PayPal vs Wise for business banking

Updated on 7 August 2023

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.

Featured pro tools

 
Quick, easy, no commitment!

This article aims to provide an in-depth comparison of these two platforms to help UK businesses make an informed decision.

Video: Choosing a business bank account

PayPal vs Wise

FeaturesPayPalWise
Multi-currency accountAvailable in certain regionsAvailable worldwide in 50+ currencies
Currency conversionUses PayPal’s exchange ratesUses real mid-market exchange rates
Direct DebitAvailable in the US, UK, and EUAvailable in the US, UK, EU, and Australia
International paymentsSupports 200+ countriesSupports 60+ countries
Mobile bankingAvailable through PayPal Business appAvailable through Wise app
Online invoicingFree invoicing tool availableFree invoicing tool available
Card paymentsAccepts all major cardsWise card available in certain regions
Online shopping protectionBuyer and Seller protection availableNot provided
Global marketplaces integrationIntegrates with eBay, Etsy, etc.Not provided
Payroll servicesNot providedNot provided
API integrationAvailable with PayPal APIAvailable with Wise API
Automated paymentsAvailable through PayPal Payments ProAvailable for businesses
Account managementAvailable through PayPal Business appAvailable through Wise app
Scheduled paymentsAvailable through PayPal Payments ProAvailable for businesses
Business loansAvailable through PayPal Working CapitalNot provided
Mass PaymentsAvailable through Mass PayAvailable for businesses
Cross-border paymentsSupports 200+ countriesSupports 60+ countries
Payment linksAvailable through PayPal.MeAvailable through Wise payment links
Subscription managementAvailable through PayPal Payments ProAvailable for businesses
Fraud prevention toolsAvailable, includes advanced fraud filtersNot provided
Online store setupAvailable through PayPal Commerce PlatformNot provided
PayPal vs Wise

Wallester Business
✓ Virtual & Physical Cards
✓ No Setup Fees
✓ No Monthly Fee
Pricing Trial period Contact

Revolut Business
✓ Business Current Account
✓ Award-Winning Mobile App
✓ Quick & Easy Application Process
Pricing Trial period Contact

Tide Business Bank Accounts
✓ Free, Plus, or Pro Account
✓ iOS & Android Mobile App
✓ Upload & Auto-Match Receipts
Pricing Trial period Contact

Card One Money
✓ No Credit Checks
✓ Simple Fees
✓ Up To 3.5% Cashback
Pricing Trial period Contact

ANNA Money
✓ Apply In 10 Minutes
✓ Bookkeeping & Payroll Tools
✓ User-Friendly Mobile App
Pricing Trial period Contact

HSBC Business Banking
✓ Business Current Account
✓ In-Branch, Online & App Banking
✓ FSCS Protected
Pricing Trial period Contact

Metro Business Banking
✓ Business Current Account
✓ High Street Presence
✓ FSCS Protected
Pricing Trial period Contact

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.

Pipedrive logo The CRM platform to grow your business
  • Great for entrepreneurs
  • Powerful data analytics
  • Manage sales and data
Rippling logo Manage all your employee data
  • Run in 90 seconds
  • 100% error-free
  • Automatic tx filing
Wix logo Powerful web builder and advanced business tools
  • Great for startups
  • Powerful web page builder
  • E-commerce available
Planable logo Supercharged content planning
  • Great for marketing
  • Better than lists or sheets
  • Manage social media
Webador logo Create a new website in 10 minutes. Easy.
  • Launch your website fast
  • Powerful data intuitive
  • No coding skills needed

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 TypeCharges
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 fee2.5%
Setup or monthly feesNo charge
PayPal fees and charges

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 TypeCharges
Transfer feesVary based on the currency being transferred (available on the Wise website)
Setup or monthly feesNo charge
Conversion feesLow and transparent (varies depending on the currencies involved)
Wise fees and charges

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

Which is better for international transactions, PayPal or Wise?

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.

Can I integrate PayPal or Wise with my e-commerce platform?

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.

Can I get a business loan from PayPal or Wise?

As of now, only PayPal offers business loans. Wise doesn’t provide any such services.

Which platform offers better currency conversion rates?

Wise generally offers more competitive exchange rates compared to PayPal, as they use the mid-market rate for conversions.

Which platform is safer, PayPal or Wise?

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.

Can I set up recurring payments with both PayPal and Wise?

Yes, both PayPal and Wise support setting up recurring payments. You can automate payments for regular transactions with both platforms.

Reviewed by , Managing Director

Compare ⓘ