When it comes to sending and receiving money globally, two popular choices are PayPal and Wise, formerly TransferWise. Both platforms offer convenient and reliable solutions for international transfers, but they have distinct features and advantages. In this article, we will compare PayPal and Wise across various factors such as fees, exchange rates, supported countries, and payment methods.
- 1 What is PayPal?
- 2 What is Transferwise?
- 3 Wise vs PayPal Fees
- 4 Which Is Faster, PayPal or Wise?
- 5 Wise vs PayPal Verification Requirements
- 6 Payment and Receiving Options: PayPal or Wise?
- 7 Which Countries Are PayPal or Wise Available?
- 8 Which Currencies Do PayPal and Wise Support?
- 9 PayPal or Wise: Which One Is Easy to Use?
- 10 Which Is Safer, PayPal or Wise?
- 11 PayPal or Wise for International Transfers: Making the Right Choice
What is PayPal?
PayPal is a well-known global online payment system that operates in numerous countries. It allows you to send and receive money online. In addition to money transfers, PayPal enables you to make online payments for various goods and services.
What is Transferwise?
Wise, previously known as TransferWise, is a fintech that enables you to make cheaper international money transfers compared to traditional banks. It uses the mid-market exchange rate for currency conversions, providing you with more favorable rates compared to banks. Additionally, Wise applies a flat fee for transfers, which is generally lower than traditional bank fees.
Wise vs PayPal Fees
When it comes to fees for international transfers, PayPal and Wise take different approaches. PayPal charges a fee of 5% of the transaction amount, and if currency conversion is involved, an additional 4% fee is applied. This currency conversion fee is a percentage added on top of the exchange rate, making PayPal transfers more costly. Additionally, it’s important to note that when receiving money in a PayPal account, the recipient may also incur charges or fees.
In contrast, Wise adopts a transparent fee structure. Instead of adding markup to exchange rates, Wise has a fixed fee that covers the associated costs of the payment, typically around $4.30 to $4.80 for major currencies. Additionally, Wise charges a variable fee for currency exchange, which ranges from 0.4% to 0.5% for major currencies. This transparent fee structure ensures that customers know exactly what they are being charged without any hidden fees.
To illustrate the cost difference, let’s consider a scenario where $1000 USD is sent to Euro. With Wise, the recipient would receive approximately 889.15 EUR after fees. In comparison, using PayPal would result in a lower amount of around 857.53 EUR after fees.
Which Is Faster, PayPal or Wise?
Wise offers different transfer times depending on the selected payment method. By using local bank accounts for transfers, most Wise transactions can be completed within 24 hours. However, in certain cases, it may take up to 2 working days to process the transfer. Wise offers the flexibility of choosing between fast and easy transfers, which have higher costs but ensure near-instant processing, and low-cost transfers, which have lower fees but may take slightly longer to process.
In comparison, if you already have a PayPal account with available funds, transfers through PayPal are typically instant. However, it’s important to note that the transfer times for PayPal may be subject to additional factors such as verification requirements or external delays.
Wise vs PayPal Verification Requirements
Both PayPal and Wise have verification processes in place to ensure the security and integrity of their services, but there are notable differences between the two.
To verify your PayPal account, you need to provide basic information such as your name, email address, and date of birth. Additionally, you may need to link a credit card or bank account. Verifying your bank account confirms your PayPal account, but you can also complete the verification process by linking and confirming a debit card. If you don’t have a bank account, you can still use PayPal, but there may be limitations on the amount you can send and receive.
On the other hand, Wise’s verification process depends on factors like your location and the amount of money you’re sending. Typically, Wise requests identity verification by submitting photo ID, proof of address, and possibly a photo of you holding your ID.
Payment and Receiving Options: PayPal or Wise?
You can pay for your Wise transfers using options such as credit cards, debit cards, online bank transfers, Apple Pay, Google Pay, POLi, and direct bank debits. Your recipient will receive the money directly into their bank account.
PayPal, on the other hand, enables you to pay for your transfer using options such as bank transfers, credit cards, debit cards, and PayPal transfers. When using PayPal, you can choose to have the recipient receive funds either through a bank transfer or directly into their PayPal account.
Which Countries Are PayPal or Wise Available?
Wise enables transfers to 160 countries, covering most of Europe, the United States, India, Brazil, Australia, Canada, Kenya, and South Africa. PayPal, on the other hand, operates in more than 200 countries, including the UK, US, Canada, India, Singapore, Nigeria, Kenya, and UAE. Both platforms offer support for a diverse range of countries, but Wise has a broader reach compared to PayPal. This makes Wise a preferable choice for if you are seeking to send money to countries where PayPal is not available.
Which Currencies Do PayPal and Wise Support?
Wise offers support for over 40 currencies, while PayPal supports 25 currencies. Both platforms cover major currencies like USD, EUR, GBP, AUD, CAD, and NZD, as well as other currencies such as BRL, INR, and HKD. However, Wise has a broader range of supported currencies compared to PayPal. This makes Wise a more suitable choice if you need to send money to countries where PayPal does not support the local currency.
PayPal or Wise: Which One Is Easy to Use?
Wise offers support in 15 languages on its website and provides a free app for iOS and Android users. They offer customer support through live chat, email, and phone. On the other hand, PayPal is available in a wide range of countries and supports 17 different languages. The PayPal app is available on both iOS and Android, enabling users to check balances, add or withdraw funds, and send money. PayPal also provides extensive support through a help center on their website and a community forum to address user inquiries and resolve issues.
Which Is Safer, PayPal or Wise?
Both PayPal and Wise prioritize security and have measures in place to protect your account. They use features like two-factor authentication, fraud protection, and encryption to safeguard personal information. PayPal is regulated by the Financial Conduct Authority (FCA) in the UK, the Federal Trade Commission (FTC) in the US, and other financial regulators worldwide. Wise is also regulated by the FCA in the UK, the Australian Securities and Investments Commission (ASIC), and other relevant regulators in the European Economic Area (EEA) and beyond.
PayPal or Wise for International Transfers: Making the Right Choice
When choosing between PayPal and Wise for international transfers, consider the advantages and disadvantages of each platform. PayPal is widely accepted, making it convenient for money transfers, online payments and e-commerce integration. However, be mindful of its fees, including a percentage fee and potential currency conversion charges, which can affect the total transfer cost.
In contrast, Wise offers competitive exchange rates, low fees, and transparent pricing. With the use of the mid-market exchange rate and clear fee breakdowns, Wise ensures transparency and cost-effectiveness in international transfers.
Is Wise or PayPal better?
Wise stands out for its competitive rates, low fees, and transparent pricing, making it an excellent option for international transfers. Meanwhile, PayPal provides a wider range of services, including online payments and seamless integration with e-commerce platforms, in addition to money transfers.
Can I use PayPal with Wise?
Yes, you can indeed use PayPal with Wise. By linking your Wise account to your PayPal account, you can set up Wise as your account for PayPal withdrawals.
Is Wise cheaper than PayPal?
In general, Wise is cheaper than PayPal. Wise charges a flat fee for transfers, while PayPal charges a percentage fee plus a small markup on the exchange rate. dditionally, PayPal recipients may also incur charges for receiving funds.