ Online and mobile payments only – no branches|
❌ No option for cash payments
❌ Transfer fees vary by destination country
PayPal Vs Wise: The verdict
Whether PayPal or Wise is best for you will depend on the specific services you need.
PayPal is a really popular and convenient way to shop online and send money quickly to friends. Making a domestic payment is often free – but when it comes to international payments, there are transfer fees and a currency conversion fee to consider. Transfers with PayPal are deposited into your recipient’s PayPal account – if they want to withdraw their payment they may need to wait several days for it to arrive in their bank account, or pay a fee for a faster withdrawal.
Wise is a specialist in transfers direct to bank accounts, and offers the mid-market exchange rate with low, transparent fees. Wise also offers a multi-currency account with a linked international debit card.
If both providers support payments to the country you’re sending to, and you want your transfer to be delivered to a bank account, our comparisons showed Wise to be cheaper than PayPal.
About PayPal and Wise
PayPal was founded in 1998, and has 400+ million customers. You can send payments all over the world from one PayPal account to another. More recently PayPal has launched an alternative service – Xoom – which allows users to send to bank accounts and for cash collection.
Read our Wise vs Xoom article to learn how Xoom compares to Wise.
PayPal business accounts are ideal for merchants selling online – there are an increasing number of ways to accept PayPal payments offline too.
Wise was launched as TransferWise back in 2011 as a low-cost international payment provider. These days, Wise has upwards of 16 million customers, and also offers personal and business accounts to hold and manage currencies, accept payments and spend using a linked debit card.
With Wise you can send payments to 160+ countries, in 40+ currencies. Read our complete Wise review to learn more.
How do they work?
If you already have a PayPal account, it’s easy to send money. Setting up a PayPal account only requires a few personal details and can be done entirely online or in the PayPal app.
- Log into your account and select Send & Request
- Enter the email address, mobile number or name of the recipient and click Next
- Enter the amount, choose the currency and add a note
- Select either Paying for an item or service, or Sending to a friend, depending on the situation
- Click Continue
- Select the payment method you want to use
- Review and hit Send Payment Now to complete your transaction
Read our How PayPal works article to learn more.
To use Wise you’ll need to create an account, and depending on the type of payment you want to make you might need to provide some ID for verification.
Once your account is up and running make payments online and in the Wise app. Here is how to transfer money with Wise:
- Log into your account
- Type in how much you want to transfer, or how much you need the recipient to get
- Enter the recipient’s details – bank account number or email
- Check over the details
- Fund your payment using a card or bank transfer
- Confirm and your money will be on the move
Wise transfers are made through Wise’s network of local bank accounts, so they arrive quickly and don’t incur intermediary fees. When you want to pay for your transfer in dollars you’ll send the money to Wise’s local US account. Then Wise will make a payment of the equivalent amount in your preferred currency, from their account in the destination country. No money actually moves across borders, so it can be faster and cheaper than international wire payments.
Read our How to use Wise article to learn more.
PayPal Vs Wise Fees
PayPal fees include costs for domestic payments funded by card, and international transfer. There are also currency conversion fees when sending payments in a foreign currency, plus if you send to a PayPal account, your recipient may need to pay a fee to withdraw money to their bank. That can make it difficult to figure out exactly what the costs of your transaction are.
Wise fees are transparent and laid out before you confirm a payment. You’ll see how much the recipient gets, and the funds are deposited right to their bank account for convenience.
|Fee type||PayPal fee||Wise fee|
|Open account||No fee||No fee for personal accounts|
|Apply for a card||No fee for debit card|
|Monthly fees||No fee||No fee|
|Send domestic payment||Pay by PayPal Balance, bank account or Amex Send account: No fee|
Pay with a card: 2.9% + fixed fee
|Low fees, based on payment method|
|Send international payment||Domestic fee applies based on payment method + 5%, minimum 0.99 USD, to 4.99 USD||Low fees, based on destination and payment method (from 0.43%)|
|Currency conversion||4%||From 0.43%|
|Withdraw to bank account||Standard withdrawals are usually free, instant withdrawals can mean a fee – the cost paid depending on where the recipient is based||Not applicable – payments deposited to bank accounts directly|
PayPal Vs Wise transfer fees: which is cheaper?
Choosing an international payment specialist is almost certainly cheaper than sending money using your bank. However, as fees and rates do vary, it still pays to compare a few providers before you pick.
Let’s look at how a few different payments from PayPal and Wise work out. This table looks at how much a friend would get if you send money in USD to their account in GBP or EUR:
|Amount & Currency||Recipient gets with PayPal||Recipient gets with Wise||Which is cheaper?|
|Sending 1,000 USD to GBP||749.04 GBP||781.98 GBP||Wise|
|Sending 5,000 USD to GBP||3,760.24 pGBP||3,911.98 GBP||Wise|
|Sending 1,000 USD to EUR||871.01 EUR||910.45 EUR||Wise|
|Sending 5,000 USD to GBP||4,372.76 EUR||4,554.88 EUR||Wise|
*Fees and exchange rates correct at time of research – 16th August 2022
As you can see, on all our comparisons, Wise worked out cheaper – this is because of the currency conversion fees added to the PayPal exchange rate.
PayPal Vs Wise: exchange rates
Wise uses the mid-market exchange rate to convert your USD to the currency you need to deposit in your recipient’s bank account. The mid-market rate is the one you’ll see on Google or with a currency converter tool.
PayPal adds a currency conversion fee when your dollars are switched over to the currency needed for deposit to your recipient’s PayPal account. For payments overseas, this fee is 4%.
PayPal Vs Wise: which is faster?
When you send a PayPal international payment it is delivered to the recipient’s PayPal account almost instantly. They can then use the funds to shop online, or make payments to others. If they want to move the money to a bank account this may take time or incur fees, depending on where in the world they’re based.
50%+ of Wise payments get to their destination instantly, and 90% arrive in 24 hours. However, the exact delivery time will depend on where you’re sending money to, and how you want to pay. You’ll see an estimated arrival time when you set up your payment.
PayPal Vs Wise: international transfer limits
PayPal’s transfer limits depend on the status of your account, while Wise account holders can send payments to limits set according to the currencies involved. Here’s a summary:
|PayPal limits||Wise limits|
|Unverified account holders can make a one time payment of up to 4,000 USD|
Once your account is verified, you can send individual payments of up to 10,000 USD (or 60,000 USD in some cases), with no limit to the total amount you can send over multiple transactions
|For most currencies, Wise payments are either unlimited, or the limit is set high, in the region of 1 million GBP or the currency equivalent|
In some cases, additional limits may apply based on the payment method, or the specific currency in question
PayPal Vs Wise: Payment methods
To fund a payment, you can usually use either a bank transfer or card with both Wise and PayPal. Fees and speed may vary according to the payment method you select.
If you are interested in sending money from PayPal to Wise, check out our guide: How to send money from PayPal to Wise
PayPal Vs Wise: card
PayPal has both credit and debit cards on offer for US customers. The features and fees for these different cards vary. Wise offers a multi-currency holding account with a linked debit card you can use for convenient payments and withdrawals.
|Provider card||Card features|
PayPal Vs Wise: card: Where can you use them?
PayPal’s debit card is issued on the Mastercard network and can be used locally and internationally, more or less anywhere in the world – just look out for the Mastercard symbol.
Wise issues cards on both Visa and Mastercard networks, for great global acceptance. In total, the Wise card can be used in 150+ countries globally.
PayPal Vs Wise: business
Both PayPal and Wise offer business accounts and services, although the focus of each is a little different.
PayPal is perfect for ecommerce sellers in particular, as there are easy integrations with many popular ecommerce sites, to accept PayPal payments and increase customer conversion.
Wise Business on the other hand has a focus on international services for businesses, with a broader range of currencies supported, and mid-market rate currency conversions when sending payments or spending overseas.
|PayPal Business||Wise Business|
PayPal vs Wise for receiving money
You can receive payments with both PayPal and Wise.
With Wise, you can receive money in your Wise account or get the transfer directly deposited in your bank account. Wise lets you send payments to bank accounts in 160+ countries, and you can use your Wise account to receive payments in up to 10 different currencies, including USD, EUR, CAD and GBP.
PayPal payments are deposited to your PayPal account. You can then either spend the money online, send it to others, or withdraw to your bank account.
|Receive money with PayPal||Receive money with Wise|
Ease of use
- Creating an account: Create your account online or in app with both PayPal and Wise
- Making a transfer: Make a PayPal international payment using a credit or debit card, bank transfer or your PayPal balance. Wise typically allows bank transfers, card payments and Apple Pay payments
- Ways to send money: Send payments to your recipient’s bank account directly with Wise. PayPal transfers are deposited in the recipient’s PayPal account
- Languages: Both PayPal and Wise offer multi-lingual support services
- Transfer limits: Sending limits can vary by destination country, and based on your account type
Both PayPal and Wise are fully licensed and regulated, and use both smart technology and dedicated service teams to keep customer money safe.
PayPal is globally regulated and one of the largest payment companies in the world.
Wise is regulated by FinCEN in the US, and other global regulatory bodies around the world. Learn more about it here: Is Wise safe to use?
PayPal Vs Wise: customer service
Both PayPal and Wise offer comprehensive self-help options online including detailed FAQs. The best way to get in touch if you need help will depend on the type of question you have. You can log into your account with either service, and open an in-app chat which will get you a quick and personalized response. Or, PayPal has advice on its desktop page, which details the best way to get in touch based on query type.
Conclusion: Comparing PayPal and Wise
When it comes to account and card services, and making international payments, the services offered by PayPal and Wise are pretty different.
Wise is a specialist in international transfers that are delivered directly to the recipient’s bank account. PayPal transfers are deposited in the recipient’s PayPal account – if they want to withdraw the money to their bank they may need to wait a few days or pay a fee.
The other major differentiator is on cost and transparency. Wise international transfers use the mid-market exchange rate with no markup, and a low fee. PayPal payments may have higher fees, and a currency conversion cost – a markup – is added into the available exchange rate. This means that sending money internationally with PayPal will probably work out to be more costly than using Wise.
PayPal vs TransferWise FAQs
What is the difference between PayPal and Wise?
PayPal and Wise are quite different companies, although they have some overlapping services. PayPal offers excellent ways to shop online and send money to other PayPal users, while Wise has more of a focus on international transfers and multi-currency account products.
Which is better: PayPal or Wise?
There’s no straight answer when it comes to which is better between PayPal and Wise. Both offer different features and fee types – so the right one for you will depend a lot on the type of transactions you need to make.
Is PayPal or Wise cheaper?
For international payments to a bank account, Wise was cheaper in our comparisons. This is because it offers the mid-market exchange rate with no markup, and low transfer fees.
Is PayPal or Wise faster?
PayPal transfers can arrive almost instantly in the recipient’s PayPal account – but withdrawing the money to a bank account may take a little longer. Wise payments can be instant, and 90% will be in the recipient’s bank account in 24 hours.
How many currencies do PayPal and Wise support?
PayPal allows customers to hold a balance in 24 currencies and Wise supports 40+ currencies.