The Pros and Cons of Using Payoneer Vs. Paypal for Payments
Whether you’re growing a small business or starting a remote team, making payments to international freelancers can be a costly process. How you pay people has a huge influence on timing, fees, and ease of use. When it comes to making global payments, you need a financial services company that will meet the organization’s needs.
Here we compare Payoneer vs PayPal and consider which one of these payment options might work best for you.
Who is Payoneer?
Founded in 2005, Payoneer is a financial services brand that’s a platform for online money transfers, digital payments, and providing customers with working capital. They are also a worldwide Member Service Provider of Mastercard. Companies that use Payoneer include Airbnb, Google, and Fiverr.
Payoneer supports over 200 countries with 150 local currencies. 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. Payoneer fees are a flat $3 per transfer and free to receive. If you live in the United States, you can also make payments using an e-check. The Payoneer Billing Service allows you to pay other Payoneer customers with ease. They even have a mobile app.
The prepaid Mastercard (not Visa) the brand issues facilitates transferring funds. It can be used as a debit card for any type of transaction, including e-commerce. Payments can be sent straight to Payoneer Mastercard, rather than going into your online account (and then transferring to a local bank account). 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.
Payoneer has an extensive help desk with a strong customer support system. There is also a large collection of resources if you need to build your knowledgebase. The company has offices in multiple countries and is available via email, phone, and live chat.
When comparing PayPal vs Payoneer, rates and exchange fees are generally higher. They also have a minimum monthly payment requirement of $20,000. Additionally, they only allow transfers to other Payoneer accounts. There is no third party involvement. This can present a big problem if you have a customer that doesn’t want to work with the brand. You could lose the job. Private clients can only withdraw money on the platform, they can never transfer money.
Depending on the country, the platform adds a currency conversion charge of 2% to 2.75%. You are subject to Mastercard‘s exchange rates if you use it in a non-listed currency. Payoneer, unlike most other money transfer services, charges an annual fee to use the Mastercard. The reviews online complain the signup process is lengthy for Payoneer (lots of paperwork) and some people wait over a month to get their card. Not very convenient if you need to do business right away.
Who is Paypal?
Most people know who PayPal is but just for fun, the company has been around for decades and has revolutionized financial technology and how people bank online. They were pretty much the first to start online banking systems back in the late 90s after seeking an electronic alternative to paper waste. This platform is typically a good option simply for the ease of use and familiarity. They support 200 countries and 25 currencies.
PayPal is the most recognized brand in payment systems. They also integrate with many accounting and CRM platforms for automated payment processing. Since the company has been around for so long, the offer a variety of services. This includes a Mastercard like Payoneer. Except, PayPal doesn’t charge an annual maintenance fee to use it.
By 2017, there were over 200 million active users in the PayPal system. Part of the brand’s strength lies in their age. They have reached so many companies and brands by now, that having a PayPal Mastercard is just like using a bank.
You don’t need to register an account to use PayPal. Anyone can send money and then choose who foots the bill for the fees, which is another convenient option. However, if you are going to use PayPal often, having an account is wise. Even if it’s just for the auto-fill on all your shopping sites.
The PayPal Payouts feature allows you to pay up to 10,000 people at once with no monthly fees. This type of mass payout on a payment site is unparalleled.
PayPal may seem inexpensive from the outside, but they have a lot of fees that can really add up. Additionally, depending on the country and receiver, there may be fees incurred from the bank. For example, PayPal generally charges a $3 ATM fee, but then you could also rack one up from the bank. Additionally, in some countries, a high currency conversion charge of 2% to 2.75% applies.
Another issue with PayPal is that at times, they will hold accounts without warning. This can be detrimental for small business owners and disastrous when sending out large sums. For example, what if the payment was for a bid on a home? It’s a real issue they don’t plan on fixing anytime soon.
Transaction fees for PayPal can vary depending on circumstance. This includes things like:
- Whether you were using your bank account or PayPal balance
- Whether you used a credit or debit card
- International transfers
The transfer fees can range from 0.3% to 7.4%. It should be noted that PayPal also charges currency conversion fees. If you are a customer in the USA, international sales have a 4.4% transaction fee, plus an additional fee based on the currency that is received. PayPal is generally transparent with rates, but fails to list its FX fees for sending funds from your account to someone else.
Ultimately, your business needs should dictate the type of service you choose. Factors that go into it include price, convenience, and ease of use.