Payoneer vs PayPal: Which Is the Optimal Online Transaction Service?
Last Updated: March 29, 2022
The gig economy is growing by the hour. Roughly 38.2 million Americans freelanced in 2020, 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!
PayPal is perhaps the world’s best-known electronic commerce company, specializing in online money transfers. Since it allows users to connect their accounts to their credit, debit card or checking accounts, PayPal makes a massive stride to bridge the gap between the new and the old.
The company was founded in 1998 under the name of Confinity. In March 2000, it merged with Elon Musk’s X.com. The company rebranded to PayPal in 2001 and went public in 2002. The same year, eBay bought the business for $1.5 billion. Nonetheless, due to the massive popularity of the platform and its incredible performance, in 2014, PayPal became a separate publicly traded company.
As of 2021, PayPal had about 361 million active users, and it was the preferred payment method for 87.5% of online buyers. Currently, the company’s website states consumers have exceeded 400 million.
Undoubtedly, PayPal’s user base makes it an industry leader, but many considerable alternatives exist. Payoneer is the closest competitor to PayPal. Sure, it may not be so popular when it comes to e-commerce, but in terms of small business payrolls, freelancer incomes, and gig economy, its influence and industry presence are quite impressive.
The Israeli-US company was founded in 2005 with $2 million in seed funding from founder and then-CEO Yuval Tal and other private investors. Since then, it has raised as much as $265 million in venture capital backing. In June 2021, Payoneer joined the stock market, listing on the NASDAQ exchange.
The main selling point of this platform is its debit card, which allows the user to withdraw money from virtually any ATM in the world. The fact that the Payoneer withdrawal fee is fixed is another feature attracting users around the globe.
People making money on Amazon (vendors, self-publishing artists, etc.) typically use Payoneer over PayPal since the latter can’t be linked directly to Amazon. This is only logical, seeing as how the platform is closely associated with Amazon’s competitor eBay.
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.
|Active users||5 million||400 million|
|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|
As you can see, while there’s a huge discrepancy in the number of users, when it comes to services provided, the platforms are quite comparable. Sure, PayPal supports more countries and currencies, but most of its users usually stick to one of the global currencies (regardless of their local currency).
PayPal Vs Payoneer In-Depth Comparison
To get a clearer picture of how these two platforms fare against each other, we must go into more detail. So let’s explore the most important comparison points.
First things first, to use either of these online payment services, you need to create an account.
To register on Payoneer, you need to provide:
- Full name
- Email address
- Date of birth
- Full residential address
- Phone number (for verification)
- Bank account details (optional)
And to increase your Payoneer safety, you will be asked to confirm all the information listed above by submitting photos of your ID, bank statements, etc.
It’s also worth noting that you don’t have to submit your bank account details if you don’t intend to use your bank account to withdraw funds. Having a Payoneer debit card is enough since you can use it to withdraw funds from any ATM you encounter directly.
To register an account on PayPal, you need to list:
- Full name
- Email address
- Date of birth
- Full residential address
- Phone number (for verification)
After you sign up, you can start receiving money right away. And if you’d like to send money, you must add a payment method, like debit, credit card, or a bank account.
As you can see, the registration process is fairly similar. However, when comparing PayPal to Payoneer, it’s also quite important to keep in mind that PayPal asks for confirmation and verifications a lot less often. While some consider this a convenience, others see it as a security risk.
You can use both Payoneer and PayPal cards globally to withdraw money at ATMs and pay for goods and services everywhere MasterCard is accepted. But unlike Payoneer, PayPal offers several debit and credit products. These are:
- Extras MasterCard offers reward points on eligible purchases that you can redeem for gift cards, merchandise, travel vouchers, or cash back into your account with PayPal.
- Cashback MasterCard gives you 2% cash back on every purchase, with no limitations.
- Prepaid MasterCard allows you to transfer money from your PayPal account to the card for fast access to funds.
- Cash MasterCard is a debit card linked to your PayPal balance for an easy way to manage your money.
- PayPal Credit is special financing on purchases of $99+ everywhere PayPal is accepted.
You can request a PayPal card with an active account, providing some additional info, such as Social Security Number.
Likewise, to get your Payoneer debit card, you should order it from your account. If eligible, you should have your debit card in a couple of days.
Eligibility is based on a minimum of $100 in payments received to your Payoneer account in the last six months, where payments from e-wallets such as Paypal or Skrill don’t factor in. It’s also of note that due to recent regulatory changes, Payoneer can’t issue cards to people with a Russian shipping or billing address.
When it comes to additional noteworthy services, PayPal seems to be miles ahead. Some of the most prominent ones are:
- PayPal checkout
- Business loans and working capital
- PayPal marketing solutions
- Social media selling
- Pay in 4
- Shipping discounts
- Cryptocurrency support
- QR code payments
In other words, PayPal is a full e-commerce platform with lending and marketing options included. Through some of these services, its users can even make up for various advantages of Payoneer for companies. For instance, while Payoneer users can make mass payments by default (base function of the platform), PayPal users can do so via PayPal Payouts.
Supported countries and currencies
When talking about Payoneer or PayPal, it’s also important to look at things from the perspective of someone outside the US or someone working with international audiences. Except for 28 countries, PayPal is used all across the globe. Payoneer is not much behind, with over 150 supported countries.
We should stress out here that both of these platforms are licensed and regulated in all the countries where they operate. They also have customer support in most languages that they do business with. In several major countries, there are even company branches.
PayPal allows having an account balance in 25 currencies while Payoneer supports 7. But with both companies, you can perform transactions in various worldwide currencies. Also, both platforms provide conversions during withdrawal (at MasterCard conversion fee).
Both of these platforms offer apps for iOS and Android.
The Payoneer mobile app is quite handy and versatile. It allows you to check your balance, track your invoice requests at any time, and even make payment requests on the go.
The PayPal mobile app is quite decent, too. Yet it’s still not how most people use PayPal on their mobile phones. Instead, they connect their PayPal to their Google Pay account and use PayPal in stores this way.
Costs are essential to consider when comparing two services. PayPal and Payoneer have various fees. Most of them vary by location, type of transaction, and currency. We can’t list them all, so let’s look at the basic ones:
When comparing Payoneer vs PayPal exchange rates, the numbers are fairly similar. The figure goes up to 3%. The biggest problem with Payoneer’s exchange rate fees is the lack of transparency. Sure, it goes up to 3%, but it is unclear in which scenarios.
Payoneer bank transfer fees are up to 2%, while account-to-bank transfers are free on PayPal.
On Payoneer, ATM withdrawals are $2.75 per transaction (fixed), and you get charged a $1 fee if you get declined. Payoneer ATM balance inquiries are $1 (while you can do this via an app or browser for free).
At the same time, the PayPal ATM domestic withdrawal fees start at $2.50, while the over-the-counter withdrawal fee starts at $3.00.
Of course, all of this is true if there’s no currency conversion in question.
PayPal applies an inactivity fee of up to $20 if your account has been dormant for at least 12 months. Meanwhile, Payoneer charges $29.95 for every 12 months of inactivity.
Both Payoneer and PayPal can either send your transfer in minutes or process it within several working days. The speed depends on the circumstances of your transfer.
With Payoneer, you will get your money in 2-5 business days after you receive the confirmation email. Transfers within the US usually take 2-3 business days.
Via PayPal, you can also get your money in 2-5 days (depending on your location). However, you can opt for an instant transfer of up to 30 minutes. This service costs 1% of the transfer amount, though.
When making a PayPal vs Payoneer comparison, it’s worth stressing out that things like card rejection, inability to complete payment, failure to process payment, etc. are as likely on both platforms. These are common issues that, although inconvenient, aren’t seen as controversial.
As far as some of the most recent controversies go:
In 2020, Payoneer blocked funds to thousands of freelancers in Eastern Europe because of the Wirecard fraud.
In early 2021, PayPal shut down their domestic payment operations in India due to their inability to sync the UPI and regulations with their company ambitions. When you take into consideration that 33% of all freelancers come from India, this becomes a pretty huge upset.
Situational comparison of platforms
Both PayPal and Payoneer have their strengths and weaknesses, but they can be examined realistically only when put into the right frame. In terms of business transactions, the reliability and convenience of these platforms depend on your position.
When it comes to Payoneer vs PayPal for freelancers, one thing is worth mentioning – the other party doesn’t need to have PayPal in order to make a transaction. You can just bill them via their email. This is not the case with Payoneer.
Now, ideally, you would have both, seeing as how some people prefer one or another, and there are really not that many downsides to using them simultaneously.
Also, keep in mind that, with Payoneer, all the transaction fees are paid by the one sending the funds.
Both platforms are incredibly easy to use, while PayPal may be slightly simpler to register on.
As of 2021, 99.9% of all US companies were small businesses. So many of you would be interested to know how PayPal and Payoneer work for such enterprises.
Needless to say, when running a business, you want to consider converting PayPal personal to a business account. This is a must-do for all but the smallest of sole proprietorships and one-person startups. The upgrade is both free and simple.
When it comes to Payoneer business vs personal, the biggest difference is quite a superficial one. Namely, a company account allows a business name to be shown.
Companies using Hubstaff will be relieved to hear that the platform can be integrated with both PayPal and Payoneer.
When it comes to international money transfers, Payoneer does an overall better job. This makes it great for companies hiring a large remote workforce or having branches in different countries (with centralized payrolls).
Those accessing foreign online seller platforms will also have an easier job with Payoneer.
PayPal Vs Payoneer Pros and Cons
Now here’s a brief list of the pros and cons of PayPal and Payoneer.
Some of the most highly praised PayPal advantages are:
- Easy to integrate with various accounting services
- Mastercard with no annual maintenance
- Lower fees
PayPal disadvantages that have a lot of potential users worried are:
- They could hold accounts without warning
- Can’t be integrated with Amazon
- International sales have a 4.4% transaction fee
Some of the Payoneer advantages are:
- Money is free to receive
- Can withdraw cash at any ATM
- You can use Payoneer Mastercard as a regular debit card
The most notable Payoneer disadvantages are:
- Higher rates and exchange fees
- You can only transfer money from one Payoneer account to another
- Private clients can only withdraw money from Payoneer (never transfer it)
Considering the platforms’ pros and cons is important, but bear in mind that they all have a situational significance. For instance, for some people, the impossibility of Amazon integration will be huge, while others won’t see it as a big deal.
The biggest advantage of Payoneer is the fact that its card is incredibly versatile and can be used in stores like any other debit card without an additional fee. But when using Payoneer for transactions, both you and the other party need to have a Payoneer account. This isn’t the case with PayPal.
At the end of the day, PayPal is a much bigger platform with a much wider user base. When looking at Payoneer fees vs PayPal, the rates are clearly in favor of the latter. Still, there’s no valid reason why you shouldn’t have and use both of these platforms situationally.
For instance, for a lot of Amazon users (and those making money on Amazon.com), PayPal is not a valid option, which means that, in this field, Payoneer is the only sensible choice.
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.
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.
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.
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.
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.
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.