Revolut vs PayPal - how do they compare?

Zorica Lončar

16.02.23 (updated more than 1 year ago)

6 minute read

Looking for a new way to manage your money? You might be looking for a new current account, and want a change from a traditional bank. If so, there are lots of options available, including digital banks and online money services.

In this guide, we’ll be comparing two of these solutions - Revolut and PayPal. Both are apps that aim to bring you almost the entire financial world right on your smartphone.

To help you choose the right option for your needs, we’ll be comparing costs, features, security, customer support and international payment services.

If you’re interested in sending money overseas or shopping abroad, Wise could be a better solution. With Wise, you can send, spend and convert money in 50+currencies and receive money in 10 currencies, all for low fees and the mid-market exchange rate.

But for now, let’s get back to Revolut vs. PayPal.

Revolut vs. PayPal - an overview

PayPal has been at the forefront of the digital payment sector for over 20 years, playing a major role in the online shopping revolution.¹

Its services have evolved over this time, and it now offers everything from fast online transfers to a full range of merchant services. You can use it to pay friends and family, shop online at millions of websites, and as a digital wallet.

Revolut was launched in 2015² as a way to create a frictionless economy. It offers convenient digital access to a current account, along with a wide range of payment, savings and investment services for users.

With millions of users registered with the service since then, Revolut is moving towards the goal of making money work better for people.

Both Revolut and PayPal differ in the services they offer, but they also have several features in common:

Both provide international money transfers, although they both do this in very different ways.
Both are very easy and quick to sign up with, although with PayPal you do need to link another bank account, credit or debit card.
Both allow you to send and receive money very easily.
Both offer a debit card, although PayPal’s card is only available to business users.

Costs to get started

It’s quick, cheap and easy to get started with both Revolut and PayPal. However, PayPal may have the slight edge here, as it’s one of the easiest and most accessible services out there.

It’s even possible to pay for items through PayPal without even having an account, simply by adding payment details.³

Signing up with PayPal is free, takes only a few minutes and grants access to PayPal’s wallet system, which can hold up to 25 other currencies.

Revolut requires a little more information, including a piece of ID, a selfie and a mobile phone number. However, you do get a fuller featured product for this extra effort, as Revolut offers a current account that you can transfer funds into and use like any other bank account.

If you want a debit card, you will have to pay for delivery⁴. Revolut also has three other paid plans, if you want more perks compared to the free service. But getting a basic account and adding money to it is free, as are local payments and transfers to other Revolut users.

Accounts and features

PayPal only offers one, free account for personal customers. Most people who shop online likely already have one. It allows you to pay for goods anywhere in the world, as well as getting paid by people and businesses in other countries.

You’ll need to link a bank account, debit or credit card to your PayPal account in order to fund your payments and purchases.

Revolut, by contrast, has four account tiers, each of which has far more to offer than PayPal. These are:⁵

Standard, which is a free account (less the delivery cost for the debit card) with no perks and strict limits to how it is used.
Plus, which costs £2.99 per month but gives you purchase protections, parent-controlled <18 accounts, priority support and free card delivery.
Premium, which for £6.99 per month offers higher interest rates, discounted fees on international transfers, higher withdrawal limits, perks for travellers and airport lounge access via SmartDelay.
Metal, which for £12.99 per month comes with a metal debit card, 1% cashback and a 2.5% AER interest rate. Plus, 10 commission-free stock trades each month, lower investment fees, higher withdrawal limits and greater discounts for international transfers.

Features

PayPal offers many features you’ll already be aware of. For example, instant payments, payment links, QR codes, and the ability to link any number of accounts you want. But there are also other features that you might not be so familiar with.

The first is PayPal’s Buyer Protection programme. This allows you to get a full refund if an item you purchased didn’t arrive at all, was damaged or wasn’t what you ordered. All you need to do is raise the issue within 180 days.⁶

PayPal also offers a buy now, pay later feature in the form of Pay in 3. This is effectively an interest-free loan that allows for a single purchase to be paid for over three months instead.⁷

Alternatively, whilst PayPal does not offer a consumer debit account, it does offer PayPal Credit. This comes with four months interest-free on any purchase made over £99.⁸

Finally, PayPal offers the ability to buy and sell cryptocurrency (specifically Bitcoin, Ethereum, Bitcoin Cash and Litecoin). However, you can’t use this crypto to make purchases via PayPal.⁹

By contrast, Revolut offers a far more robust trading platform as part of its financial services. It offers the ability to buy and sell up to 90 other tokens using over 30 fiat currencies, with the same immediacy as any other currency exchange on the platform.¹⁰

Alongside this, Revolut allows you to invest in the stock market, with an allowance of commission-free trades available on the higher account tiers. ¹¹

You can also invest in commodities, and even get cashback from these investments if you’re subscribed to Revolut Metal.¹²

Revolut’s other features are ones focused far more on pleasure than business. For example, on higher tiers of its paid plans, you can get cashback on any bookings made through Stays, medical insurance, flight insurance and ticket coverage.

As well as these, you can also get discount airport lounge access, which is free via SmartDelay for flights delayed by over an hour.¹³

Protection, security and support

Neither Revolut nor PayPal are banks. This means they don’t provide FSCS protection for your money¹⁴. However, they each take their own individual approaches to security and safeguarding.

PayPal has its Buyer Protection programme. This protects you from fraud, liability for unauthorised purchases made from an account. It also makes getting a refund easier if a purchase does not arrive or is not what the seller claims.⁶

As PayPal is not a bank, the primary independent point of contact for any issues is the Financial Ombudsman Service.¹⁵

As Revolut does offer a debit card service, it uses its own safeguarding systems. These ensure that any money deposited by customers into their accounts is stored in a dedicated safeguarding account, and that money is protected in case the institution fails.¹⁶

Account security

Many of PayPal’s earliest and most successful innovations as a company involved encryption and protection of transaction information. However, this is only one piece of PayPal’s security suite.

Alongside encryption, app-based two-factor authentication, touchless payments and buyer protection, PayPal also has a fraud protection system designed to avoid the risks of identity theft.⁶

Revolut also uses advanced and proactive security systems. Money in Revolut is stored by regulated banks, provides one-touch systems for freezing cards as well as encrypted private keys for crypto wallets.¹⁷

It also has a highly proactive fraud prevention system that will automatically flag and lock suspicious accounts whilst they are being investigated.

International payments

PayPal is often used as a way to buy internationally, and it can hold up to 25 different currencies.

However, it’s not necessarily the best or cheapest way to make international transfers. You’re not likely to get the best exchange rates with PayPal, and there are also fees to be aware of. For example, there’s a 5% transfer fee for any purchases where currency conversion is necessary, with a cap of £2.99.¹⁸

So how does Revolut compare? The good news is that it tends to offer better exchange rates and hasmore transparent transaction fees. These are reduced when buying on weekdays, compared to weekends when there’s an extra charge to pay.¹⁹

What this proves is that the best option for FX is a service designed with multiple currencies in mind.

This is why Wise is such a popular choice for international payments and transfers. The Wise multi-currency account lets you manage 50+ currencies at once, sending money to 70+currencies for low fees and the mid-market exchange rate.

You can even spend in the local currency in 175 countries using the Wise debit card.

Please see the Terms of Use for your region or visit Wise fees & pricing for the most up-to-date information on pricing and fees

After reading this, you should have a better idea of what both PayPal and Revolut have to offer. This should help you choose the right solution for your needs.

PayPal is still fantastic at what it was made to do - facilitating online shopping and making secure transfers. Revolut, meanwhile, is a good option if you’re looking for a digital bank account, along with access to other financial services such as investing and cryptocurrency.

But when it comes to international transactions, Wisecould be the best choice - offering low fees, secure transfers and a fair exchange rate every time.

Sources used for this article:

Sources checked on 19-January-2023.

*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.