Last Updated on December, 2024
Sending money abroad can be confusing. You have options like PayPal and Wise, but which one is better? Let’s break it down.
PayPal and Wise (multi-currency account) both help you send money abroad, but they work differently.
In this comparison, I’ll help you examine each option’s offerings, such as fees, speed, and where you can send money. By the end, you’ll know which option might be best for you.
Understanding these platforms can save you time and money, whether you’re sending money to family, paying bills abroad, or running an international business.
So, be ready to understand which one suits your needs better fully.
Quick Summary
PayPal serves over 200 countries but adds currency conversion fees. Wise covers 160+ countries with transparent, low-fee transfers using mid-market exchange rates, typically making it cheaper than PayPal for international bank transfers.
PayPal excels in online shopping and domestic transfers, offering PayPal-to-PayPal account transfers and credit options. Wise specializes in cost-effective international bank transfers and multi-currency accounts, with features like local account details and debit cards.
PayPal provides instant transfers to PayPal accounts but may delay bank withdrawals. Wise often ensures swift, often instant, bank transfers with upfront, transparent fee displays, making it preferable for direct bank transactions.
Contents
- Wise Vs PayPal: Side By Side Comparison
- Wise Vs PayPal
- Wise Vs PayPal: Making International Transfers
- How Do They Work?
- Wise Vs PayPal: Exchange Rates
- Wise Vs PayPal: Fees
- Which Service, Paypal or Wise, Offers Quicker International Transfers?
- Comparison of International Transfer Limits Between Paypal and Wise
- Wise Vs PayPal: Payment Methods
- Wise Vs PayPal: Card Comparison
- Wise Vs PayPal: Business
- Wise Vs PayPal: Receiving Money
- Wise Vs PayPal: Customer Support
- Ease of Use
- PayPal Vs Wise: Supported Currencies
- PayPal Vs Wise: Safety
- PayPal Vs Wise: Pros and Cons
- Conclusion
- FAQs
Wise Vs PayPal: Side By Side Comparison
| Feature | PayPal | Wise |
| Sending payments to | 200 countries via PayPal, Xoom for 130 countries | Transfers to 160+ countries, 50+ currencies |
| Multi-currency accounts | Hold and convert 25 currencies | Hold and exchange 40+ currencies, 10 local account details |
| Credit availability | Available | Not available |
| Debit card availability | Available | Available |
| Pay later options | Available | Not available |
| Business account opening | Available | Available |
| Regulation | Fully licensed and regulated | Fully licensed and regulated |
PayPal and Wise both help with international money transfers, but they have different features. PayPal can send money to more countries, but only to other PayPal accounts. If you want to send money to a bank account, you’ll need to use PayPal’s Xoom service.
Both PayPal and Wise let you hold and convert currencies, but Wise can handle more types of currency. PayPal offers credit and pay-later services to some customers, which Wise doesn’t.
Both companies are regulated and offer services for personal and business customers.
PayPal started as an online payment platform for purchasing goods. You can also send money domestically and internationally between PayPal accounts. However, to transfer money to a bank account, you have to use Xoom.
Wise specializes in international bank transfers. They offer secure, quick, and low-cost transfers using the mid-market exchange rate.
Note: In my comparisons, Wise was generally cheaper than using PayPal for international bank transfers.
Wise Vs PayPal
About Wise
Wise is an easy way to transfer money internationally. It helps you transfer money between different countries with low fees and the real exchange rate.
You can do it all online or through their app. With Wise, you know exactly how much money will arrive at the other end because they show you all the costs upfront. Plus, it’s fast – many transfers happen within a few hours.
Wise is transparent, secure, and trusted by millions worldwide for transferring money across borders without stress. Whether you’re paying bills abroad or transferring money to family, Wise makes international transfers easy and affordable.
Want to dive deeper into Wise? Our detailed review is available here.
About PayPal
PayPal serves as your digital wallet, simplifying online transactions. It protects your financial information, sparing you from repeatedly entering credit card details.
By linking to your bank account or card, PayPal facilitates seamless purchases with just a login. It ensures safety by keeping your sensitive data hidden from sellers.
Plus, PayPal provides buyer protection, assisting in refunds if issues arise with purchases. Beyond transactions, you can utilize PayPal to transfer funds securely to friends or family.
With its convenience and safety features, PayPal stands as a trusted tool for online shopping and money transfers, simplifying financial transactions in the digital age.
Wise Vs PayPal: Making International Transfers
When you’re transferring money abroad, choosing between PayPal and Wise depends on what you need.
Wise specializes in transferring money internationally directly to bank accounts. They offer fair exchange rates and transparent fees, which can be lower than PayPal’s. Plus, Wise also provides multi-currency accounts with a debit card attached.
PayPal is great for online shopping and quick money transfers to friends. Transferring money within your country is often FREE, but for international transfers, there are fees to consider, including currency conversion fees.
The money you send goes into the recipient’s PayPal account, but if they want to move it to their bank, they might wait a few days or pay for faster access.
If both PayPal and Wise support transfers to your recipient’s country and you prefer money to go straight to their bank, our comparison suggests Wise might be the cheaper option.
How Do They Work?
Wise offers a streamlined method for international money transfers. With Wise, users can enjoy quick and cost-effective transactions through its network of local bank accounts.
By using local accounts, Wise minimizes intermediary fees and ensures speedy transfers without the stress of traditional wire payments.
Transferring money internationally with Wise is super easy! Users create a Wise account and verify their ID if needed. Once logged in, they input the transfer amount and recipient’s details, such as their bank account number or email address.
After confirming the information and funding the payment using a card or bank transfer, the money is swiftly sent through Wise’s localized network.
PayPal provides an easy and versatile platform for international money transfers. Users can log into their PayPal account, select the ‘Send & Request’ option, and enter the recipient’s email, mobile number, or name.
They then input the amount, choose the currency, and add a note before selecting the purpose of the payment. After choosing a payment method and reviewing the transaction details, users can complete the transfer with a click of a button.
Wise distinguishes itself by utilizing a network of local bank accounts, resulting in faster and potentially cheaper transfers compared to PayPal’s more traditional approach.
While Wise offers speed and cost-effectiveness, PayPal stands out for its ease of use and versatility in various payment scenarios. Depending on the user’s priorities, both platforms provide reliable options for international money transfers.
Wise Vs PayPal: Exchange Rates
When you use Wise to transfer money, they convert your dollars to the currency your recipient needs using the mid-market exchange rate, which you can easily find on Google or with a currency converter tool.
However, PayPal charges a currency conversion fee of 4% when they convert your dollars to the currency needed for depositing into your recipient’s PayPal account if the payment is going overseas.
Wise Vs PayPal: Fees
PayPal charges fees for domestic payment(s) and international transfers. They also add currency conversion fees for foreign currency payments. Additionally, recipients may face fees when withdrawing money from their PayPal account.
Wise’s fees are clear and displayed upfront before you make a payment. You’ll see the exact amount your recipient will receive, and the funds are directly deposited into their bank account.
Fee Comparison:
International Transfer Fees: Which is Cheaper?
To send money internationally, it’s usually cheaper than your bank. But before you decide, it’s smart to compare a few options.
Let’s see how Wise and PayPal stack up.
We’re looking at how much your friend would receive in British pounds (GBP) or euros (EUR) if you send them money in US dollars (USD):
Fee Comparison Table
| Transaction | Wise | PayPal |
| $1000 to GBP | Mid-market exchange rate | Mid-market rate + 3%-4% markup |
| Transfer Fee: ~0.41% ($4.10) + ~$0.50 | Transfer Fee: 5% ($50, capped at $4.99) + 3%-4% currency conversion fee | |
| Total Fees: ~$4.60 | Total Fees: ~$54.99 (max cap) + 3%-4% on exchange rate | |
| $5,000 to GBP | Mid-market rate | Mid-market rate + 3%-4% markup |
| Transfer Fee: ~0.41% ($20.50) + ~$0.50 | Transfer Fee: 5% ($250, capped at $4.99) + 3%-4% currency conversion fee | |
| Total Fees: ~$21.00 | Total Fees: ~$254.99 (max cap) + 3%-4% on exchange rate | |
| $1,000 to EUR | Mid-market rate | Mid-market rate + 3%-4% markup |
| Transfer Fee: ~0.41% ($4.10) + ~$0.50 | Transfer Fee: 5% ($50, capped at $4.99) + 3%-4% currency conversion fee | |
| Total Fees: ~$4.60 | Total Fees: ~$54.99 (max cap) + 3%-4% on exchange rate | |
| $5,000 to EUR | Mid-market rate | Mid-market rate + 3%-4% markup |
| Transfer Fee: ~0.41% ($20.50) + ~$0.50 | Transfer Fee: 5% ($250, capped at $4.99) + 3%-4% currency conversion fee | |
| Total Fees: ~$21.00 | Total Fees: ~$254.99 (max cap) + 3%-4% on exchange rate |
In all cases, Wise is cheaper. This is because PayPal adds extra fees to its exchange rates.
Which Service, Paypal or Wise, Offers Quicker International Transfers?
When you send money internationally through PayPal, it’s delivered almost instantly to the recipient’s PayPal account. They can then use the funds to make online purchases or payments.
However, if they want to transfer the money to a bank account, it might take time or involve fees, depending on where they’re located.
On the other hand, with Wise, more than 50% of payments reach their destination instantly, and 90% arrive within 24 hours. However, the exact delivery time depends on the destination and your chosen payment method.
You’ll get an estimated arrival time when you set up your payment.
Keep in mind that the speed of the transaction can vary based on individual circumstances, and not all transactions may be eligible for such fast delivery.
Comparison of International Transfer Limits Between Paypal and Wise
PayPal’s transfer limit depends on your account status, while Wise allows account holders to send payments based on currency-specific limits.
PayPal Limits
Unverified account holders can make one-time payments of up to $4,000.
Once your account is verified, you can transfer individual payments of up to $10,000 (or sometimes $60,000), with no total limit on the amount you can send across multiple transactions.
Wise Limits
For most foreign currencies, Wise payments are either unlimited or have high limits, around £1 million or equivalent in other currencies.
Additional limits may apply based on the transaction method or the specific currency.
If you want to learn more about Wise limits, read this article.
Wise Vs PayPal: Payment Methods
Wise and PayPal offer different payment methods. You can use your bank or a card to pay with both of them, but the fees and speed of the money can change depending on how you pay.
With PayPal, you have many payment options. You can use your bank account, debit or credit cards like Visa, Mastercard, Discover, American Express, PayPal Credit, or any balance in your PayPal account.
Wise also offers various ways to pay. You can use direct debit, regular bank transfers (ACH), or wire transfers. You can also use your debit or credit cards or the balance in your Wise account.
If you pay with a credit card, it might cost a bit more, but the money usually arrives within a few hours. Wire transfers might take 1 to 2 business days, but they’re generally cheaper. ACH payments are one of the most affordable options available.
Wise Vs PayPal: Card Comparison
GUESS WHAT? Wise and PayPal both offer cards for US customers, but they have different features and fees.
With a PayPal card, you can get either a credit or a debit card. The PayPal debit card doesn’t have monthly charges, and there are no fees when you spend in US dollars.
However, if you use it to send money overseas, there’s a 2.5% foreign transaction fee, and you might also face out-of-network ATM fees.
On the other hand, Wise offers a multi-currency holding account with a linked debit card. There’s a one-time order fee of $9, and you can use this card in over 150 countries.
When you spend overseas, you’ll get the mid-market exchange rate, which can save you money. Plus, you get some fee-free ATM withdrawals each month and low fees after that.
Wise Vs PayPal: Business
PayPal and Wise both offer money transfer services for businesses, but they focus on different things.
PayPal is great for online sellers because it’s easy to use with popular online stores. It helps you accept PayPal payments offline and make more sales.
Wise Business is more about international services for businesses. It supports many currencies and offers fair currency conversions for sending payments or spending money abroad.
With PayPal Business accounts, you can create an account for free and only pay when you make sales. You can take payments online and offline, and they offer debit and credit cards as well as loans.
Wise Business charges a one-time fee of $31 to open an account. They also provide debit and expense cards and support over 40 currencies. You can conveniently receive payments in 10 currencies with local bank details.
Wise Vs PayPal: Receiving Money
You can use both PayPal and Wise to receive payments. With Wise, you have two options: you can receive money in your Wise account, or you can prefer to have it sent directly to your bank account.
Wise allows you to send payments to bank accounts in over 160 countries. Plus, you can receive payments in up to 10 different currencies using your Wise account. These currencies include USD, EUR, CAD, and GBP.
On the other hand, with PayPal, any money you get will go into your PayPal account. From there, you can use the money online, transfer it to others, or withdraw it to your bank account. If you go for an instant withdrawal from PayPal, there may be a fee associated with it.
Wise Vs PayPal: Customer Support
Both PayPal and Wise have helpful information online, like FAQs. If you need assistance, how you contact them depends on your question. For quick and personalized help, you can log into your account and start a chat within their app.
For example, if you have a question about a recent transaction, you can open the Wise app and ask right away.
PayPal also gives advice on its website about the best way to contact them for different types of questions. So, if you’re not sure how to resolve a problem with your account, you can visit their website and find out what to do next.
Ease of Use
When you create an account, you have the option to do so online or through the app for both PayPal and Wise.
For sending money internationally, PayPal accepts payments from your credit or debit card, bank transfer, or your PayPal balance. On the other hand, Wise allows for bank transactions, card payments, and even Apple Pay transactions.
When you want to transfer money, Wise enables you to transfer funds directly to your recipient’s bank account. In contrast, with PayPal, the money you send is deposited into the recipient’s PayPal account.
Both PayPal and Wise provide support services in many languages, making it easier for users around the world to access assistance in their preferred language.
Their limits on how much money you can send vary depending on the destination country and the type of account you have, ensuring security and compliance with regulations.
PayPal Vs Wise: Supported Currencies
PayPal payments support 25 different currencies for PayPal accounts held in 200 countries and regions.
Wise supports over 40 currencies and allows you to transfer payments to more than 160 countries. Their website has a full list of supported currencies.
However, I’ll add some random currencies to help you understand.
PayPal supports the following currencies: AUD, BRL, CAD, CNY, CZK, DKK, EUR, HKD, HUF, ILS, JPY, MYR, MXN, TWD, NZD, NOK, PHP, PLN, GBP, SGD, SEK, CHF, THB, RUB, and USD.
Currencies supported by Wise are: RS, AUD, BDT, GBP, BGN, CAD, CLP, CNY, HRK, CZK, DKK, EGP, EUR, GEL, HKD, HUF, INR, IDR, ILS, JPY, KSh, MXN, MAD, NPR, NZD, NGN, NOK, PKR, PHP, PLN, RON, KRW, THB, ZAR, LKR, SEK, CHF, TRY, AED, UAH, VND, SGD, MYR, and USD.
Wise also offers local account details in EUR, GBP, USD, AUD, NZD, CAD, SGD, TRY, HUF, and RON.
To receive money, Wise allows you to accept payments via bank transfer in several currencies. You need to open a balance in the currency you’re being paid in and provide your account details to the person paying you.
PayPal Vs Wise: Safety
PayPal and Wise are both safe options for handling money. PayPal is one of the largest payment companies globally and is regulated worldwide.
FinCEN regulates Wise in the US and other global authorities. Both companies use smart technology and have dedicated teams to keep customer money secure.
PayPal Vs Wise: Pros and Cons
| PayPal | Wise | |
| Pros | You can use it worldwide | Send money instantly using email or phone |
| Transfer money to PayPal accounts instantly | Transparent fixed fee(s) and exchange rates | |
| Hold and exchange 25 currencies in your account | Send money to 160+ countries | |
| Offers business accounts services | Hold and manage 40+ currencies | |
| Cons | Complex and often high or hidden fees | Fees vary by destination country |
| Exchange rate markups | Online/mobile payments only, no branches | |
| Limited to sending money to PayPal accounts or Xoom | No option for cash payments |
So, in simpler terms, PayPal is good for worldwide coverage and instant transfers to other PayPal accounts, but it has complex and sometimes high fees.
On the other hand, Wise offers transparent fees and exchange rates, but it’s limited to online/mobile payments and doesn’t support cash payments.
Conclusion
Now that you’ve learned about PayPal and Wise, it’s decision time.
Consider what’s important to you: transparency, cost, or speed.
Whether it’s sending money to family or managing international business transactions, choose the platform that fits your needs.
Ready to take control of your global transfers? Check out everything I discussed about PayPal and Wise, and make your move today.
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