Wise vs PayPal: real cost of sending money across currencies

Almost everyone already has PayPal, so it feels like the obvious way to send money abroad. But "everyone has it" and "it is the cheapest way to move money" are two very different claims. The real gap between Wise and PayPal is not about features. It is about where each one hides its price. Wise shows you the actual exchange rate, then a separate fee. PayPal folds its margin into the rate itself. Once you see that, the choice gets a lot easier.

Side by side

Both providers price differently by country, by payment method, and by whether a payment is personal or for goods and services. The percentages above are estimates meant to show the shape of the cost, not quotes; check the current figures on Wise's and PayPal's own fee pages, and always compare the amount your recipient actually receives.

What US$1,000 across currencies really costs

Numbers make the structural gap concrete. Say you send US$1,000 and the recipient needs euros. Here is roughly where each provider's cost lands, using each company's own published pricing. Live quotes move by corridor and by day, so treat these as sourced estimates, not a guaranteed quote.

Same US$1,000, and the difference is roughly US$5 to US$9 versus about US$45, most of it hidden in PayPal's rate rather than its fee. On small same-currency payments the gap nearly vanishes; it widens fast as the amount and the currency distance grow. Always confirm the current figures on each provider's own fee page before you send.

Which to pick, and when

The one distinction that decides it

Strip away the brand familiarity and it comes down to one thing: how each one prices. Wise earns on a visible fee over the true exchange rate, so you always know the margin. It sits right next to the transfer. PayPal earns mostly on an invisible spread inside the exchange rate. That rate looks official, but it has already shifted a few percent in PayPal's favour by the time you read it. That one difference explains how two services that both "send money abroad" can land so far apart on cost.

So the honest read is not "Wise is better than PayPal." It is that PayPal is built for reach and protection, and Wise is built for cheap, transparent conversion. Reach for PayPal when you need a network and a safety net. Reach for Wise when you are moving real money between currencies and want to keep the most of it. For most cross-currency transfers, that points to Wise, but the moments when PayPal's protection or reach saves you are real, not marketing.

Getting paid, not just sending

Most comparisons only weigh sending, but for freelancers and remote workers the receiving side matters just as much, and the two work very differently. Wise gives you genuine local account details in a handful of core currencies: a US routing and account number, a euro IBAN, a UK sort code and more, so a client pays you by ordinary local bank transfer as if you banked in their country, and you hold or convert at the mid-market rate. PayPal skips the bank details entirely; a client pays you in a couple of clicks with just your email, which is wonderfully low friction, but you meet its fees and the same FX markup the moment you convert or withdraw.

There is also a personal versus business split worth knowing on PayPal. A "goods and services" payment charges the seller a fee and gives the buyer Purchase Protection, while a "friends and family" payment gets no protection at all, and is free only when it is domestic and you fund it from your PayPal balance or a bank account. Fund the same payment with a card and PayPal charges the sender a percentage plus a fixed fee. Send "friends and family" across a border and the 5% international fee (capped at US$4.99) lands on top of whatever that funding fee was, plus the conversion spread if the currency changes. Two rules of thumb follow: never dress up a real purchase as friends-and-family to dodge a fee, because you throw away the protection you might need, and never assume a "personal" payment is free, because the funding method and the rate markup are both still working quietly in the background.

What protects the money you leave in each one

Purchase Protection covers a purchase that goes wrong. It says nothing about what happens to your balance if the company holding it fails, and that question has a less comfortable answer. Neither a Wise balance nor a PayPal balance is a bank deposit, so in the UK and the EEA neither one sits behind a deposit guarantee scheme.

Wise says so itself. Its UK entity, Wise Payments Ltd, is an e-money institution authorised by the FCA, and Wise states that its e-money and payment services are not subject to the FSCS. In the EEA you are a customer of Wise Europe SA, a payment institution supervised by the National Bank of Belgium, whose payment services are not subject to the Belgian Deposit Guarantee Scheme. What you get instead is safeguarding: Wise has to keep customer money apart from the money it runs the business on. It holds that money as cash at banks and in low-risk liquid assets: mainly government bonds in the UK, money market funds in the EEA.

The two protections work differently. With a deposit guarantee, a scheme pays you compensation up to its limit when a bank fails. Safeguarding pays nothing. It is a rule that your money should still be there, ring-fenced from the firm's other creditors, when someone comes to hand it back. The FCA spells out what that means for UK payment and e-money firms in its consumer guidance: there is no FSCS protection, and if the firm goes out of business you should get most of your money back, but it may take some time and may not be the full amount, because the administrator or liquidator can take some of the costs out of it.

PayPal is in the same position in the UK. Accounts there sit with PayPal UK Ltd, also an FCA-authorised e-money institution, and its user agreement says the electronic money in your account is not covered by the FSCS. It is held in segregated and safeguarded bank accounts that, in an insolvency, form a separate pool used to repay users ahead of PayPal's other creditors, after the costs of the insolvency. The EEA has a detail that catches people out: PayPal's European entity is licensed as a bank in Luxembourg, yet its user agreement says the money in your account is electronic money and not a deposit, so the Luxembourg deposit guarantee scheme, or any equivalent in the EEA, cannot protect it. Unlike the UK agreement, the EEA one does not describe a safeguarded pool of customer money.

The US is the one place deposit insurance can come into it, and only on conditions. PayPal's balance terms call your funds an unsecured claim against PayPal unless you have opened a PayPal Debit Card account, enrolled in Direct Deposit, or bought or received crypto with a personal PayPal account. Do one of those and your US dollar balance is placed at FDIC-insured program banks, where it is eligible for pass-through insurance up to the standard FDIC limit. PayPal is careful to add that this covers the failure of the program bank, not the failure of PayPal. Wise works the same way from the other side: a US Wise balance is not FDIC-insured unless you opt in to its interest feature, which moves your dollars to a program bank with pass-through cover.

None of this makes either one unsafe, and on this point the two are close to a draw. It does make them different from money in an ordinary bank current account. Before you park a large balance in either, check which entity holds your account and what its own page says about protection.

Can you send money from Wise to PayPal?

Not as a direct transfer, no. Wise pays out to bank accounts, and a PayPal balance is not a bank account, so there is no field where you type someone's PayPal address and press send. Wise's own guide to the question says the same thing. What you can do is move money out of Wise and into your own PayPal account, and there are three ways in.

First, the Wise card, usually the least painful. Wise says that in most countries you can add it to PayPal like any other debit card and use it to top up, and PayPal's help centre lists a Visa or Mastercard debit card as one of its two ways to add money, with the money landing in seconds. Second, your Wise account details. Wise does not show up in PayPal's list of banks, so you choose "manually add your bank account" and type them in. Be aware of what is and is not documented here: Wise publishes a currency-by-currency table for linking the two, but it is written for the other direction, receiving PayPal withdrawals into Wise. Whether PayPal will also pull a top-up from those same details depends on your country and currency, and neither company spells that out. PayPal adds two rules of its own: the account must be in your name, and with an institution in the country your PayPal account belongs to. It also warns that online-only accounts are often not compatible, so the link can simply be refused. Worth trying, not worth counting on. Third, the slow, reliable one: send from Wise to your own bank, then add money to PayPal from there. PayPal's help centre puts a bank top-up at up to five business days.

Whichever route you take, do the currency conversion inside Wise. Convert to the currency your PayPal account is held in at the mid-market rate first, then top up with money that already arrives in the right currency. Let PayPal do the converting instead and you hand back the 3 to 4% above its own base rate that its consumer-fee page lists, which was the whole reason for using Wise in the first place.

Which wins, task by task

Decide it with your own numbers

Rather than lean on a generic ranking, match an account to the currencies you actually send, receive and spend in, and to where you call home:

• Best bank account for nomads our free picker weighs Wise, PayPal and the rest against the currencies you earn, spend and send in.
• Wise vs Revolut if your real question is about a multi-currency spending app rather than one-off transfers.