No matter the size of your business, choosing the right payment processor is crucial for continued success. Comparing Payoneer vs Square is difficult because both are top brands with highly competitive features.
Payoneer specializes in making global payments from its customers to freelancers and online sellers, including e-commerce companies. Square offers transaction processing with U.S. and international credit cards, debit cards, and invoicing for retail point-of-sale, e-commerce, and freelancers.
In this article, we’ll take a closer look at both programs, top features, pricing, global payments, and how they can meet your company’s needs right now.
What is Payoneer?
Founded in 2005, Payoneer is a financial services brand that’s located in New York. The online platform facilitates domestic and international money transfers, enables digital payments, and provides companies with working capital.
Payoneer is a worldwide member service provider of Mastercard in over 200 countries with 150 local currencies. The company has 21 offices around the globe and supports more than 35 languages. 5 million+ customers around the world use Payoneer every day to process payments.
Unlike POS systems, Payoneer does not let you directly charge people or businesses. Instead, you will need to request payment through the platform and wait for the customer to initiate payment.
Companies that use Payoneer include Amazon, Airbnb, Google, eBay, Rakuten, Adobe, Upwork, and Fiverr.
What Does Payoneer Do?
Payoneer is a payment platform the performs the basics. Users can virtually track account balance, payments, and full history, including transaction fees and foreign currency amounts.
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).
Payoneer is also a payment platform that enables online payments for ecommerce. 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 works with the following currencies:
USD, EUR, GBP, CAD, JPY, AUD, and CNH.
Pros of Payoneer
- Superb customer support with accounting integration and ecommerce capabilities.
- Transfers are free between Payoneer account holders, with over 4,000 active users worldwide.
- It works much like a PayPal account and is a great transfer service for online sellers.
- Reasonable exchange rates that are similar or better than other platforms.
- Simplified setup that asks for fewer user details than other systems.
Cons of Payoneer
- The software lacks dedicated account managers for smaller transfers and accounts.
- Payoneer is not established with a bank and does not hold funds.
- The mobile app can be improved by adding more functions like bank accounts, a knowledge base, and better analytics.
What is Square?
Launched in 2010, Square is a payments platform that helps millions of sellers run their business from point of sale (POS) solutions to secure credit card processing. The software facilitates money transfers of sales/service revenue amounts and offers fast payment processing for ecommerce and retail customers.
Square Payments includes both hardware and software, with the basic Square reader offered for free with subscription. The app is known for ease of use and can be downloaded on an iPhone, Android, or iPad.
The San Francisco-based online payments service is a SaaS with customizable ecommerce website templates for accepting customer payments. Square also provides invoice templates as part of its invoicing and online payments service software.
What Does Square Do?
Square allows a business to receive payments on the next business day for free (as Square payouts). When a card is swiped through a Square reader, the technology transmits the bank data to the card reader, which it sends to the Square software. The information is then passed on to the acquiring bank.
The Square magstripe reader plugs into the headset jack of an iOS or Android device, so you can take credit card payments anywhere, at any time.
Pros of Square
- Helps sellers coordinate the various retail sales and e-commerce sales channels.
- Transfer speed is faster than Payoneer and free for next business day.
- Allows you to create invoices with the customer name, payment amount, due date, etc.
- The system is simple to use with a small learning curve.
- Free chip card reader with no up-front costs for small business owners.
Cons of Square
- Customer support could improve the response and resolution time, particularly with the payment gateway.
- The platform doesn’t handle cross-border payments for transferring revenue earnings to owners.
- The cost is structured for startups and, according to user reviews, can get costly as you scale.
| Payoneer | Square | Tipalti | |
|---|---|---|---|
| Receiving Cost | It’s free from another Payoneer account or 1% via ACH and 3% via credit card. | 2.6% + 10¢ for contactless payments, swiped or inserted chip cards, and magstripe cards. Manually keyed-in, processed using Card on File, or manually entered using Virtual Terminal have a 3.5% + 15¢ fee. | 50+ international payment methods – cost varies. |
| Sending Cost | It’s free from another Payoneer account or 1% via ACH, 2% to another bank account, and 3% via credit card. | Next-business-day: free. Instant and same-day: 1.5% of the transfer amount. | 50+ international payment methods – cost varies. |
| Speed | 1-2 days | 1-2 days | 0-2 days |
| Mobile App | Yes | Yes | No |
| Currencies | 150 | 5 | 120 |
| Debit Card | Mastercard ($29.95/yr) | Mastercard(free) | No |
| International Payments | Payoneer Local Currency Accounts in 200 countries. | US, Canada, Japan, Australia, and the United Kingdom. | Pays to 196 countries. |
| Taxes | Has a tax agreement with the IRS. | Item-level tax rates for POS systems. | There is built-in tax and VAT compliance. |
| Mass Payments | Automated batch-pay up to 200 at a time. | Yes | Global mass payables automation solution. |
| Business Capital | Merchant cash advance through Amazon and Walmart, up to $750,000. | Square Capital | Not yet |
Payoneer vs Square Fees
When comparing fees for two similar systems, it’s important to look at a few different aspects of the pricing structures. Here is a quick look at costs for Square vs Payoneer:
Admin Fees
Payoneer only has an account fee if you do not use it for 12 months. So, unless you have multiple accounts, most businesses will not have to worry about this. Additionally, all user-to-user transactions are free as long as they are drawn from the Payoneer account balance.
There is no monthly fee for using the Square POS app. Instead, you pay different transaction fees depending on the payment method or payment options. You may also have to afford a one-time cost for hardware.
Getting Paid
Payoneer allows clients to pay via credit card and ACH bank debit (the US only). They can also pay via local bank transfer into your receiving accounts. The cost is as follows:
- 1% ACH bank debits
- 3% credit card (all currencies)
Transfers are free if you’re using a bank account through Payoneer.
When it comes to getting paid, Square charges depending on how people checkout. Common fees are:
- In-person purchases: 2.6% + $0.10
- Online processing fee: 2.9% + $0.30
- Manually keyed-in: 3.5% + $0.15
Paying Out
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. Customers can make up to 200 batch payments with a 2% fee.
Paying out with Square is free for the next business day. If you want a payout with an instant or same-day transfer, the cost is 1.5% of the transaction.
International Fees
Depending on the country, Payoneer adds a currency conversion charge of 2% – 2.75% for international transactions. You are also subject to exchange rates if you use Mastercard in a non-listed currency.
Square will only accept currencies from these countries:
- US, Canada, Japan, Australia, and the United Kingdom
When paying, customers will have to bear the conversion costs with their bank. The Square platform works with most internationally-issued cards bearing a Visa, MasterCard, AMEX, Discover, JCB, or UnionPay logo.
Pre-paid Card
Payoneer charges a $29.99 annual fee to use the prepaid Mastercard, which can be used for any type of transaction, including e-commerce. Payments are sent to the card, rather than going into your online account (and then transferring to a local bank).
The Payoneer Mastercard can be used at any ATM in the world, but has a maximum daily limit of $2,500. There is also an average fee of 1% of the transaction for foreign exchange costs.
The Square debit card is free to order and has no monthly fees, minimum balance fees, overdraft fees, or any other recurring fees. Payment processing fees are separate and still apply.
Conclusion
Payoneer and Square win in their niche markets and it’s a solid tie overall. Choosing one may simply come down to your business needs.
There are a multitude of practical points to consider when comparing Payoneer vs Square. The systems have many similarities. Both offer mass payments and merchant accounts are free to open. They both service online stores and facilitate ecommerce payments.
When it comes to differences, Square is faster and cheaper than Payoneer. It also excels at point-of-sale transactions. However, Payoneer offers cross-border payments, while Square doesn’t for payment transfers of earned revenue (which are payouts).
Square’s offerings are also much broader, and include e-commerce websites for small businesses, invoicing, and mobile card readers used for sales pay-ins.
While Payoneer is generally used online, Square is more suitable for brick-and-mortar operations.
Still can’t decide? Consider another alternative. Tipalti.
The global mass payment solution automates the entire payables process, saving time by up to 80%. It effortlessly provides supplier self-service onboarding, validation, tax compliance, fraud controls, and a reduction in erroneous payments. It’s the perfect alternative to both Payoneer and Square.
