Transferring money overseas is vital for expats and businesses that rely on international staff and freelancers, but it can be a cumbersome, confusing and costly experience. In addition to the different fees that you might incur, you have to consider the constantly changing foreign exchange rates when sending money abroad.
PayPal is the most well-known method for transferring money internationally, but a number of alternatives are gaining popularity among individual users, businesses and organizations. One of the increasingly popular PayPal alternatives that are drawing in and engaging millions of satisfied customers is Payoneer. In this article we compare Payoneer and PayPal side-by-side, examining the key features and options as well as pros and cons to find out which one is the best service.
Article Summary – Who is the Winner:
For those that want the short answer to this question, here it is:
Both PayPal and Payoneer offer invaluable cross border payment solutions, and none of them is really recommended for the following reasons:
– Speed: Payoneer is widely used by freelancers for whom the speed of which they get paid is very important. That speaks on itself about the speed. Maybe Paypal is a tad quicker but taking into consideration the high fees, it seems that Payoneer is quick enough.
– Costs. Payoneer’s foreign exchange rates are superior to the ones offered by Paypal by a whole lot. Paypal is probably one of the most expensive ways you could ever send money abroad.
– Accessibility: Payoneer is super accessible. Whether you reside in India, Bangladesh, Ukraine, USA or somewhere else, you can (as long as you are a freelancer or a business) get the Payoneer card right away. Paypal is blocked in some countries like Pakistan.
– Convenience. With Payoneer MasterCard, you can access your funds at any time, at an ATM near you. With Paypal, you can withdraw money back to your bank account, or use it to make payments directly from your Paypal. Both are highly convenient.
The bottom line is that Paypal is expensive and a bit quicker, and Payoneer is slower but cheaper and more flexible, so it really depends on your individual circumstances whether you’d like to use one or the other. If you need to receive larger sums of money from abroad, there are better solutions like Currencies Direct.
We will go straight to the comparison and skip any introduction for each company, as you can read more about them in this Payoneer review or at the PayPal.com website.
Security is definitely one of the main concerns when receiving or transferring money internationally. Before you choose a service, you need to take proactive steps to ensure that your fund’s transfer is a safe and secure experience. That typically means observing the necessary cautions to avoid the scams that abound online.
Founded in 1998, PayPal is the leading worldwide provider of digital payments solutions. The online payment giant boasts of over 170 million active users (accounts) worldwide and processes around 13 million payments every day. Over $4 billion in yearly payments is processed on this platform, resulting in more billions in revenue. Businesses, professionals and organizations in 202 countries across the globe can access PayPal and transact in 25 currencies. It provides a secure payments platform for web-based, in-store, and mobile transactions. Previously a subsidiary of eBay, PayPal is now an independent, publicly traded company listed on the NASDAQ National Market after separating from its parent company.
Established in 2005 by the then-CEO Yuval Tal, Payoneer is an innovative global payments platform that facilitates cross-border e-commerce by connecting businesses, professionals and currencies from over 200 countries. It is a venture-backed company that has received funding from renowned venture financiers, such as Greylock Partners, Crossbar Capital, Carmel Ventures, Ping An, Wellington Management, and others. With board members like the former SWIFT CEO Lazaro Campos and former Visa president Hans Morris, Payoneer has proven to be a reliable provider of cross-border payments. The company offers online payments, refillable debit card service, and cross border transfers. While PayPal still dwarfs Payoneer in terms of size and product offerings, this platform is fast becoming the preferred option for businesses and individuals looking to take advantage of fast and seamless, cross-border payments. Payoneer grew 4,751% between 2007 and 2011 and was ranked No.34 on 2012 Deloitte’s Technology 2012 Fast 500 in North America. Over $500 million in yearly payments is processed on its platform.
Payoneer is a registered US company that is licensed as a Money Service Business (MSB). The company holds PCI Level-1 Data Security Standard certification and has partnerships with banking partners (MasterCard) and members of the FDIC. PayPal, on the other hand, is a fully-registered payment service company that is approved by the American SEC.
Payoneer aims to provide businesses with an easy and improved way to pay their employees or clients. Thousands of corporations and marketplaces, as well as affiliate programs and networks, rely on its mass payout services to make payments worldwide. These include leading companies such as Google, Upwork, Fiverr, Getty Images, Amazon, and many more. Many of its customers are freelancers who offer their services on various freelancing platforms like Upwork. Affiliates also make up a significant portion of its client base, and they are able to receive their commission payouts via international paper checks or Direct Deposit directly to their local bank account.
Companies looking to pay through the platform must apply to become a Payoneer Partner and go through the verification process. Similarly, payees need to apply for a MasterCard prepaid reloadable debit card. Payoneer requires documentation (ID, scanned images, etc.) from applicants in order to ensure the security of their customers and comply with financial security and payments regulations.
Like Payoneer, PayPal too requires prospective account holders to undergo a verification process. Those looking to open business accounts or personal accounts must provide evidence of their identity and provide relevant information to pass key security checks.
Both platforms provide a safe, reliable and secure way to send money – which means you don’t have to worry about losing your money when using them, whether you’re an individual or a business. They are reputable companies with a reputation to maintain, and there have never been any reports of users losing their funds unless they have violated their Terms and Conditions.
*After reading many complaints online, it seems that Paypal has grown a habit of freezing accounts without giving any explanation. Support replies with copy/paste answers. Be very careful when reading their Terms and Conditions docs.
2) Supported Countries
Both companies are able to provide their services to over 200 countries and territories so they both have coverage worldwide. Where ever there is an ATM or simply a bank, these companies can help you receive money. As simple as that!
3) Mobile Apps
Both Payoneer and PayPal have mobile apps for both iOS and Android. They allow account holders to access their accounts anywhere, anytime safely and securely, via their iOS and Android devices, allowing them to enjoy added convenience. Here is a brief overview of their features for you to compare.
Payoneer Mobile App
– Transactions and Payment History: Allows you to view detailed payment and transaction history.
– Currency Comparison: With this feature, you can view your account balance in any of the provided 20 currencies.
– Multilingual App: This app is available in over 19 languages.
– Refer a Friend: The app allows you to participate in their referral program.
PayPal Mobile App
– Shop. Allows you to see all nearby merchants that accept PayPal and you can use it to search for specific stores, as well.
– Wallet. By unlocking your wallet, you’re able to pay for goods that you’ve selected from affiliated stores.
– Transfer. You can use this button to send money anywhere, almost instantly.
– Activity Hub. This section allows you to keep track of the funds you’ve sent and received, including their origin.
– Settings. Use this button to control the settings of your account.
– Makes it easy to move and manage money.
– Allows you to use your friend’s emails and mobile numbers to send money.
– Fingerprint authentication (for Android).
– Ability to access the credit balance from the homescreen.
Both apps are great, but the PayPal app is more comprehensively designed and richer in terms of features because of its broader product and service offerings. Payoneer has fewer features but those that are incorporated are very easy to use and intuitive.
Payoneer: iOS and Android
PayPal: iOS and Android
Payoneer processing is much smoother and speedier than PayPal when it comes to global mass payouts and withdrawals. With PayPal, you have to manually initiate the withdrawal process every time you want cash in your bank account. The withdrawal process is relatively bothersome and lengthy too!
Payoneer’s Global Bank Transfer Service eliminates such hassles by allowing companies to send you payments in local currency directly to your bank account. It, therefore, offers a faster solution when receiving money from international companies, freelance sites and affiliate programs to your bank account. The entire process is automated, and you’ll be able to receive the transferred funds in your bank account within 24 hours.
PayPal, in contrast, takes about 3 business days to transfer payments to your bank account once you initiate the process. You can withdraw your money at any MasterCard branded ATM, or use your card to pay for goods or services, online or offline. You can also send that money to other recipients (via Virtual MasterCard), just like with PayPal. What’s more, their withdrawal limit is also higher (up to $5000 compared to PayPal’s $500 per day).
A lot of freelancers and affiliates receive money through PayPal. But many times, it takes a lot of time (up to 3 days) for the funds to arrive via wire or bank transfer. For these individuals, Payoneer offers a simpler, much quicker option with its MasterCard prepaid reloadable debit card, through which they can receive money instantly.
Cost is always a major issue when receiving or transferring money overseas. Payoneer’s is more beneficial to its partners when it comes to costs. These partners include companies like Upwork, Freelancer, 2Checkout, etc. Employees or freelancers working for these companies get to receive branded MasterCards, allowing them to receive money from these companies in a quick and efficient manner. Through Payoneer’s mass payouts service, these partners are able to transfer cash directly to their payees’ bank accounts in their local currency. This helps keep the cost of transferring money to multiple recipients low, and efficiency high.
As you might expect, there are fees for those receiving funds via Payoneer and PayPal.
Once you receive your Payoneer MasterCard, you’ll incur a one-time card activation fee which can range anywhere from $5 to $25 depending on your location (only if you decide to opt for the card). Payoneer will then ‘eat up’ up to 3.5% of your funds through currency conversion/cross border fee. As that weren’t enough, there’s a monthly account maintenance fee which ranges from $1 to $3. You’ll also incur an ATM withdrawal fee of around $3 every time you withdraw money. But, this is only applicable if you want to use the Payoneer MasterCard card.
If you choose to have your money sent directly to your bank account, the fees are way smaller and fewer. You only get charged with $3.00 for every transfer to your bank account.
PayPal recipients pay about 3.4% of the funds received. They also incur between 3.9%-4.9% fee through currency conversion. Their foreign exchange rates tend to be pretty bad.
The difference in charges incurred by recipients on these two platforms is pretty significant, with PayPal’s fees being clearly higher. The number of fees and charges can be significant when withdrawing large amounts.
Overall Conclusion on Payoneer VS PayPal
Both companies provide a reliable, safe and secure payment platform for businesses and professionals. But Payoneer is the best option if you work as a freelancer or if you’re a company that has many freelancers or offshore workers that you need to pay, and you want to save money in comparison to Paypal. But bear in mind – it may take a long time until you receive your Mastercard or get any response from the staff.
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