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Sending and receiving international payments can be expensive and unpredictable.
For Indian freelancers, startups, and exporters, it’s often an uphill battle.
Why?
Banks are slow, expensive, and quietly add hidden FX markups that eat into your earnings. Due to RBI regulations, there are only a handful of platforms that operate smoothly in India for cross-border payments.
In the end, you’re usually left with four or five real options — and Wise and PayPal pop up in almost every search.
Both are trusted worldwide. But they’re not built for the same purpose.
Wise is designed for transparent, low-cost bank transfers with real exchange rates and no hidden fees. PayPal, on the other hand, is made for easy online sales, card payments, and buyer protection.
So, which should you choose? It all comes down to what your business really needs. Is it better FX rates and smooth transfers, or an all-in-one online checkout trusted by buyers everywhere.
Wise vs PayPal: Quick Comparison
What is Wise (TransferWise)?
Wise, formerly known as TransferWise, is a UK-based financial technology company that helps individuals and businesses send money internationally at low cost. Unlike traditional banks or many payment processors, Wise uses real exchange rates with transparent fees.
For businesses, Wise offers multi-currency accounts. These accounts allow companies to hold money in over 40 currencies and receive payments like a local in the US, UK, EU, Australia, and more. Wise is licensed and regulated by financial authorities in the UK, EU, US, and other regions.
What is PayPal?
PayPal is one of the world’s largest online payment platforms. It started as a peer-to-peer payment service and expanded into a full payment gateway for online businesses, freelancers, and marketplaces.
PayPal lets businesses accept payments in over 200 markets. You can receive payments via card, PayPal balance, bank account, or even credit options offered by PayPal in some countries. It also provides buyer and seller protection for eligible transactions, which has made it popular for online retail.
Wise vs PayPal: Features Compared
Account Setup and Requirements
Wise
- Easy online registration.
- Requires identity and business verification.
- You can open multi-currency accounts with local bank details in major currencies like USD, GBP, EUR, AUD, SGD.
- No merchant checkout or card acceptance for direct payments on a website.
PayPal
- Simple to sign up, but you must link a bank account or card to withdraw funds.
- Ideal for e-commerce stores and freelancers needing an easy checkout or invoice link.
- Offers payment buttons, subscriptions, and integration with most shopping carts.
- Holds can apply for some accounts or transactions, especially for new sellers.
Limitations In India
Wise Limitations in India
Wise is known for transparency and fair pricing, but its services in India come with certain restrictions due to local regulations and Wise’s business model.
- No INR multi-currency account: Indian users can’t hold INR balances in a Wise multi-currency account. You can send money abroad in INR, but you can’t keep INR stored like foreign currency balances.
- No domestic transfers: Wise doesn’t support domestic transfers within India. It only processes outward remittances (sending money abroad) and inward remittances (receiving from abroad, for eligible businesses).
- Only eligible firms get business account: Only registered businesses that meet compliance conditions can use Wise to get local account details for receiving payments from abroad.
Tip: Freelancers and sole proprietors cannot create a wise business account since september 2023.
PayPal Limitations in India
PayPal is widely known and trusted, but Indian users should note a few important constraints:
- No domestic wallet: PayPal India doesn’t work like PayPal in the US or EU where you can keep a wallet balance. Funds received must be withdrawn to a linked Indian bank account automatically.
- No direct personal transfers: PayPal India does not support sending money peer-to-peer domestically. You can only use PayPal to shop online or receive business payments from overseas customers.
- Limited inward remittance uses: For inward payments, you must withdraw funds to your bank account in India within 24 hours. Personal remittances must usually be done through Xoom, not PayPal itself.
- No outward remittance: PayPal India does not allow you to send money abroad for personal or business purposes directly from an Indian PayPal account. To send money overseas, users have to use remittance channels like a bank.
Supported Currencies and Countries
Wise supports 40+ currencies for holding and sending. You can receive local payments in 10+ currencies using account details like IBANs, routing numbers, or sort codes.
PayPal supports payments in over 25 currencies. It is available in over 200 countries, but local bank withdrawal options vary by country.
Business Tools and Integrations
Wise
- Multi-currency balances.
- Local account details to receive payments like a local business.
- Batch payments for paying global staff or contractors.
- Integration with accounting tools like Xero and QuickBooks.
PayPal
- Payment gateway for websites.
- One-time and recurring invoices.
- Subscriptions and memberships.
- Dispute resolution and seller protection.
- Payouts to multiple recipients.
- Integration with Shopify, WooCommerce, BigCommerce, and more.
Ease of Use
Wise focuses on straightforward transfers and account management. You use its web app or mobile app to send or receive money and convert currencies at the real exchange rate.
PayPal is more versatile for online sales. It’s easy for customers to pay with their balance, cards, or PayPal Credit. The PayPal dashboard is more geared towards transaction management, invoicing, and buyer communications.
Fees and Pricing
One of the biggest differences is how each platform charges for currency conversion and transfers.
Wise Fees
Wise uses the mid-market exchange rate without markup. You pay a transparent fee that covers a small percentage of the amount sent plus a fixed fee depending on the currency route.
Example: Sending USD 1,000 from the US to India costs around 0.4% to 1% plus a small, fixed fee, depending on the payment method. Wise’s multi-currency account has no monthly fee, but you pay small fees for outgoing transfers and currency conversions.
There are no receiving fees for incoming payments using your local account details.
Pro Tip: Karbon can be a stronger option if you want better FX rates for high-volume transfers.
PayPal Fees
PayPal charges transaction fees for receiving payments and currency conversions. For international transactions, you pay:
- A percentage fee (varies by country, generally 3.4% to 4.4% plus a fixed fee per transaction)
- An additional cross-border fee
- A currency conversion spread (typically 3% to 4% above the base rate)
For example, receiving USD 1,000 from an international client can cost you around 4% to 6% of the amount. You may also pay withdrawal fees, depending on your country.
PayPal’s buyer and seller protection fees are built into these charges.
Transfer Speed and Limits
Wise transfers typically take from a few seconds to two business days, depending on the currencies involved, payment method, and local banking systems. For example, USD to EUR is often instant. USD to INR can take a few hours to one business day.
PayPal transfers between PayPal accounts are instant. However, withdrawing money from PayPal to your local bank can take 1 to 5 business days, depending on your country and whether you choose standard or instant withdrawal (instant withdrawals often have extra fees).
Wise has higher send limits than PayPal for verified business accounts. PayPal, on the other hand, puts a hold or limits on accounts to manage risk, especially for new or high-risk sellers.
Wise vs PayPal: Safety and Reliability
Both Wise and PayPal are regulated by major financial authorities and use strong encryption to protect data.
Wise
- Licensed by the UK Financial Conduct Authority and equivalents worldwide (including India through RBI-compliant partners).
- Funds are safeguarded, not lent out.
- No buyer or seller protection — you are responsible for verifying recipients.
PayPal
- Licensed as a money service business in many countries.
- Offers buyer and seller protection for eligible transactions.
- Dispute resolution system for chargebacks and fraud.
- May freeze or hold funds if it detects suspicious activity.
For businesses selling goods or services, PayPal’s protection policies can add peace of mind but also cause frustration if funds are held.
Wise vs PayPal: Which One Should You Use?
The right choice depends on how your business operates.
Choose Wise if you:
- Send or receive large payments in multiple currencies.
- Want the real exchange rate and low fees.
- Pay global contractors, freelancers, or suppliers regularly.
- Already have another way to collect customer payments (like Stripe).
Choose PayPal if you:
- Sell goods or services online and need an easy checkout.
- Want instant payments from global buyers.
- Need buyer protection to boost customer trust.
- Offer digital products, courses, or subscriptions.
Final Thoughts
Wise and PayPal both make cross-border payments easier but serve different goals. If your priority is saving on fees and getting real exchange rates, Wise is hard to beat (unless you are using Karbon, of course!).
If you need a complete payment solution with checkout tools and buyer protection, PayPal remains the go-to.
Compare fees for your specific currencies, know your business needs, and if it makes sense, use both to get the best of both worlds.
FAQs:
Is PayPal safe for businesses in India?
Yes. PayPal is regulated as a money service business in many countries and uses strong encryption to protect transactions. It also offers buyer and seller protection on eligible transactions. Some users may face unexpected account holds or disputes, so it is important to follow compliance rules closely.
Is Wise safe for sending money abroad?
Wise is licensed by financial regulators like the UK’s FCA and is fully compliant in India through RBI-authorised partners. It does not lend out your money. All customer funds are safeguarded and kept separate from its operational accounts.
Which is better for sending money abroad: Wise or PayPal?
For sending money overseas at the real exchange rate with low fees, Wise is usually the better choice. You get clear pricing, no hidden markups, and faster bank payouts. PayPal is more suited for accepting payments than sending them abroad from India.
Which is better for receiving payments from clients: Wise or PayPal?
It depends on your business. If you run an online store, PayPal is easier for clients because it supports card payments, subscriptions, and buyer protection. If you are a freelancer or exporter who wants low fees and good FX rates, Wise is better for receiving direct transfers from overseas.
Can I use both Wise and PayPal together?
Yes. Many businesses use PayPal for online checkout and Wise to withdraw funds at better FX rates or pay contractors abroad. Comparing fees for each currency route helps you save the most.
Does PayPal or Wise hold my money?
PayPal can hold or freeze funds if it detects suspicious activity or disputes. Wise does not freeze funds for normal transfers but it does not offer buyer or seller protection, so always check recipient details carefully.
