Difference Between XRP and PayPal (With Table)

XRP and PayPal are international payment systems that have major differences between them. However, they essentially liquidate assets from one place to another and remove the hassle of physical payments. A major advantage of them is that they get the job done relatively quickly. Regardless, there’s a lot of argument about which one is better.

XRP vs PayPal

The difference between XRP and PayPal is that XRP is a digital asset used for settling payments without the need of a central intermediary whereas PayPal is an online payment system that itself acts as a central intermediary for making international payments. Moreover, XRP settles bank transfers much quicker than the latter.

XRP is a native cryptocurrency for several products launched by the company Ripple. It is essentially a token that facilitates monetary transfers on the Ripple network. Converting between currencies becomes easier as XRP works as a common dinero. However, there is a certain fee that needs to be paid for such transfers.

PayPal is an online payment system operated by the company PayPal Holding, Inc. It is a payment processor that acts as an intermediary for carrying out online payments while charging a fee for it. However, the cost is much higher as compared to Ripple’s XRP and it takes much longer to process a bank transfer.

Comparison Table Between XRP and PayPal

Parameters of ComparisonXRPPayPal
LaunchXRP was launched in 2012.PayPal was founded in 1998.
MeaningIt is a digital asset that liquidates monetary transfers.It is an online payment system that processes monetary transfers.
NatureIt is a back-end solution.It is a front-end solution.
IntermediaryXRP does not require a central intermediary for exchanges.PayPal itself acts as the central intermediary for exchanges.
SpeedIt works faster than PayPal.Bank transfers take much more time to settle as compared to XRP.
CommissionXRP charges a lesser fee than the latter.PayPal costs more than the former while making transfers.

What is XRP?

XRP is a digital asset or cryptocurrency that was made for monetary transfers on the Ripple network. Currently, according to market capitalization, it ranks among the top five digital currencies across the world. The currency works on the XRP ledger which is a blockchain created by Jed McCaleb, Arthur Britto and David Schwartz.

The mining process of XRP is very different from other cryptos in the market. Normally, digital currencies open their ledgers to any person who can set up mining equipment and carry out the work. This creates security of transactions as ledger holders must verify the transactions themselves to be considered legitimate. This creates a decentralized environment.

On the other hand, mining at ripple is way more centralized. Even though any person can download the validation software, only a selected list of people can actually become validators. These people can select which transactions they want to verify, based on what they think is not legitimate. The users can opt-out of this list at any time they want.

This system allows the network to continue mining without the company even being involved. The validators renew their ledgers every 3-5 seconds, which is much quicker as compared to other cryptocurrency networks.

What is PayPal?

PayPal is an online payment system launched by the company PayPal Holdings, Inc. in 1998. It works as an alternative to physical money as it allows people to make transfers online. The system acts as a central intermediary and charges a certain amount of fee for each transaction. However, they happen much faster than they would through normal banks.

Earlier, the company was a security software provider for handheld devices. Then, it was called Confinity. However, it soon merged with X.com which was founded by Elon Musk. X.com provided various financial services and was renowned in the United States. Later on, the company put a stop to most of its internet banking services and focused only on PayPal.

Today, the system has more than 360 million active users in 200 countries. It lets a user make payments online with a bank account rather than a credit card. Moreover, the payment information is hidden from merchants in most cases. This adds to the level of security it offers.

PayPal has made costly wire transfers and checks almost obsolete. Users can now transfer money conveniently in a faster and safer way. However, PayPal is not as fast as XRP and is much costlier in most cases.

Main Differences Between XRP and PayPal

  1. XRP was launched in 2012 whereas PayPal was launched way before in 1998.
  2. XRP is a digital asset that liquidates monetary transfers whereas PayPal is an online payment system that processes monetary transfers.
  3. XRP is a back-end solution whereas PayPal is a front-end solution.
  4. XRP does not require a central intermediary for exchanges whereas PayPal itself acts as the central intermediary.
  5. XRP can settle transfers in seconds whereas PayPal takes more time to do so.
  6. XRP charges a minimal commission for transfers whereas PayPal charges much more than the former.


There are so many platforms and digital currencies that have emerged in the market nowadays. Keeping up with them can be difficult and often confusing. XRP and PayPal have been the centre of arguments recently, because of how fast the evolution of the financial industry is taking place. A major difference between the two is that XRP is a digital currency whereas PayPal is an online platform.

The primary motive of XRP was to come up with a better and faster way of making online transfers. It developed a method that made the role of central intermediaries obsolete. On the other hand, PayPal itself is a central intermediary between banks and users who want to make transactions.

It would not be surprising if digital currencies like XRP take over the industry and entirely remove the need for third-party brokers. XRP charges way less than the latter and even does the job quicker.


  1. https://arxiv.org/abs/1802.07242
  2. https://link.springer.com/chapter/10.1007/978-1-4302-0353-7_1
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