TransferWise is peer-to-peer international money exchange platform, where it pairs buyers and sellers of different currencies. It offers a helpful online calculator to help you determine the fees incurred for exchanges across borders.
PayPal transfers 1.6 billion payments each quarter. PayPal might not be thought of as a traditional foreign exchange payments provider, but if you manage a business that trades or exports outside of the UK (or any other country for that matter) you may already be exploiting the PayPal platform to support those payments.
Much like TransferWise, PayPal does not operate in the way that a traditional currency broker does. Accounts are free to set up, although there are fees involved if you would like to open a business account to set up frequent payments. There are also fees associated if you make payments by direct debit or credit card during a foreign currency transaction due to currency conversions. Fees are pre-advised by PayPal; we have provided details below. However, please note that these are subject to change.
TransferWise enjoys some stellar feedback from their customers, with over 40,000 reviews on Trustpilot earning them the maximum 5-star rating. Common negative comments are concerned with how and when user identity is verified. This process could negatively affect transfer timescales. Therefore, it is best to check with TransferWise to determine whether or not an identity verification is necessary before commencing large transfers with a strict or urgent deadline. PayPal scores low in terms of customer services on Trustpilot, with a 1-star review from under 2,000 reviews.
TransferWise Features
- Peer-to-peer platform
- Nominal fees on transfers
- Transfers completed within 1–4 days
- Borderless accounts without overseas address requirement
- Offers four currencies: AUD, EUR, GBP or USD
- Single payment or repeat payment options
- Provides rate information and fees prior to transfer via online calculator
- Payments via debit card, Apple Pay, SWIFT transfers and bank transfers
- Secure payments function available via TransferWise feature in Facebook Messenger
- 5-star Trustpilot rating from over 40,000 reviews
- Uses mid-market rate supplied by Reuters
PayPal Features
- Trade globally with functionality for buying and selling online
- Collect and make international payments
- Easily accessible, user-friendly platform
- One-touch payments
- Buyer protection, fraud protection and data encryption
- Mobile app for on-the-go payments
- Website available in several European languages as well as Japanese
The pros and cons of using TransferWise
pros
Make transferring on the go simple, with their new TransferWise bot available through Facebook Messenger
Offers the ability to carry out batch payments to up to 1000 recipients – useful for regular payments to self-employed contractors or freelancers.
The main website is available in: English, French, German, Italian, Japanese, Hungarian, Polish, Portuguese, Russian and Spanish.
cons
Difficult to compare easily to other providers due to the fees, but does make them transparent and details them all at the start, so there are no surprises
Cannot accept out bound payments from Hong Kong
Customers have voiced concerns about the specific point at which Transferwise verify your identity as this may not be your first transfer. This could impact your transfer timescales, so best to confirm directly with them if you do have an urgent, large transfer due.
The pros and cons of using PayPal
pros
Varying tariff plans available.
Extensive integration.
Developer Tools.
Universal payment system.
cons
Problems with account reliability.
Poor customer support.
Not intended for high-risk business.
The relatively high cost of services.
Price Comparison
TransferWise
There are no fees for bank transfers incurred by TransferWise. Fees are applicable, however, when paying through debit or credit card. Payments are only allowed to the country or region registered on the card.
|
Currency |
Maximum Amount |
Card Fees |
Business Card Fees |
|
GBP |
£2,000 |
Debit – 0.2% |
Debit – 75p |
|
Credit – 0.3% |
Credit – 1.7% |
An additional 3% is charged to hedge against exchange rate fluctuations for specific amount transfers. Fees are paid according to the calculated charges on the original amount inputted for transfer.
PayPal
The seller can select who gets charged for the PayPal fees during the transaction, which is usually the buyer. It is either one or the other and it cannot be both. This is usually £1.99 or £3.99, depending on the receiving country. Money sent using a debit, credit or prepaid card are charged with a fixed fee at 3.4% of the total amount +20p. Conversion fees are added for payments which involve foreign currency conversion. This ranges between 3% to 4% above the base exchange rate.
Using PayPal balances for cross-border payments will incur different fees corresponding to the location it is sent to.
International Presence
The borderless accounts option by TransferWise can accept payments through four currencies: AUD, EUR, GBP or USD. PayPal, on the other hand, supports a much wider foreign currency selection and is able to accept payments made through 27 currencies. Both global companies support 27 currencies. TransferWise has personal and business accounts options available to 50 countries. PayPal has a much wider scope, being able to access over 200 countries.
Ease of Use
TransferWise allows new users to open an online account quickly. Their website is easy to navigate and utilising their account functions is intuitive. Google or Facebook accounts may be used to set up a new account. Its Facebook Messenger enabled TransferWise bot makes transfers simpler. Hassle-free regular payments can be made through their borderless account functions using USD, GBP, EUR and AUD. Customer services are available during office hours from Monday to Friday. Clients can contact the company via live chat through their website, telephone and email.
PayPal has a very accessible website with a wide global reach. It has a vast amount of businesses accepting or offering the platform as a mode of payment. The platform has a simple login interface with the ability to perform one-touch payments. PayPal is available on iOS and Android apps. The platform can be linked to a Slack account allowing funds to be sent to friends and co-workers.
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