PayPal vs Wise: Which one is better for Americans

When you need to send money from the US to another country, comparing different money transfer services is a smart decision that can save you a lot of money and time. PayPal and Wise are two of the most popular options for sending international payments. But which one is right for you?

PayPal is the digital payments giant that most Americans are already familiar with from online shopping. In turn, Wise specializes in international money transfers with transparent pricing and no currency exchange rate markups.

Here's everything you need to know about PayPal vs Wise.

PayPal vs Wise: Overview

What is PayPal and how does it work?

PayPal started as a way to pay online, but it's grown into a huge financial platform that can handle everything from splitting dinner bills to international money transfers.

You can shop in stores and online with the PayPal Debit Card, earn cash back on purchases, and set up payment plans to buy now and pay later.¹

For money transfers, PayPal lets you send, receive, split, and pool money with friends and family. You can even buy and sell cryptocurrency through the platform.¹

For international transfers, PayPal operates in 2 ways: you can send money directly to another PayPal account in 110+ countries, or use their Xoom service for more delivery options like cash pickup and bank transfers to places like India and Mexico.²

That said, PayPal charges hefty fees for international transfers—a 5% fee with a maximum of 4.99 USD, plus a currency conversion spread between 3% and 4%.³

What is Wise and how does it work?

Wise allows you to send international money transfers using the mid-market exchange rate. Instead of moving your money across borders, Wise uses local bank accounts in different countries to make transfers faster and cheaper.

When you send money through Wise, you deposit funds into their local US account, and they pay out the equivalent amount from their local account in your recipient's country. This system allows Wise to use the mid-market exchange rate you see on Google without adding a spread on top like PayPal does.

You'll still pay for your transfer, but only through transparent transfer fees starting at 0.57%.^{4 9 10}

Wise covers 160 countries, and there are also additional features beyond money transfers. You can open a multi-currency account that holds over 40 different currencies, get local bank details in 9 countries, and use a Wise debit card for international spending.

PayPal vs Wise: Fees & pricing

Exchange rates

The biggest cost difference between PayPal and Wise is the exchange rates.

When you convert your USD into another currency, PayPal takes a slice by giving you a worse exchange rate than the mid-market.³

For example, if the rate you see on Google is 1 USD = 1.25 CAD, PayPal might only give you 1 USD = 1.20 CAD. In other words, you'll lose money on every dollar you send.

PayPal's exchange rate markups are between 3% and 4%, which is quite a lot.³

Wise uses the mid-market exchange rate, the one that banks use when they trade currencies with each other. They earn revenue through their transfer fees, but you're not paying anything extra to convert from USD to another currency.

Costs

Here's what you can expect from your transfer with Wise vs PayPal:

PayPal might show a lower transfer fee upfront, but their exchange rate markup could make the total cost much higher than Wise.

Transfer fees

Both PayPal and Wise charge you transfer fees.

PayPal charges 5% of your sending amount, but caps it at 4.99 USD maximum.³

This means if you send 100 USD, you pay 4.99 USD. If you send 1,000 USD, you still pay 4.99 USD. However, you'll also pay their 3% to 4% currency conversion fee on top of that, which isn't capped.³

Wise also charges you a percentage of your sending amount, starting at 0.57%, and it's not capped.⁴ The exact fee depends on how you pay (bank transfer vs debit card), which currencies you're converting, and how much you're sending.

A quick price comparison

Even with the PayPal fees, including both transfer fees and the currency conversion, PayPal isn't always more expensive than Wise. However, it often is. Here's how they compare:

PayPal vs Wise: Supported countries

Here are the supported countries and features available with PayPal vs Wise:

PayPal lets you send money to 110 countries using their standard service, covering most major destinations worldwide.²

You can also use Xoom, PayPal's remittance service, to reach places like India and Mexico and have more delivery options like cash pickup, bank deposits, and mobile wallet transfers.²

PayPal vs Wise: Money transfer times

With PayPal's standard service, you can only send money to another PayPal account internationally. If both you and your recipient already have PayPal accounts, the money shows up immediately.²

However, if your recipient doesn't have a PayPal account, then you'll have to use Xoom, and delivery times can vary depending on the destination and payment method.

Wise is also a very fast way to send money abroad, with most transfers completing within 24 hours, and 64% arriving in under 20 seconds. You'll see your expected delivery time before you confirm your transfer.⁸

For speed, PayPal wins if you're sending to another PayPal user. However, for predictable timing to most bank accounts worldwide, Wise is the better choice.

*Transaction speed claimed depends on individual circumstances and may not be available for all transactions.

PayPal vs Wise: Security

Both PayPal and Wise are secure and regulated. They're some of the most established money service providers in the industry, so your money is safe during international transfers.

PayPal uses encryption to safeguard your financial information and runs 24/7 fraud monitoring systems. They don't share your complete financial details during transactions, and when you send money using their "Goods & Services" option, eligible purchases are covered by PayPal Purchase Protection.²

Wise is regulated by financial authorities in multiple countries where they operate, including the US, UK, and EU. They use bank-level security measures and keep customer funds separate from their operating money, which means your transfer funds are protected even if something happens to the company.

Overall, both services are legitimate ways to send money abroad.

Frequently asked questions

What apps are like PayPal?

You'll find a few different apps that work in similar ways to PayPal for both domestic and international payments. For example, Venmo handles peer-to-peer payments in the US but doesn't do international transfers. For international transfers, you can use PayPal's Xoom or services like Western Union, MoneyGram, and WorldRemit.

Is PayPal a good service?

PayPal works well for what it was designed to do. It's convenient and widely accepted across the US. However, for international payments, PayPal may not be the most cost-effective option. The fact that you have to pay a 5% (capped at 4.99 USD) transfer fee plus a 3% to 4% currency exchange markup can make it expensive compared to other services like Wise, which uses the mid-market exchange rate.²

Is there a monthly fee for PayPal?

No, PayPal accounts don't have monthly fees. You'll only pay when you use their services, like international transfers or currency conversions. The PayPal Debit Card is also free to use. This is a typical practice for most providers.

You can send money internationally with PayPal if your recipient has a PayPal account, but for other transfers, you'll have to use Xoom, which comes with its own fees and rules.

PayPal also charges hefty transfer fees and marks up the mid-market rate. It's convenient, but it can be expensive.

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Sources

1. PayPal - Home
2. PayPal - Send money internationally
3. PayPal - PayPal Consumer Fees
4. Wise - Pricing
5. PayPal - What is the maximum amount I can send with my PayPal account?
6. Wise - Full Guide to (Transfer)Wise Limits
7. PayPal - Worldwide
8. Wise - Home
9. For fee details and terms, visit Wise.com/pricing
10. Wise is not a bank. The Wise Multi-Currency Card is issued by our sponsor Bank(s), member(s) FDIC. Fees and T&C apply. See https://income-climb.live/%3C/a%3E for details.

Sources checked 09/12/2025