Is PayPal safe? How PayPal works

Yumiko Kijima

PayPal is a popular way to shop online, and send and receive payments for both personal and business reasons. If you’re a PayPal user, you may be wondering how the system works - and if it’s a safe way to send and spend your money.

This guide covers all you need to know about using PayPal. We’ll also highlight some of the fees you’ll pay when using Paypal, and cover Wise as a safe, cheap and smart international transfer alternative.

Sending money overseas with PayPal? Watch out for the exchange rates offered

It’s worth noting at the outset that although PayPal is safe and convenient, it may not be the most affordable way to make an international payment.

Let’s look at one of the key costs associated with PayPal - the exchange rate markups used for international transactions.

Here’s a worked example: Sending 10,000 MYR to a $ account in the USA with PayPal compared to Wise.

Provider Transfer fees Exchange rates Recipient gets...
paypal-logo-my PayPal¹ 0 MYR Exchange rate PayPal decides (1 MYR = 0.221011USD) 2210.11 USD - receiving fee
tw-logo-my Wise² 57.25 MYR Real exchange rate (1 MYR = 0.229589 USD) 2,285.43 USD Send money

(May 27 2020, at 19:59(GMT+2))

As you can see, in this case, even though PayPal states there is no transfer fee, your recipient will get less money in the end compared to the equivalent payment made using Wise. That’s because there is a markup added to the exchange rate used by PayPal. This markup is actually where PayPal’s fee lies - it’s just trickier to see than the transparent charge per transaction used by Wise.

We’ll look at PayPal’s exchange rates - and how you might get a better deal with an alternative provider - in more detail a little later.

Send money to 70+ countries with the real exchange rate🚀

Is PayPal really safe?

As one of the key players in online payments globally, PayPal puts a high priority on customer security. Their reputation depends on the trust of users, and as such there are a range of protections offered.

PayPal information security

Your information is held safely using SSL technology, which means that you don’t need to give your sensitive details, like your debit/credit car, or bank account number, out to your recipient. All transactions are then monitored by the PayPal fraud team, so they can step in if there is suspicious activity logged on your account.³⁺⁴

PayPal buyer protection

If you’re using PayPal to shop online, it’s good to know you’ll be covered by PayPal’s buyer protection scheme for all eligible purchases. Terms and conditions apply to this service, but it does mean you have a degree of protection if your goods don’t arrive, or if the item which turns up on your doorstep is not as described by the seller.³

PayPal seller protection

PayPal also offers protection to sellers, investigating buyer claims to make sure sellers aren’t subjected to fraudulent claims. If you can prove the item you’re selling was shipped in good faith, you may be able to get your money back after PayPal investigates the issue.³

How to use PayPal

You can use PayPal for online shopping, to create and pay invoices, or to send money to friends and family. Here are some of the most common uses.

Shop online

PayPal is a commonly available means of payment for online shopping. You’ll see the PayPal symbol when you come to pay, and you’ll simply need to follow the prompts on screen, log into your account, and pay with your linked bank account or card.

There are also often special offers and promotions available when using PayPal as your payment method for online shopping - check out the details online.⁵

Send payments

You’ll also be able to use PayPal for sending payments domestically and internationally, using your PayPal balance, a linked card or a bank account to fund the payments. It’s possible to send money to friends and family, as well as for business payments, although the fees and conditions of these different transaction types may vary.

Here’s what the PayPal website says about sending money from Malaysia:⁶

It’s free to send payments. You don’t need to pay a transaction fee when you send payments with PayPal. The recipient covers that*. If you send a payment overseas in a different currency, a small conversion fee applies.*”

If you’re sending money overseas, it’s worth checking out the full details of PayPal’s exchange rates - more on that below - as you’ll pay the conversion fee as part of the transaction. As highlighted above, you may also find your beneficiary pays a fee for receiving the money.

What is PayPal’s exchange rate?

To understand the cost of any international payment, you’ll need to look both at the transfer fee and the exchange rate which will be used.

PayPal adds a currency conversion fee to the mid-market exchange rate, which can come as a surprise, and make your transfer more expensive than you expect. The charge runs from 3% to 4.5% depending on the currency you’re sending.⁷

You’ll be able to get more information on this in the PayPal terms and conditions - or you can see what exchange rate PayPal offers for your particular transfer, and compare it to the mid-market rate which you’ll find on Google. Take a look at the fees and exchange rates available from other providers to make sure you’re getting the best deal available.

A cheap and transparent alternative: Wise

Wise is a smart, modern alternative to making international payments using PayPal, or a traditional option like your bank.

Wise takes a different approach to sending money overseas. Instead of using the payment routes preferred by traditional banks - which can be slow and expensive - Wise has a network of local bank accounts in countries all over the world.

You pay money to the Wise account in your home country when you want to make an international transfer - so in this case, you’ll likely pay MYR to the Malaysian Wise account. Clever tech then instructs the equivalent amount to be paid out to your recipient, from the Wise account in the country you’re sending to. This cuts the costs, and can be quicker, too.

In Malaysia, Wise is regulated by Bank Negara Malaysia (Central Bank of Malaysia) and holds a Remittance licence.⁸

Independent reviews hosted by TrustPilot show that 94% of Wise customers who listed a review thought the service was excellent or great. The data hosted by TrustPilot is dynamic and based on real customer experiences. Check out the current ratings for Wise - and any other international payment provider you’re considering using - online.⁹

Ready to get started? You can easily send money overseas from Malaysia to 70+ countries with no hidden fees online and via the Wise app.

To send money with Wise,

  1. Register for free
  2. Choose an amount to send
  3. Add recipient’s bank details
  4. Verify your identity
  5. Pay for your transfer by bank transfer or debit/credit card

And that is it! You can track your transfer in your account and your recipient will also be notified when a transfer reaches them.

Moreover, you can also receive money to a multi-currency account from the UK, US, Australia, New Zealand and any Eurozone country, just as if you had a local account there.

PayPal is deservedly popular as a simple way to shop online and make some payments to friends and family. However, it’s worth checking out the charges for different services, as PayPal may not offer the best available value for international payments due to their currency conversion fees. Compare the costs of sending money with PayPal, against the price of the same transaction with Wise to see if you can save.

Join over 7 million people who get the real exchange rate🌏

Wise for sending money


  1. PayPal (Researched at 19:59(GMT+2) on May 27 2020)
  2. Wise (Researched at 19:59(GMT+2) on May 27 2020)
  3. PayPal | Is PayPal secure?
  4. PayPal | Online Security: Seller & Buyer Protection & Fraud Prevention
  5. PayPal | Online Shopping: Get the Best Online Deals
  6. PayPal | Send Payments Online
  8. Wise | How is Wise regulated in each country?
  9. Trustpilot | Wise Reviews

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.

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