What are the pros and cons of PayPal? Consumer guide

Gabriela Peratello

PayPal¹ is popular as a way of shopping online, sending payments and accessing credit. But — like any service — it isn’t perfect. So — what are the advantages of PayPal, and what are the disadvantages to watch out for?

This guide covers all you need to know about PayPal’s pros and cons, to help you decide when to pick PayPal, and when to use an alternative service like Wise.

📑 Table of Contents

Overview: pros and cons of PayPal

First of all let’s look at a quick overview of the advantages and also the disadvantages of PayPal. We’ll run through these one by one, next.

✅ Pros❌ Cons
  • Easy to use accounts with lots of features
  • Widely accepted
  • Free to use for many domestic transactions
  • Secure means of payment
  • Convenient way to send money
  • Access deals and cash back
  • High international costs
  • You need a PayPal account to receive money
  • Often targeted by scammers
  • Withdrawing funds to a bank account takes time


What are the advantages of PayPal?

Wondering: what’s the benefit of PayPal, and should I sign up? Here are some great features and benefits you’ll want to know about:

Easy to use accounts with lots of features

One of the reasons PayPal is so ubiquitous is that PayPal accounts are easy to open and use, and offer customers a whole range of services.

With your PayPal account you can shop online, send money to friends and family, make donations, get credit and buy now, pay later services, and access exclusive deals and offers.

You can even have your salary deposited into your account, and use PayPal to pay bills, save, budget and invest in crypto.

Widely accepted

There are more than 360 million PayPal accounts globally, with services available in more or less every country and territory around the world.

That makes it popular with merchants, who often offer PayPal as a means of payment when shopping online.

Free to use for many domestic transactions

It’s free to open a PayPal account, and it’s also free to make donations, and to shop online or in person, as long as no currency conversion is involved.

It’s also free to receive USD payments, and to send domestic payments to family and friends if you fund the transfer with your PayPal balance, linked bank account or Amex Send Account.

Secure means of payment

When you send or receive a PayPal payment, and when you shop online, you won’t need to share your bank or card details with the other party. That can put your mind at rest when shopping with new merchants as there’s no danger of your card being cloned or misused.

PayPal also adds in an extra layer of security with its buyer protections, which means that if you buy something online which either fails to arrive or isn’t as described you may be able to get your money back.

Convenient way to send money

PayPal to PayPal transfers can be made with just the recipient’s email or phone number, and arrive instantly. That means there’s no need to find or hand over your bank details, and no waiting around to get your money.

Access deals and cash back

Shop with PayPal to get exclusive deals and cash back offers with partner merchants. You can also stack rewards to get discounts, cash back and reward points on the same purchase.

Instant credit options

Finally, PayPal also offers various consumer credit options. On eligible purchases you’ll be able to apply for buy now, pay later services, which split the cost of your bill into 4 equal payments.

You’ll then pay the full amount in installments over 6 months, interest free. If that doesn’t appeal you can also get a PayPal cash back MasterCard to earn extra rewards when you shop.

What are the disadvantages of PayPal?

Of course, it’s not all good. Here are some disadvantages of PayPal to look out for.

Confusing fees

You’ll want to read the PayPal US fee schedule² carefully before you transact, as there are some fees which are confusing or which may not be intuitive.

For example, you’ll be able to send money to a friend in the US for free if you use your PayPal balance, but not if you fund the transfer with a debit card.

You may also find that more than one fee applies to a single transaction, particularly when transacting internationally.

High international costs

PayPal’s international costs are particularly high. Whenever you need to make a foreign currency transaction you’ll pay a currency conversion fee of 3% - 4%, plus any relevant service fee.

Sending money to a friend for example will come with the currency conversion charge, plus a transfer fee of up to 4.99 USD. If you need to send an international payment, you’ll find you’re better off with a specialist service, like Wise.

Learn all about PayPal international fees here

You need a PayPal account to receive money

If you send a PayPal payment to someone else, they’ll need to have — or open — a PayPal account themselves to get the funds. Lots of people already have PayPal accounts, but if your recipient doesn’t, this can be an unnecessary hassle.

Often targeted by scammers

Because it’s super convenient to send money with PayPal, it’s a payment platform often targeted by fraudsters and scammers.

PayPal does release a lot of consumer fraud prevention information, but it’s useful to keep up with common PayPal scams so you’re not a victim yourself.

Withdrawing funds to a bank account takes time

Finally, if you have a PayPal balance and want to withdraw it to your normal bank account you’ll need to either pay a fee for an instant withdrawal, or wait a few days for your money to arrive.

Move money internationally for low fees with Wise

If you’re sending money overseas, you could save if you choose Wise. Wise uses the mid-market exchange rate with no markup — just low, transparent fees. Payments are secure and deposited right into the recipient’s bank account for convenience.

And if you transact internationally often, or love to shop online with sellers based overseas, you could save even more with the Wise multi-currency account. Hold 40+ currencies, and spend around the world with your linked Wise card, with the real mid-market exchange rate every time.

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Bottomline: what’s the benefit of Paypal?

PayPal is a huge company for good reason. It’s secure, convenient, fast and widely accepted. If you’re shopping online domestically, it’s a great choice. It’s also a super handy way to send payments to friends and family in the US, as long as you pick a fee free funding method.

Where PayPal loses is whenever you’re transacting internationally. With high, confusing fees, it’s not your best choice. Instead, to access the real exchange rate with secure, intuitive services, check out Wise, and see how much you could save.


  1. PayPal US
  2. PayPal fees

Sources checked on 07.25.2022

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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