The gig economy is growing by the hour. Roughly there're over 100 million freelancers, with remote workers making up the
overwhelming majority. Naturally, online transactions are the most convenient
way for them to get paid. Payoneer vs PayPal is, therefore, an
inevitable dilemma.
So, which platform is better for making payments and
withdrawing funds? Is the difference in transaction fees really that
significant? What other services do these platforms provide?
Let’s see which of these two online transaction solutions
has more to offer!
A few years ago, sending and receding money from overseas was a hustle. You had to deal with bank wire transfers that would charge you exorbitant exchange rates and fees.
Today receiving and sending money even from the remotest
part of the continent is a breeze – provided the sender or the receiver has an
internet connection.
Thanks to online payment processing services such as PayPal
and Payoneer that give you easy and cost-effective means to make local and
international payments.
While there are other digital payment services such as
Skrill, Neteller, Stripe, and Transferwise, PayPal and Payoneer are the two
most popular online payment processors with the largest market share.
Apart from that, these two platforms provide services to
over 200 countries across the globe.
You are now probably asking yourself, which payment processing
service is better between the two? Well, in this article, we will examine
different parameters that differentiate PayPal from Payoneer and Payoneer from
PayPal.
But before we dive into the details, let’s have a brief
overview of PayPal and Payoneer.
A Brief Overview of PayPal
Founded in 1998, then known as Confinity, PayPal is an
American E-Commerce company that specializes in digital money transfers. In
2000, Confinity joined hands with X.com to form PayPal.
In 2002, the company had its initial public offering. Later
that year, after watching the company become the premier choice for online
shoppers, vendors, affiliate bloggers, and freelancers, eBay, an internet
auction company, acquired PayPal at the cost of $1.5 billion.
In 2015, eBay spun off PayPal into a separate
publicly-traded company. Since its inception, the company has allowed users to
exchange money between accounts and make payments online in a secure platform.
Currently, PayPal allows users to link their accounts to
their own bank accounts, making it easy and more efficient to transfer payments
in various currencies compared to checks or money orders. It supports over 20
currencies and is available in more than 200 countries.
Following a sophisticated series of security advancements,
the company has grown to become the first choice payment processing platform
due to its superior anti-hacking and anti-phishing measures.
For example, users can request a refund if they’ve been
cheated. What’s more, the company takes security very
seriously. Therefore, whenever they detect a suspicious transaction, they can
deactivate the account pending further investigation.
A Brief Overview of Payoneer
Payoneer is a digital payment services company with
headquarters in New York, United States. The company was founded by an Israeli
businessman, Yuval Tal in 2005, and has since grown to be one of the most
preferred online financial services company by businesses, affiliate marketers,
and freelancers.
The company offers services to over 200 countries and
territories and allows transactions in over 150 different currencies.
The company works by offering its partner companies and
clients with prepaid MasterCard cards, which are shipped to their respective
owners in different countries, including businesses, freelancers and affiliate
marketers.
Once you receive the card, you’ll be required to activate it
in order to receive payments. There are two ways to withdraw funds via
Payoneer.
The first method is through the prepaid MasterCard. With the
prepaid MasterCard, you do not need to have a bank account.
So once your funds are sent, you can withdraw them within 24
hours in just the same way you would use your regular credit card. You can also
use the card to shop online.
The second method is by linking your Payoneer account with
your local bank account details. Once the funds are in your Payoneer account
you can transfer them to your bank account.
This will allow you to withdraw the money in your local
currency and with low fees. Just like the MasterCard method, the funds should
be available in your local account within 24 hours.
Some common companies that use Payoneer to send mass
payments include Amazon, Upwork, Google, and Airbnb. One reason that makes
Payoneer a preferred choice by most businesses is its simple integration with
any website.
PayPal vs Payoneer
Setting up a PayPal account
If you do not already have a PayPal account,
and you would like to have one, follow the following steps. Note that setting
up a PayPal account is free and should only take you a few minutes. You might
also want to have a bank account to link with your PayPal account.
Step #1: Go to the PayPal homepage.
Step #2: On the top right corner, click on Sign
Up.
Step #3: On the following screen, select whether
you want to create a business or personal account. Then click continue.
Step #4: On the next screen, enter your details such
as your Country, Names, Email address, and password. Once you are done click or
tap on Next.
Step #5: On the next page, you’ll be required to
provide your identification number, your address, date of birth, and your
mobile number. Note that this information is mandatory and must be provided for
your account to be created.
Step #6: Once you are done click on Agree
and Create Account. You can choose whether you want to start shopping,
sending or receiving payments online via PayPal.
Step #7: You can now choose to link your card or
link it later (this step is optional). However, if you plan to receive or
transfer money to your bank account you’ll need to add this important detail.
Note that for your card to be verified, it will take at least three days.
Setting up a Payoneer account
Just like PayPal, creating a Payoneer account is free. So if
you do not already have the account, here are a few steps to follow and get
your account in no time.
Step #1: Visit the Payoneer homepage.
Step #2: On the top right-hand corner, click
on Register.
Step #3: On the next page, enter your name and email address then click “Next.”
Step #4: On the page that follows, you’ll be required to enter your address and mobile number. Then click “Next” once you are done.
Step #5: On the next sign up page, enter your
security details. This includes the password that you will use with the account
and your national identification number, and answer a security question.
Note that you can also use your passport or driver’s license
number in place of your ID. Click Next.
Step #6: At this stage, you are almost done. The only thing you’ll be required to do is enter your bank details, including your local currency. Click submit for your account to be reviewed.
The review process takes a few business days. Once approved, you’ll get a confirmation email in your email address and you can now start receiving payments in your account. You can then apply for your prepaid MasterCard to enable you to withdraw your funds.
Now let’s learn how both PayPal and Payoneer compare in
terms of features and other parameters.
Payoneer vs PayPal Side-by-Side Comparison
Let’s now contrast some of the platforms’ main features to
help you decide which one is best for your needs.
| Payoneer | PayPal | |
|---|---|---|
| Active users | 5 million | 400 million |
| Debit card | Mastercard | Mastercard |
| Mobile app | iOS, Android | iOS, Android |
| Support | Live chat, phone line, live assistance, email | Live chat, phone line, live assistance, email |
| Countries supported | Over 150 | Over 200 |
| Currencies supported (for transfer) | USD, EUR, GBP, CAD, AUD, JPY, and CNH | AUD, BRL, CAD, CNY. CZK, DKK, EUR, HKD, HUF, ILS, JPY, MYR, MXN, TWD, NZD, NOK, PHP, PLN, GBP, RUB, SGD, SEK, CHF, THB, USD |
| Integrations | Direct integration with your site, store, or app | Direct integration with your site, store, or app |
PayPal vs. Payoneer – An In-depth Comparison
While both services excel in certain scenarios, they also do
have their pitfalls. Therefore, if you are going to choose one over the other,
it’s vital that you evaluate them on a case-by-case basis. Let’s look at the
different scenarios.
Fees and Exchange Rates
When it comes to fees or exchange rates both services differ to a huge extent. Your choice here will primarily be based on your personal circumstance and type of transaction you want to make.
With PayPal, the transaction fees are dependent on the
country in which your account is signed up. In the United States, for example,
PayPal charges zero fees to transfer funds from your PayPal account. However,
if you wish to pay with your credit card, debit card, or PayPal credit, a fee
of 2.9% + $0.30 applies for each transaction you make.
For international transactions (that is, transactions made
from the US to another country), fees may vary depending on the destination,
payment method used, and the amount you are sending.
For example, if you are sending from your PayPal account
balance or the bank account linked to your account, a transaction fee of 5%
will apply to the sent amount per transaction. This means you’ll pay anywhere
between $0.99 and $4.99.
If you choose to transact with your debit card, credit card,
or PayPal Credit, you’ll be slapped with an additional fee of 2.9% on top of
the transaction fee plus a fixed fee based on currency. Remember you’ll also
have to incur a 2.5% currency conversion fee.
Payoneer, on the other hand, does not charge any fees to
send or receive money from other Payoneer customers. However, if you receive
funds into your local account in USD, AUD, CAD, GBP, EUR, and MXN a fee of
between 0-1% for USD but it will vary from which country the funds originate from.
If you choose to receive funds directly from your customers
via debit or credit card, you’ll have to incur a 3% fee.
If you use eCheck in USD, you’ll have to pay a 1% fee. Fees
for money sent via marketplaces and networks such as Upwork, Airbnb, Fiverr and
any other company via Payoneer may vary. Currency conversion rates with
Payoneer stand at 2% over the mid-market exchange rate.
Security
Whenever you want to transact online, the first thing that
comes to your mind is the security of your funds. You always want to ensure
that both your personal information and funds are safe and secure.
Fortunately, both PayPal and Payoneer rely on high
encryption levels to ensure the safety of their clients’ funds and information.
This means that no third party can manipulate or see any undertakings in your
account.
Payoneer, for example, ensures that each transaction is
strongly protected by strong encryption to
ensure that each data is unreadable and is protected by secured firewalls.
They also monitor each transaction to ensure that there is
no identity theft, phishing, fraud or other attacks. You also get email
notifications if any unusual activity is detected within your account.
PayPal, on the other hand, uses next-level encryption to
ensure that your transactions are heavily guarded. They also monitor every
transaction to prevent fraud and identity theft. They also have a buyer and
seller protection center in case of claims and chargebacks.
Speed
When it comes to speed in processing global mass payouts and
withdrawals, Payoneer beats PayPal hands down.
With PayPal, for example, you have to initiate every
withdrawal manually if you need to get cash in your bank account. This makes
the process cumbersome and time-consuming. What’s more, the funds can take
between 3 to 5 days to reflect on your bank account.
Payoneer, on the other hand, eliminates such hassles of
having to wait too long to receive your funds. Through their Global Bank
Transfer service, you are able to receive your cash in local currency to your
bank account within 24 hours once you receive your payment since the entire
process is automated.
In addition, Payoneer’s daily withdrawal limits are higher,
summing up to $5000 compared to PayPal’s $500 per month for unverified
accounts. You can, however, lift your PayPal withdrawal limits by linking your
account with your bank, verifying your debit or credit card, and by providing
your social security number.
Debit/Travel Cards
Both companies offer their customers with cards for them to
be able to access their funds in a faster and more convenient manner. However,
the availability of these cards, and especially PayPal’s Cash MasterCard is
dependent on your location.
Mobile Applications
With the growth of mobile technology, it’s hard to find a
financial services company that does not offer a mobile app. PayPal and
Payoneer are no exceptions from this bandwagon. And given that their services
are strictly offered online, they both offer mobile apps for both iOS and
Android devices so users can be able to send and receive money safely and
securely while on the go.
The mobile app’s security is very advanced such that you can
use your fingerprint for easy login. Also, if your account is accessed from an
authorized device, you will be alerted.
The only limitation with both the mobile apps is that you
can only do the basics tasks like viewing your balances, view transaction
details, send, and accept payments.
PayPal vs. Payoneer – Key Takeaways
- Both
platforms offer a secure and easy online payment for both businesses and
individuals. So you don’t have to worry about your personal information
getting shared or your funds getting lost.
- PayPal
fees are higher compared to Payoneer, which means that you can save a
significant amount of money when you transact huge amounts of money with
Payoneer.
- You
can send professional invoices using both platforms.
- Both
services are easy to integrate with e-commerce sites.
- For
mass payouts and B2B payouts, Payoneer makes the process simple since the
entire process is automated.
- You
can create a virtual US/UK bank account with Payoneer for receiving funds.
Wrapping Up
The decision on which payment option is the best is a
question of circumstance and how much money you want to transact. For example,
if you live in a country or region where only a few banks offer PayPal
withdrawal services, you might opt for Payoneer.
Similarly, if you own a website and most of your customers
prefer paying for your products via PayPal as opposed to Payoneer, you will
definitely opt for PayPal.
However, if you are just looking for an online payment
service that will save you money in the long run, our best bet is Payoneer
thanks to their low transaction fees and exchange rates.
The decision, however, is up to you to choose which service fits you better. We recommend that you do further research before settling on either of the services.
FAQ
Can you get scammed on Payoneer?
You can get scammed on Payoneer, like on any other online
payment system. Still, Payoneer is insisting on two-step verification more
frequently, and there are regular improvements to the overall safety system.
What is the difference between PayPal and Payoneer?
The two platforms can be interchangeable in some scenarios
involving online transactions. Nonetheless, their transfer fees, user
experiences, network relationships, security, etc. are vastly different.
Why does Payoneer need my SSN?
Payoneer asks for your social security number (SSN) to
confirm, beyond any doubt, that you are the rightful account owner. Only after
making this confirmation will they accept you as a customer, and you will
receive your Payoneer debit card.
What is the difference between a personal and business PayPal account?
Business PayPal accounts offer all the features of personal
accounts, as well as some additional features for owners of small and medium
enterprises. With a business account, you can set up subscription services, send
and receive invoices, and much more.
Which is better: PayPal or Payoneer?
It comes down to what you intend to do with the platform.
PayPal has lower fees, on average, and seems more convenient to use. When it
comes to international payments, Payoneer is cheaper, even though PayPal works
with more currencies and supports a greater number of countries. Amazon.com
doesn’t support PayPal, which is also a huge issue to consider. Overall, PayPal
is a more popular platform for a reason, even though Payoneer has some
advantages over it.
Which is cheaper between Payoneer and PayPal?
In terms of Payoneer vs PayPal fees, the advantage goes to
the latter. However, if you’re a freelancer waiting to receive funds, Payoneer
might feel cheaper, seeing as how all the fees go to the one sending the funds.
Moreover, PayPal transfers for family members and friends are free of charge.