Global payments
Posted on Mar 24, 2025
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Imagine this: You've just completed a project for a US client. Payment time arrives, and they ask – "Should I pay it through PayPal or Wise?"
You are aware that there are fees, delays, and exchange rate markups involved but which one is preferable?
Don't worry – we're cutting through the jargon and simplifying Wise vs PayPal to assist you in making the correct decision.
Platform Overview – Wise vs PayPal
Wise (formerly TransferWise) and PayPal are equally popular for receiving international payments, but they have different features. Let’s compare the two international payment gateways.
Wise: Cost-Effective & Transparent
Pros of using Wise
Provides the mid-market exchange rate with no secret markups.
Low and clear fees for international payments.
Ideal for freelancers, SMEs, and businesses making regular global payments.
You can receive USD, EUR, GBP, AUD, etc., as if you had a local bank account in those countries.
Transparent tracking of transfers, with notifications at each step.
Cons of using Wise
Some clients (especially US-based ones) are more familiar with PayPal and may hesitate to use Wise.
Unlike PayPal, Wise does not offer any dispute resolution for goods/services.
You need to use a separate invoicing tool (or integrate with your own) to bill clients.
PayPal: Convenient but Costly
Pros of using PayPal
Global reach, widely accepted by clients.
Allows you to send invoices or payment links directly with professional templates.
Very fast when both parties are on PayPal
Good for instant one-off payments but expensive for regular transfers.
Cons of using PayPal:
High fees and secret currency conversion charges.
Withdrawal to your local bank may take 2–5 days.
Accounts can be limited or frozen without clear reason, especially for high-value transfers.
Related Read: Best Way to Get International Payments in India.
Fees Breakdown – Who Charges What?
Wise Fees
Conversion fee is 1.6-1.7%, excluding e-FIRC which is for 2.5 USD.
No hidden foreign exchange markups and GST charges apply.
For a $1,000 transfer:
Total fee: ~$24.50 (conversion + fixed + e-FIRC)
If $1 = ₹84 (mid-market rate), $1,000 = ₹84,000
After fees: You receive approximately ₹84,000 – ₹2,040 = ₹81,960–₹84,000, depending on timing and slight fluctuations
PayPal Fees
4.4% transaction fees + 4% currency conversion fee.
Additionally, 4% forex markup.
For a $1,000 transfer:
Transaction fee: $44 + $0.30 = $44.30
GST: 18% of $44.30 ≈ $7.97
Total fee = ~$52.27
Net amount left = ~$947.73
After 3% currency conversion markup: ~$918.30
At an adjusted rate (say ₹83 instead of ₹84), you receive around ₹76,220 – ₹77,000
Wise gives you ₹6,000–₹7,000 more than PayPal on a $1,000 transaction due to:
Compliance and Tax Reporting – What You Should Know
Compliance is an important consideration for Indian businesses and freelancers when receiving cross-border payments.
Wise
Assists with FIRA, e-BRC, and Purpose Code reporting.
Cooperates nicely with RBI rules for cross-border payments.
PayPal
No inherent support for e-BRC or FIRA.
You need to manually supply tax documents.
Related Read: How to be Compliant with RBI Rules on Cross-Border Payments
Infinity– Better Than Both?
Rather than using Wise or PayPal, why not employ a payment solution designed for Indian businesses? Infinity supports receiving international payments in more than 50+ currencies. You can easily receive your payment by opening an Infinity account which hardly takes 5 minutes. Follow a simple 5 minutes KYB process and you have your multi-currency account ready for receiving payments.
Why Infinity?
Flat 0.5% transaction fees with no other costs and zero markup.
RBI compliant with automatic filing of purpose code and instant FIRA with no additional cost.
Real-time tracking and 1 day settlement speed.
Recommended Read: Get Set Up a Multi-Currency Business Account within Minutes with Infinity
FAQs
Which is safer, Wise or PayPal for Indian users?
Both are secure for international transactions, though Wise provides stronger compliance and transparency for Indian business firms.
Does Wise support INR?
Wise doesn't maintain INR but permits direct global payments into Indian bank accounts.
Can freelancers in India use PayPal legally in 2025?
Yes, with stiff fees and regulatory problems indian freelancers can use PayPal for receiving international payments. It is preferable to use Infinity instead for better pricing and hassle-free transfers.
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