Wise vs PayPal: which is better in Indonesia?

Choosing the right payment solution is crucial for businesses, freelancers, and expats in Indonesia to make efficient, affordable cross-border payments. Wise and PayPal are two of the most commonly used services for these transactions, each with its own perks and downsides.

This article provides a comprehensive comparison of the two services and their suitability for users in Indonesia.

Overview of Wise

Wise is a digital payment platform widely used for international money transfer via multi-currency accounts. Since its inception in 2011, it has grown into one of the leading cross-border payment services worldwide, supporting about 40 currencies. The platform is big on transparency and low transaction costs with currency conversion at mid-market rates.

Overview of PayPal

PayPal has been around for much longer (since 1998) and remains one of the largest digital payment platforms, especially when it comes to online shopping and peer-to-peer transfers. It operates in over 200 countries, including Indonesia. Users can create international bank accounts to send, receive, and spend money globally. Thanks to its reliability over the years, buyer protection features, and integration with e-commerce platforms such as eBay and Shopify, PayPal is widely accepted both within and outside Indonesia.

Also read: FX-saving strategies every freelancer in Indonesia should know

Comparing Wise and PayPal

To properly compare both payment services, we will consider the account setup, fee structure, exchange rates, transfer speeds, supported currencies, customer support, and security.

Account setup and availability in Indonesia

Setting up both Wise and PayPal accounts in Indonesia is straightforward, but there are key differences:

• Wise: You can register with an Indonesian ID, local address, and bank account. Wise also offers a multi-currency account that supports USD, EUR, GBP, and other major currencies.
• PayPal: Indonesians can open personal or business accounts using an email address and link a local bank account for withdrawals. However, PayPal does not offer a full multi-currency balance feature for all Indonesian users, so funds are often automatically converted to IDR.

Wise offers more flexibility for holding and managing multiple currencies, while PayPal is better if you don’t intend to hold funds in other currencies.

Exchange rates and fees

One of the biggest differences between Wise and PayPal lies in how they handle exchange rates and fees.

• Wise: Wise uses the mid-market rate without hidden markups. The transaction fees are transparent and shown upfront before completing a transfer. These fees depend on the currency and payment method, but are generally low.
• PayPal: PayPal applies a currency conversion markup of around 3% above the mid-market rate. It also charges a transaction fee for international transfers, higher than Wise’s. (usually 2–5%).. Receiving money for freelance work or digital services may attract additional service fees.

Overall, Wise tends to have lower, more predictable fees for international transfers to or from Indonesia, while PayPal might be cheaper for simple domestic payments.

Also read: Indonesia for remote workers: tips, connectivity, and community

Speed and convenience

Speed is essential for urgent payments, and both platforms perform well, but in different ways.

• Wise: Many transfers arrive the same day, depending on the payment route.
• PayPal: Payments between PayPal accounts are instant, but withdrawing to an Indonesian bank may take 3–5 business days.

Wise is often faster for direct bank transfers, while PayPal wins for instant wallet-to-wallet transfers.

Supported currencies and payment methods

Both services have broad coverage, giving a range of flexibility.

• Wise: Supports over 40 currencies, including USD, EUR, GBP, AUD, SGD, and IDR. Users can send, receive, and hold money in multiple currencies.
• PayPal: Supports over 25 currencies but automatically converts funds to IDR for most Indonesian users, which can lead to additional conversion costs.

Wise provides more flexibility for managing multiple currencies, while PayPal’s automatic conversions make it less ideal for holding foreign funds.

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Security and reliability

Both Wise and PayPal are regulated financial service providers with strong security systems:

• Wise: Licensed by global financial authorities, including the UK’s Financial Conduct Authority (FCA). It uses advanced encryption and verification processes to protect user funds.
• PayPal: Also highly regulated and widely trusted. It provides buyer and seller protection, which is particularly useful for e-commerce users.

Wise and PayPal are safe and secure, though PayPal’s buyer protection gives it some added advantage for business transactions.

Customer support and accessibility

Access to prompt and helpful customer support is essential whenever there is a dispute.

• Wise: Offers live chat and email support with quick response times. Its mobile app is user-friendly and provides full transparency for all transactions.
• PayPal: Has a larger customer support network but can be slower to resolve disputes, especially regarding account limitations.

Wise provides more direct and efficient support, while PayPal’s larger size sometimes makes dispute resolution slower.

Read also: How freelancers in Indonesia can access global gigs and get paid

Wise vs PayPal: which is better in Indonesia?

Both Wise and PayPal serve different purposes in Indonesia’s growing remote economy.

• Wise is best for professionals who value transparency, lower fees, and control over exchange rates. It’s ideal for freelancers, remote workers, and small businesses that make regular cross-border transactions.
• PayPal remains convenient for those who rely on global marketplaces or prefer instant transfers within its ecosystem, despite the higher fees.

Focusing on payment solutions like Wise and PayPal often means overlooking efficient alternatives like Grey. Grey is a cross-border payment solution tailored to freelancers, digital nomads, expats, businesses, frequent travellers, and international students. With robust security features and swift payment processing, users can manage USD, GBP, and EUR on a single platform and withdraw IDR into their local bank accounts. Grey is widely renowned for its transparent fee structure, low fees, and competitive exchange rates when withdrawing to your local account. Setting up a Grey account is pretty straightforward.

Get started on Grey today for efficient international transactions in Indonesia.

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