PayPal vs Payoneer Comparison
When it comes to online payment systems, there are only a few services which are as iconic as PayPal and Payoneer. They are two of the most popular payment services in the world and have been around for over a decade. PayPal and Payoneer have both seen an exponential rise in growth over the years. Both offer their services in over 200 countries. In this article, we have compared both these payment providers so you have all the information to pick the service that is most suitable for your needs. The first step is to understand how each of these services function and what their USP is.
Payoneer, for instance, is an online payment system that is geared towards non-personal, business transactions. It is better suited for businesses, professionals, freelancers and product/service marketplace transactions. Payoneer charges a flat 2% above the mid-market rate to convert money.
PayPal, on the other hand, makes sense if you’re making transactions within the same country, for personal transactions like online shopping or sending money to your friends and family. Using PayPal for international transactions is not a good idea, as it can turn out to be extremely expensive. PayPal charges a steep transfer fee that is hidden in the currency conversion charges that are associated with international transactions.
Payoneer is focused towards businesses, online marketplaces, freelancers and international transactions. It allows its customers to send and receive payments from businesses and marketplaces, across a host of different countries. Payoneer is clearly different from other payment service providers. Their currency exchange service is determined by the status of your payoneer account as well as your beneficiary’s.
Payoneer’s services are also geared towards facilitating commercial transactions. They offer services like direct currency conversions and payment solutions which enable businesses to pay employees and freelancers alike.
PayPal is very different in this regard. If you are based in the US, you can choose from a variety of PayPal’s business solutions. Right from sending invoices and emails to integrating payments on your website, PayPal facilitates it all.
PayPal vs Payoneer: Comparing Debit & Credit Cards
With Payoneer’s Mastercard, you can make a purchase through any currency, as long as it is not the same as the listed currency of the card. The conversion is based on Mastercard’s conversion rates. Additionally, Payoneer levies a 3.5% currency conversion charge to the transaction.
PayPal has a cash Mastercard that’s linked to your PayPal balance. Additionally, it also has a prepaid mastercard for you to transfer money onto this card from your PayPal balance. PayPal also offers two credit cards, but there’s a lot of ambiguity over the entire fee structure. Finding fees on PayPal’s website is tricky. It’s likely that even when you do find it, you may not be entirely satisfied with the results.
PayPal’s transparency, or rather a lack of it with card fees, signals the fact that it’s clearly more expensive than its counterparts.
Example of PayPal’s Fees
In the US:
No charge for withdrawing money from Moneypass ATMs. This is a limited network of ATMs. For all others, you incur a charge of USD 2.50 per transaction.
Outside the US:
USD 2.50 or 2.5% of the transaction at a Non-US ATM or at a Non-US Merchant.
This Fee is levied regardless of the transaction. You could be paying in US dollars and you’d still incur this charge. This proves that whenever it boils down to international transactions, PayPal is not only more expensive than Payoneer, but is also one of the most expensive payment service providers around.
Also, while PayPal does not charge a setup fee, it does charge a lot of transaction fees on any sale through the PayPal gateway, product or service. The customer is charged a 2.9% transaction fee, and an additional fixed fee based on the currency. Outside the US, the transaction fee jumps upto 4.4% + the fixed fee based on currency.
You can send your customer an invoice with no charges. Yet, they will be charged all these, as soon as they make the payment, while also being affected by PayPal’s terrible exchange rate.
Comparing Debit & Credit Cards
Payoneer charges no fees for setting up the account. Receiving payments from another payoneer customer, via ‘Make a Payment’ option is also free of cost. Also, with the Global Payment Service, receiving payments in USD, EUR, GBP, CAD, AUD, JPY & MXN will not incur you any fees. In Payoneer’s words, you will be given a local receiving account and not cost you anything more.
Receiving payments via your customers’ credit cards will mean a 3% transaction charge is applied. The same drops to 1% for e-checks (US specific). Transaction fees for marketplaces vary and are determined by the marketplace.
Payoneer applies a 2% transaction fee, for withdrawing funds to your account, in your local currency. This is 2% above mid-market rate and includes the conversion fee.
To compare this with PayPal, it does not charge you anything to move money from your PayPal account to your bank account. But a fee of 2.9% is levied, if you transfer or pay with your debit card, credit card or PayPal credit.
Fees vary on international transactions. For example, sending money from the US to another could vary between $0.99 to 4.99 per transaction, if you send money from your PayPal balance to your bank account. Payments with debit card, credit card and PayPal credit are additionally charged 2.9%, as mentioned above. For every international transaction, you’re charged a transaction fee and to make it all worse, the exchange rates are really bad too.
See also: Payoneer Review
Comparing Exchange Rates
Payoneer exchanges currency at the mid-market range and charges a commission fee of 0.5%. Withdrawing funds to a bank in local or differing currency attracts a 2% above mid-market rate fee. This fee is to enable currency conversion and processing funds to a bank account.
PayPal’s rates are varied, as they depend on the rate they get from the bank, and not the mid-market range, like in the case of Payoneer. Since the bank rates are not transparent and in general poor, this is not good for currency exchange. Additionally, PayPal charges 2.5% on top of the rate bank provides them. Which makes it extremely expensive for the customer and extremely profitable for both PayPal and the bank.
At the end of the day, these are both top payment processing systems. So in terms of safety, you could use either. Both are very secure and your data is extremely unlikely to get compromised. If there was one answer alone, PayPal may be slightly safer, as it is a publicly traded company.
Ease of Use
Payoneer is much better in this regard, simply because it allows for a lot of automation. Once you set up an automatic payout, Payoneer will convert the funds to the currency of your account and send it to your account. Payoneer also has a higher withdrawal limit of USD 9,500 per day.
PayPal can be exhausting as you have to manually request transactions every time, with no room for automation.
Time It Takes To Move Money To Your Account
This is a no-brainer. Payoneer sends the funds to your account in less than 24 hours, while PayPal takes anywhere between 2 to 4 business days. Sure, PayPal offers an option to process the transfer of funds sooner, but a higher fee is levied for faster transfers.
See also: 8 Best PayPal Alternatives