In the rapidly evolving world of digital finance, two major players have emerged at the forefront: PayPal vs Wise (formerly TransferWise). Both have leveraged innovative technology to provide robust solutions for businesses. However, their features, fees, and overall functionality differ significantly, making it crucial for businesses to choose the right platform that suits their needs.
This article aims to provide an in-depth comparison of these two platforms to help UK businesses make an informed decision.
PayPal vs Wise
| Features | PayPal | Wise |
|---|---|---|
| Multi-currency account | Available in certain regions | Available worldwide in 50+ currencies |
| Currency conversion | Uses PayPal’s exchange rates | Uses real mid-market exchange rates |
| Direct Debit | Available in the US, UK, and EU | Available in the US, UK, EU, and Australia |
| International payments | Supports 200+ countries | Supports 60+ countries |
| Mobile banking | Available through PayPal Business app | Available through Wise app |
| Online invoicing | Free invoicing tool available | Free invoicing tool available |
| Card payments | Accepts all major cards | Wise card available in certain regions |
| Online shopping protection | Buyer and Seller protection available | Not provided |
| Global marketplaces integration | Integrates with eBay, Etsy, etc. | Not provided |
| Payroll services | Not provided | Not provided |
| API integration | Available with PayPal API | Available with Wise API |
| Automated payments | Available through PayPal Payments Pro | Available for businesses |
| Account management | Available through PayPal Business app | Available through Wise app |
| Scheduled payments | Available through PayPal Payments Pro | Available for businesses |
| Business loans | Available through PayPal Working Capital | Not provided |
| Mass Payments | Available through Mass Pay | Available for businesses |
| Cross-border payments | Supports 200+ countries | Supports 60+ countries |
| Payment links | Available through PayPal.Me | Available through Wise payment links |
| Subscription management | Available through PayPal Payments Pro | Available for businesses |
| Fraud prevention tools | Available, includes advanced fraud filters | Not provided |
| Online store setup | Available through PayPal Commerce Platform | Not provided |
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 | Mettle Business Banking ✓ Business Bank Account ✓ Online & App ✓ Quick & Easy Application Process Pricing Trial period Contact | |
 | Monzo Business Banking ✓ Business Current Account ✓ Dedicated mobile app experience ✓ FSCS Protected Pricing Trial period Contact | |
 | Virgin Money ✓ Business M Account ✓ In-Store, Online & App Banking ✓ Insights & Forecasting Platform Pricing Trial period Contact |
PayPal
As a pioneer in the field, PayPal has been providing digital payment solutions for over two decades. Catering to businesses of all sizes, it offers a plethora of features aimed at facilitating seamless financial transactions both domestically and internationally.
Cutting edge payroll software
- Powerful and easy to use
- HMRC & RTI compliant
- Used by payroll pros
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- Great for startups
- Powerful web page builder
- E-commerce available
Supercharged content planning
- Great for marketing
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- Manage social media
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- Launch your website fast
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Pros and cons
Pros
- Widely accepted on a global scale, making it convenient for international transactions.
- Extensive integrations with various e-commerce platforms and online marketplaces.
- Offers business loans and working capital.
- Strong fraud prevention and account security measures.
- PayPal Here app allows card payments using a mobile device.
Cons
- Transaction fees can be relatively high, especially for international transactions.
- Some users report sudden account holds or freezes, affecting cash flow.
- Dispute resolution can be lengthy and is often seen as favouring the buyer.
- Currency conversion rates may not be as competitive as other platforms.
- Certain features may not be available in all countries.
Fees and charges
| Fee Type | Charges |
|---|---|
| Transaction fee (sales within the UK) | 2.9% + £0.30 GBP per transaction |
| Transaction fee (international sales) | 4.4% transaction fee plus a fixed fee based on currency received |
| Currency conversion fee | 2.5% |
| Setup or monthly fees | No charge |
Unique and standout features
PayPal’s position as a globally recognised platform makes it a prime choice for businesses operating internationally.
It’s not just a payment gateway but an entire ecosystem of financial tools.
Its integrations with numerous e-commerce platforms make it incredibly easy for businesses to set up online stores.
PayPal also offers buyer protection and fraud prevention tools, further boosting customer confidence.
In addition, the PayPal Here feature enables businesses to accept card payments in-person using a mobile device – a valuable tool for SMEs and vendors.
Perhaps one of its standout features is the provision of business loans and working capital, a boon for businesses looking for financial leverage.
Wise
Formerly known as TransferWise, Wise has made significant strides in the international money transfer sector, offering a transparent and cost-effective solution. Its focus lies in cross-border transactions and currency exchange, providing businesses with a practical alternative to traditional banking methods.
Pros and cons
Pros
- Typically offers better exchange rates than most banks and payment platforms.
- Transparent pricing with no hidden fees.
- The multi-currency account allows holding and managing 50+ currencies.
- API integration allows businesses to automate their payment process.
- Convenient for businesses making frequent international transactions.
Cons
- No option for business loans or working capital.
- Lacks certain features like online shopping protection and fraud prevention tools.
- Not all currencies and countries are supported.
- Less universally recognised compared to PayPal.
- Does not integrate with online marketplaces like Amazon or eBay.
Fees and charges
| Fee Type | Charges |
|---|---|
| Transfer fees | Vary based on the currency being transferred (available on the Wise website) |
| Setup or monthly fees | No charge |
| Conversion fees | Low and transparent (varies depending on the currencies involved) |
Unique and standout features
Wise’s USP lies in its dedication to transparency and cost-effectiveness.
Their real-time exchange rate feature ensures that businesses get the best available rates for currency conversion.
Moreover, they disclose all fees upfront, ensuring no unexpected charges.
One of Wise’s standout features is its multi-currency account, allowing businesses to hold and manage over 50 currencies in one place.
This feature is particularly useful for businesses with international operations or those dealing with multiple currencies regularly.
Furthermore, Wise’s API integration allows for seamless automation of the payment process, significantly reducing administrative load.
Conclusion – PayPal vs Wise
Both PayPal and Wise offer strong benefits to businesses.
While PayPal shines with its widespread recognition, e-commerce integration, and the ability to offer business loans, Wise excels in transparency, cost-effectiveness, and its multi-currency account feature.
The choice between the two largely depends on the individual needs of a business.
For those primarily concerned with international recognition, integrated e-commerce solutions, and business loans, PayPal is likely the more suitable option.
Conversely, for businesses primarily engaged in cross-border transactions and requiring transparency and efficient currency management, Wise is the obvious choice.
FAQ
Wise typically offers better exchange rates and lower fees for international transactions, making it a more cost-effective choice for businesses dealing with frequent cross-border transactions.
PayPal offers extensive integrations with various e-commerce platforms. Wise, on the other hand, doesn’t have these integrations, focusing more on international money transfers and currency exchange.
As of now, only PayPal offers business loans. Wise doesn’t provide any such services.
Wise generally offers more competitive exchange rates compared to PayPal, as they use the mid-market rate for conversions.
Both platforms prioritise safety and have robust security measures in place. However, PayPal does offer additional features such as buyer protection and advanced fraud prevention tools.
Yes, both PayPal and Wise support setting up recurring payments. You can automate payments for regular transactions with both platforms.