That’s not all entirely true, but I can’t blame you for thinking it is due to their impressive marketing. I just tested it… I changed $100 from my Paypal account to GBP (using their currency conversion) and I got £78.22.
Transferwise is telling me that for the same amount, at the same time, they would give me £77.91. Not a massive difference, but it’s definitely worse than Paypal.
The reason Transferwise sounds better is all a bit of smoke and mirrors. They use the mid-market rate and Paypal use the wholesale rate. As a result, Paypal’s fees are higher, but they’re based on a better starting rate… so you end up getting about the same. Transferwise just focus on the lower fees to make it seem like you’re getting a better deal.
Although, if you’re in a country where Paypal charges you to withdraw the money to your bank, then you might end up getting a slightly better deal with Transferwise, so it does depend on individual circumstances. Just so you know!