Table of Contents
- Are Payoneer and PayPal the Same?
- What are They? – Payoneer | PayPal
- What Do They Do? – Payoneer | PayPal
- Top Features – Payoneer | PayPal
- Making a Transfer – Payoneer | PayPal
- Are They Safe? – Payoneer | PayPal
- Fees – Payoneer | PayPal
- Cards – Payoneer | PayPal
- Limitations – Payoneer | PayPal
- Support – Payoneer | PayPal
If you’re looking for a payment processor, there are a lot of options online, but two brands stand out: Payoneer and PayPal.
How you pay people has a significant influence on company cash flow, including the timing of transfers, bank fees, global reach, and ease of use. When it comes to comparing Payoneer vs PayPal, each can be beneficial depending on your circumstance and needs.
In this article, we make a concise comparison between the two programs and answer the questions you need to know, like:
Are Payoneer and PayPal the Same?
Short answer: No
Although the names sound the same, Payoneer and PayPal are two very different programs. Payoneer is a financial services company that focuses on facilitating domestic and international payments. PayPal does that as well, but they also provide merchant accounts.
One may be more useful to you than the other. Read on to find out.
|Receiving Cost||Free from another Payoneer account or 1% via ACH and 3% via credit card.||2.7%-2.9% plus fixed fee.||6 international payment methods – cost varies|
|Sending Cost||Free from another Payoneer account or 1% via ACH, 2% to another bank account, and 3% via credit card.||2.7%-2.9% plus 30 cents per transaction.||6 international payment methods – cost varies|
|Speed||1-2 days||0-3 days||0-2 days|
|Debit Card||Mastercard ($29.95/yr)||Mastercard (free)||No|
|International Payments||Supports 150 local currencies and 200 countries.||Supports 26 local currencies and 200+ countries.||Pays to 196 countries.|
|Taxes||Tax agreement with the IRS||No tax validations||Built-in tax and VAT compliance|
|Mass Payments||Automated batch-pay up to 200.||PayPal Payouts up to 10,000||Global mass payables automation solution|
|Business Capital||Merchant cash advance up to $750,000 with Amazon and Walmart.||PayPal Business loan with amounts determined by time in business and revenue.||No|
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What is Payoneer?
Founded in 2005, Payoneer is a financial services brand that’s an online platform for domestic and international money transfers, digital payments, and providing customers with working capital.
Users can virtually track their account balance, payments, and full transaction history, including transaction fees and foreign currency amounts.
Located in New York, Payoneer supports over 200 countries with 150 local currencies. They are also a worldwide Member Service Provider of Mastercard.
Companies that use Payoneer include Airbnb, Google, Amazon, eBay, Rakuten, Adobe, Upwork, and Fiverr.
What Does Payoneer Do?
Payoneer performs the basics. The financial payment service gives you the ability to directly withdraw funds with a debit card, as well as send and receive funds domestically and internationally (including a local bank transfer).
The payment platform immediately connects companies with customers for e-commerce and online payments. Businesses can send direct payment requests or invoices to customers, who then have the option to pay online via a credit card or bank account.
Payoneer supports these currencies:
USD, EUR, GBP, CAD, AUD, JPY, and CNH.
What are Payoneer’s Top Features for a Business?
Customers can pay via credit card, ACH direct deposit, or from their own Payoneer account. You can also bill clients, request payments worldwide, and offer several simple and secure ways to pay online.
A business can receive payments from top marketplaces like iStock, Airbnb, Fiverr, Upwork, (and many more), in multiple currencies.
Withdraw money from any ATM in the world. Since withdrawal is a fixed fee, a Payoneer Mastercard owner pays the same rate, no matter where they bank.
Pay other vendors, freelancers, contractors, etc. using ACH bank debit, credit card, or a local bank transfer. You can also pay people per project or on a monthly, recurring basis (i.e. subscription).
Payoneer allows a business to pay EU and UK VAT from your account for free. This saves on costly conversion and transfer fees.
Companies can open their own local currency account in the United States, Europe, the UK, and more. Funds are easily transferred from your Payoneer account to your business bank account whenever needed.
Manage all the currencies you need with a multi-currency conversion service. You can also aggregate all ecommerce stores and view their payment activity in one convenient dashboard.
Payoneer will give you a merchant cash advance of up to $750,000 through Amazon and Walmart if you are a seller on the platform.
The program is called Capital Advance and is available at three levels, with each featuring larger amounts, longer settlement periods, and more offers to choose from.
Making a Transfer with Payoneer
Payoneer is a money transfer service that extends across borders worldwide. Your Payoneer account operates just like a traditional bank account. Once you provide customers with your Payoneer account information, money can be received and then deposited into your local bank account.
The “Make a Payment” service gives companies a quick way to pay contractors, freelancers, suppliers, and team members. Funds can be distributed directly from your Payoneer account to those professionals selected.
Unlike PayPal, recipients do not need to have a Payoneer account to complete the transaction (although they will be charged a small transfer fee). If they have an account, it’s free—even global payments.
Is Payoneer Safe?
In the past, Payoneer card users in Europe had a major issue with losing access to their funds. That’s because the Payoneer Mastercard was tied to a company called Wirecard, which was in trouble for fraud. Although funds were quickly restored, people have not forgotten this.
The good news is, starting in September 2020, the company announced they were moving to become their own licensed issuer called Payoneer Europe Limited.
Payoneer has been in operation since 2005 and is a fully regulated company registered as a US Money Service Business (MSB). They are also certified at a PCI Level 1 Data Security Standard, which means they must uphold a high standard of security on all networks and systems. The IT systems undergo comprehensive annual PCI audits across the board.
Every transaction you make on Payoneer is safeguarded by sophisticated firewalls and anti-hacking techniques. This helps to prevent fraud, identity theft, phishing encounters, and other types of cyberattacks.
You also receive an email notification every time a transaction or account change takes place on the Payoneer system.
Payoneer has fewer fees than PayPal, but some of them can come as a surprise. Here are the basic charges you will deal with:
Does Payoneer Charge a Monthly Fee?
The annual account fee for Payoneer is $29.95, but that is only charged after 12 months of inactivity. So, unless you have multiple accounts, most businesses will not have to worry about this.
All user-to-user transactions are free as long as they are drawn from the Payoneer account balance.
A company can send payment requests to clients with the option to pay via credit card and ACH bank debit (the US only). They can also pay via local bank transfer into your receiving accounts.
- 3% Credit Card (all currencies)
- 1% ACH Bank Debits
If both users have a Payoneer account, transfers are free. They are also free if you are using your bank account through Payoneer.
Paying customers directly from your Payoneer balance to their bank account via a bank transfer costs up to 2% of the transaction and 3% for a credit card.
A fixed fee of $1.50 also applies when you use a USD, EUR, or GBP balance to make a payment to a bank account that is:
• In the same currency
• In a country where the payment currency is the local currency
• In the same country as your Payoneer profile
Payoneer customers can make batch payments up to 200 bank accounts at once with a 2% fee.
Depending on the country, the platform adds a currency conversion charge of 2% to 2.75% for international transactions. You are subject to Mastercard’s exchange rates if you use it in a non-listed currency.
The prepaid Mastercard can be used as a debit card for any type of transaction, including e-commerce. Payments are sent to Payoneer Mastercard, rather than going into your online account (and then transferring to a local bank account).
Please note, there is a $29.99/year fee for the Payoneer Mastercard.
This means less of a hassle if you need to acquire funds quickly. The card can be used at any ATM in the world but has a maximum daily limit of $2,500. According to the fee structure, they will also charge you an average of 1% of the transaction in foreign exchange fees.
Online reviews state that the signup process can be lengthy with excessive paperwork. Some people complain of waiting over a month to receive their card. This can be inconvenient if you need to conduct immediate business.
However, the process is said to take a while because the Payoneer team personally reviews all applications. This is to ensure it has everything needed to allow the user to start sending and receiving payments.
Payoneer has a help desk with a customer support system and a collection of resources to build your knowledge base. The company has offices in multiple countries and is available via email, phone, and live chat.
What is PayPal?
PayPal was founded back in 1998, in Palo Alto, CA as an online payment system to safely send and receive money. The platform has revolutionized financial technology and the way people pay in a digital environment. This makes it one of the top recognized brands in payment processing.
The system is known for having a low barrier to entry, meaning it’s easy for any type of business to set up an account. All you need to do is link a bank account, debit card, or credit card. You can also use PayPal to make purchases online with participating stores.
PayPal integrates with a variety of business applications from accounting to CRMs and boasts 210 million active users in 200+ markets.
What Does PayPal Do?
PayPal is a combined payment gateway and payment processor. There are no fees to set up a business account, and you don’t even need to register to use the service. PayPal charges can be added to the recipient.
A business can accept payment for goods and services through PayPal, and also send global payments out. The system works as an end-to-end commerce partner for brands and marketplaces with the flexibility a business needs to stay competitive.
PayPal integrates with a variety of programs for small to medium businesses and enterprises that include risk management, accelerated growth, fraud protection, fundraising, e-commerce, and product spotlight.
What are PayPal’s Top Features for a Business?
PayPal Checkout enables a business to accept a range of payment types. Customers can use a single solution to pay on your site or in a mobile app. The system will intelligently present the most relevant payment type to customers, including credit/debit card, another PayPal account, or even as installments through PayPal Credit.
A brand can use PayPal Invoicing to send custom invoices to clients for free. The documents are tracked in the system, which alerts you when an invoice has been paid. Companies can also give customers a repeat way of checking out through recurring payment options (i.e. subscriptions).
In addition, a business can sell on social media through PayPal. Create shareable listings across different platforms that include photos, descriptions, and a direct payment link.
A business can pay contractors, vendors, freelancers, and other entities directly from their PayPal account. Transfers can also be scheduled through the main dashboard.
The PayPal Business Debit Mastercard allows you to use a PayPal account anywhere Mastercard is a payment method, without an annual fee or a credit check.
PayPal can also be used to send mass payments across the globe through PayPal Payouts. Funds are received by recipients in over 100 countries, using 24 different currencies.
PayPal has one of the largest payments datasets to help a business connect with qualified customers across the globe.
Rather than wait a day or two, the “Instant Transfer” feature allows you to move funds to an eligible bank account or debit card immediately for a small fee.
Fraud detection tools use machine learning to grow smarter with each transaction you make, protecting your account from existing and evolving threats.
The platform promotes chargeback protection by assuming liability for all eligible debit and credit card transactions. If one turns out to be fraudulent, PayPal will reimburse the chargeback fee and purchase amount.
PayPal also helps a business manage its funds with in-depth reporting, analytics, shipping, cash management tools, and more.
The PayPal Business Loan is a fixed-term loan that’s based on the full picture of your business. Check your eligibility in minutes, and if approved, funds can be deposited as quickly as the next business day. There are no late, processing, or early repayment fees.
PayPal also has plans to boost nonprofit fundraising. They can help you find the best way to connect with donors, anywhere, at any time.
Making a Transfer with PayPal
Anyone can send money through PayPal, even if you don’t have an account. There’s no need to share bank information, just to send money.
It’s always free to make a transfer as well. It can be done in these easy steps:
- Enter the seller’s email address.
- Enter the amount.
- Type in your payment data.
- Click “Transfer”
If you have a PayPal account, all transactions are tracked and accounted for in “account activity.” This makes it much easier when it’s time for taxes.
Is PayPal Safe?
PayPal is one of the oldest payment processing brands on the market, so they’ve had a lot of time to work out security kinks. All data communicated from your device to PayPal’s servers is secured with end-to-end encryption. This means financial information is never revealed to the recipient.
App users can also employ a second authorization factor to make every transaction safer. After enabling the SecurityKey feature, a temporary code is sent through SMS that must also be entered, in addition to the password.
PayPal has policies that are designed to address e-commerce fraud. The PayPal Purchase Protection policy ensures that a buyer is fully reimbursed if an online product purchased is significantly different than the description. If something doesn’t arrive, it can be reported through the platform, with a full refund issued.
If any unauthorized purchase is made on your PayPal account, you are not liable if it is reported within 60 days. PayPal security is tight, and the system offers in-depth protection for both buyers and sellers.
Although PayPal is incredibly open about its fees, expect to find pages and pages to sift through. Much like a credit card company, transparency can drown in an overload of data.
Does PayPal Have a Monthly Fee?
PayPal does not charge a monthly fee to keep an account open. Unlike Payoneer, you can have a $0 balance for a year straight, and the platform will not close your account.
There is no minimum balance required. If someone uses PayPal to send money to your account, there is also no fee associated with that.
It should be noted, transaction fees for PayPal can vary depending on the circumstance. It involves things like:
- Whether you were using your bank account or PayPal balance
- Whether you used a credit or debit card
- International transfers
The standard rate for receiving domestic transactions through PayPal is 3.49% + fixed fee. The PayPal Here solution is great for a business to get paid while on-the-go, or to bring the checkout experience directly to the customer.
When it comes to accepting payments, here are some rates to consider:
- Card Present Transactions – 2.70%
- Keyed Transactions – 3.50% + fixed fee
- PayPal Transactions (In-Store) – 2.70%
- QR code Transactions – 2.70%
- International – 1.50%
Sending payments from your PayPal account (or attached bank account) costs nothing. The fee is always waived. For card transactions, there is a charge of 2.90% + a fixed fee.
PayPal also charges currency conversion fees. It costs 2% of the total transaction amount to use PayPal Payouts for international transactions. This is not to exceed the maximum fee cap, which can range from $1-$20 in the United States.
The conversion rates for PayPal mostly run at 4% (with rare instances of 3%). This includes paying for goods/services in a currency other than what is listed. Sending money to be received in a currency different from what you paid will also incur fees.
The PayPal Cash Card gives a business the ability to shop online or in-store everywhere Mastercard is accepted. You can tap, insert, or swipe that card as a safer way to shop.
Withdraw cash worldwide, including over 32,000 fee-free ATMs. There is no monthly fee to retain the card and no minimum balance. It can sit in your wallet forever.
When it comes to withdrawal limits, PayPal has an initial $500 withdrawal limit for unverified accounts in the United States. This limit can be lifted by following these steps:
- Verify your bank account.
- Link and confirm your credit/debit card information.
- Provide your social security number.
PayPal payments have limitations for non-verified accounts. This includes a $10,000 cap on individual transactions. A payee can only send 5,000 payments/files through UI, and 15,000 using the PayPal Payouts API. This means, if a payment fails, it’s challenging to determine why.
Another issue with PayPal is that sometimes accounts are put on hold without warning. This can be detrimental to a small business and prove difficult for small business owners that are sending out large sums.
PayPal offers calls, live chat, or text for support. However, they mostly rely on the help center and pre-written resources to guide customers. The dedicated Resolution Center helps a business resolve transaction and account issues.
The Community and Message Centers are designed to find answers and join the conversation. View, send, and receive all communications in the PayPal Message Center to keep track of ongoing issues.
In the Dispute Management Center, buyers and sellers can resolve unavoidable disputes, and settle all transactions from the account dashboard.
Most of the PayPal support system is automated and the brand pushes toward self-help.
Payoneer vs PayPal: Which is Better for Business?
- Costs: Tie
- Security: PayPal
- Ease of Use: Payoneer
- Speed: PayPal
- Volume: Payoneer
- MasterCard: PayPal
- Support: Payoneer
- Loan: Tie
Who Will Save You More Money?
This is the ultimate question, but it boils down to what you are doing with the account.
If you are a small to medium business with a low volume of transactions, PayPal might be your best option.
However, the bigger your business becomes, the more apt you are to save money on Payoneer. That’s because PayPal fees include a percentage of the transaction and a fixed rate, while Payoneer only includes a percentage.
That means the higher volume of transactions, the more of a fixed rate you will pay through PayPal. In this case, Payoneer is the winner.
If you’re making international payments, Payoneer has slightly higher exchange rates but again, if you are making a high volume of transactions, it still may be the better platform.
Your best bet is to sit down and calculate how many global transactions you expect to be made through the business (in a given year), in order to choose the best platform by price.
Who is More Secure?
PayPal has a larger network and has been around much longer than Payoneer. Both use end-to-end encryption and are fully regulated as a US Money Service Business (MSB). Payoneer is also certified at a PCI Level 1 Data Security Standard.
However, Payoneer has had issues with fraud on its card in the past. Additionally, PayPal extends the security beyond encryption, offering companies seller and chargeback protection.
If fraud occurs on any PayPal account, funds are returned immediately. This hasn’t always been the case for Payoneer, where it took time to clear things up.
Therefore, due to factors like age and incidences, PayPal is the winner.
Which System is Easier to Use?
When it comes to branding, payees register on the Payoneer network and are subject to its marketing. This includes email, which can be bothersome. However, when compared to PayPal, the system still may be easier to use.
The more PayPal adds to its platform, the more complicated things can get. Additionally, while Payoneer plays well with others, PayPal does not. You can connect any Payoneer account to PayPal, but the platform does not extend the same courtesy.
That means, with a Payoneer account, you can use both platforms together. However, if you only have a PayPal account, they will not work with Payoneer. This can prove an obstacle when it comes to running an e-commerce site.
Ultimately, Payoneer is a simpler platform that offers more flexibility on integrations. This makes it the winner for ease of use.
Who is Faster?
Transfer speeds with PayPal occur within 1-2 business days, while Payoneer transactions occur within 0-3 business days. PayPal is the winner here, plain and simple. You can even get instant access to funds for an extra fee.
Which is Better for Mass Payments?
When it comes to making mass payments, the PayPal Payouts feature allows a business to pay up to 10,000 people at once, while a Payoneer account lets payers batch-pay up to 200 payments.
However, the currencies and markets are much more limited for PayPal. That means some of your customers or vendors may not be eligible for mass payouts, to begin with.
It should also be noted that Payoneer mass payments are cheaper than PayPal. Payoneer caters to companies that pay funds of at least $50,000 to a large number of international beneficiaries each month.
Since Payoneer is the easier choice for a cross-border payment solution (in more markets and currencies) with fewer fees, it’s the winner for mass payments.
Who Has the Better Card?
If you plan on using the prepaid card often, PayPal is your winner. While PayPal is free, the Payoneer Mastercard will cost you $29.99/year.
Additionally, the daily limits differ. The PayPal card has a daily limit of $500, unless your account is verified. For the Payoneer card, there is a daily limit of $2,500. According to the Payoneer fee structure, there is also an average charge of 1% of the transaction in foreign exchange fees.
Who Has Better Customer Service?
Although PayPal is a larger company, most online reviews praise the Payoneer support team more. Their multilingual customer support is available 24/7 through phone, chat, or email.
On the other hand, PayPal has reached the point where a large part of its help center and support is self-service. If there are issues, you can expect some delays with customer service. As is often the case when companies grow, their support teams get harder to reach.
In this case, Payoneer is the winner for real-life support and stellar customer service.
Who Has the Better Loan?
It depends on what your business does. If you are a seller on Amazon or Walmart, Payoneer definitely offers the best options for working capital, as they do this through both of those major conglomerates. You can receive up to $750,000 with the click of a button.
The PayPal Business loan has requirements that might edge out smaller businesses. You must be in business for 9 months or more, with annual revenue of $33.3K. If you’re just starting out, this may not be the best option, but it is certainly a leg up for mid-sized businesses looking to grow.
Choosing A Smart Alternative to Payoneer & PayPal
Another option to Payoneer and PayPal is the payables automation solution, Tipalti. The platform makes it easy for finance departments to streamline operations and optimize the entire payment process.
The system partners with PayPal and has transparent pricing, with attentive customer support. Tipalti is smaller than both platforms, and thus has more time to cater to unique organizational needs.
It offers a variety of competitive features that include:
- Make mass payments to suppliers and partners in any country.
- Eliminate up to 80% of the AP workload.
- Assist with tax and regulatory compliance.
- Automate the entire payment management process from onboarding, to invoice processing and reconciliation.
- Cut costs and waste.
Reviewers rave about the customer service Tipalti offers. This makes it a great choice on the top list of payment processors.
When it comes to Payoneer vs PayPal, the platform you choose really depends on what you want to do. PayPal has a lot more tools, so a business can get creative, but that also means you need to keep track of more costs as you add things on.
Payoneer’s services are often preferred over PayPal as a solution for international money transfers and mass payments. Unless you need a payment gateway. In this case, PayPal is your answer.
Ultimately, your business needs should dictate the type of payment solutions service you choose. Factors that go into it include price, convenience, and ease of use. Careful research and a thorough understanding of your business structure ensures the solution you purchase will drive growth and lead to future success.