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Finance

Payoneer vs PayPal Comparison

Payoneer vs PayPal - Which International Payment Solution is For You?
Image source: Depositphotos

 

Businesses need to get paid and get paid fast and that’s where payment processors like Payoneer and PayPal come in. They enable every sized business to quickly make and accept payments domestically and abroad.

Both are leaders in their own right but that doesn’t mean they’ll make sense for everyone. Your need for speed, the types of clients you serve, and your customers’ locations, will dictate which one is best suited for your business.

With that in mind, here’s a deep dive into Payoneer vs. PayPal’s services and side-by-side comparisons of the two payment processing leaders.

Payoneer

Founded in 2005, Payoneer is a global payment processor that counts Amazon, Google, and Airbnb among its more than four million customers. Payoneer can process payments in more than 150 currencies for its business clients located in 200 countries around the globe. Payoneer, which processes payments in 0-3 days, doesn’t cater to consumers, focusing on the b2b market. You won’t be able to process payments through a point-of-sale or access a merchant account with Payoneer but that hasn’t stopped it from dominating in the marketplace. In 2020 alone it had payment processing volume of $44 billion.

Payoneer features

When comparing Payoneer vs. PayPal it’s essential to take a detailed look at the features the two payment processors offer. Only then can you weigh it against your business needs to make an informed purchasing decision. When it comes to Payoneer, features abound that should appeal to businesses already operating internationally or ones that have designs to do so.

Payoneer offers three main services: the ability to make payments, receive payments, and manage payments. Payoneer accepts payments in more than 150 currencies. Payments are accepted in the local currency of the customer and then converted into the currency of the business owner’s choice.

Customers manage payments through their Payoneer account, which can be set up in minutes. The account acts as a checking account, enabling businesses to pay suppliers, vendors, and contractors, accept payments from customers and transact via the Payoneer prepaid debit card.  Payoneer also accepts credit card and ACH direct deposits on your behalf and supports peer to peer payments among Payoneer customers.

Strength internationally

Payoneer focuses on supporting businesses with international clients and is known for its currency converter service. Through the service, it’s as if you have a local account in the country your customer resides in. That removes international wire transfer costs. Payoneer also enables you to get paid in multiple currencies from international marketplaces. When it comes time to convert currency, the process takes minutes. Through its VAT payment service, paying VAT authorities in Europe and the UK is easy, and free.

Simple invoicing

Sending invoices is made easy on the Payoneer platform. Business owners can send bills to suppliers, contractors, and others directly from the Payoneer dashboard. Payments can be converted into the currency of your choice.

Funding support for Walmart, Amazon sellers

Through its Capital Advanced program, Payoneer will advance up to $500,000 to Walmart and Amazon eCommerce sellers depending on the monthly volume of each store’s sales. Payoneer takes a portion of same-store sales until the advance is settled.  It charges a fixed fee for this feature.

Payoneer Fees

Payoneer is transparent about its fees listing many of them on its website. Here’s a breakdown of what it costs to send, receive, and withdraw money on the Payoneer platform.

Receiving Payments

  • Receiving payments from another Payoneer customer is always free.
  • Payoneer charges 3% on credit card payments and 1% on ACH Bank debits.
  • Payments via receiving accounts in USD, EUR, GBP, JPY, CAD, AUD & MXN are free.
  • Marketplace fees vary depending on the online platform.

Sending Payments

  • Payments between Payoneer customers: free
  • Sending direct to customer’s bank account: 2% above the market rate at the time of the transaction.
  • Payment via ACH Bank Debit: 1%
  • Payment via Credit Card: 3%
  • Local bank transfer: 1%

Withdrawing funds to a bank account

Payoneer charges you to withdraw funds depending on the currency.

  • The fee for USD to USD withdrawals is $1.50; €1.50 for EUR to EUR withdrawals, and £1.50 for GBP to GBP withdrawals.
  • For withdrawals to local banks in other currencies, Payoneer charges up to 2% above the market rate at the time of the transaction.

Currency conversion rate: 0.5% of the amount of the transfer

Payoneer has an annual account fee of $29.95 which is only charged if you keep your account open for 12 months without making a transaction. The company also deducts a processing fee if it’s required to escheat your funds to the applicable state.

Payoneer has made a name for itself in payment processing thanks to its transparent pricing, processing speed, and support for multiple currencies. It’s best suited for b2b businesses with international customers who want to keep fees at bay.

PayPal

PayPay is a global household brand, that’s been in business since December of 1998. With more than 360 million customers, many of them consumers, it is a huge player in the payments market. PayPal also helps businesses make payments and get paid through its merchant services.  PayPal is active in more than 200 countries and supports payments in several currencies. When comparing PayPal vs Payoneer, Payoneer has an edge in the currency department. It supports more than 150 different currencies to PayPal’s 100.

PayPal Features

When it comes to PayPal vs Payoneer, it all boils down to what you want from your payment processor. PayPal is a one-stop-shop. You get a POS, merchant account, invoicing, and the ability to accept payments. Payoneer doesn’t offer that. Instead, you get to choose the POS software and merchant account provider that makes the most sense for your business. If you’re in the market for a full-service payment processor, PayPal has several features that are appealing to business owners.

Accepts a variety of payments

PayPal makes it easier to accept payments from customers thanks to support for several payment methods including credit cards, debit cards, PayPal accounts, and Venmo. PayPal is already integrated into marketplaces across the world, enabling business customers to track PayPal transactions in one place. Sales from marketplaces can be directly deposited into your business banking account via PayPal.

In-person payments

Through PayPal’s POS platform business owners can accept payments in-person whether it’s in a physical store or on the go at a flea market.

Easy invoicing

Invoicing is simple when using PayPal as your payment processor. You can create and send invoices from PayPal within minutes and provide multiple options to pay online including via debit and credit cards. A bonus, customers don’t need a PayPal account to pay you. You can also send a clickable link that customers can use to make payments or go with its payment button you place on your website.  PayPal also lets customers set up subscription payments which the payment processor manages for you.

PayPal Payouts is another service that makes it easy to send money to multiple vendors at once. Payments will show up in their PayPal or Venmo account.  Just like Payoneer, it offers a PayPal business debit card.

PayPal Fees

Comparing the fee structure of Payoneer vs. PayPal can get difficult, given the latter’s pricing is more complex depending on the transaction and currency. Nevertheless, PayPal is transparent about what it charges to accept payments. Here’s a look at some of the rates.

Receiving Domestic Transactions

  • Commercial Transactions – Online: 2.90% + fixed fee
  • Commercial Transactions – In-Store: 2.70% + fixed fee
  • PayPal’s pay later offers: 2.90% + fixed fee
  • QR code Transactions – 10.01 USD and above: 1.90% + fixed fee
  • QR code Transactions – 10.00 USD and below: 2.40% + fixed fee
  • Venmo: 2.90% + fixed fee

International transactions face the above rates plus an additional fee based on the transaction type.

  • Commercial Transactions – Online 1.50%
  • Commercial Transactions – In-Store 1.50%
  • PayPal’s pay later offers- 1.50%
  • QR code Transactions- 1.50%
  • Venmo – 1.50%

Receiving payments via PayPal Online Card Payment Services

  • Advanced Credit and Debit Card Payments: 2.90% + fixed fee
  • Advanced Credit and Debit Card Payments: American Express Payments 3.50%
  • Payments Advanced: 2.90% + fixed fee
  • Payments Pro: 2.90% + fixed fee
  • Payments Pro -American Express Payments: 3.50%
  • Virtual Terminal: 3.10% + fixed fee
  • Virtual Terminal – American Express Payments: 3.50%

International transactions face the above rates plus an additional fee based on the transaction type.

  • Advanced Credit and Debit Card Payments: 1.50%
  • Advanced Credit and Debit Card Payments – American Express Payments: No fee
  • Payments Advanced: 1.50%
  • Payments Pro: 1.50%
  • Payments Pro – American Express Payments: No fee
  • Virtual Terminal: 1.50%
  • Virtual Terminal – American Express Payments: No fee

Currency Conversion rates

  • PayPal charges 4% if you are paying for goods and services in another currency, sending money to friends and families, or via PayPal Payouts and MassPay.
  • It charges 3% on all other transactions.

There are various other fees including chargeback fees and dispute fees which are disclosed on PayPal’s website.

Wrapping up this Payoneer vs PayPal comparison

When it comes to PayPal vs.  Payoneer, both are great choices in the payment processing market depending on the needs of your business. Payoneer wins out for businesses with customers both in the U.S. and internationally. It supports several currencies, offers speedy payment processing, and has cheaper rates for currency conversions. Payoneer makes it easy and seamless to sell products and services around the world and in marketplaces across the globe. If you care about managing different currencies and don’t want to overpay, Payoneer is for you.

PayPal, on the other hand, is best suited for domestic-focused businesses that want POS software as well as payment processing.  You’ll pay more if you have any international transactions but won’t have the headache of shopping for a separate POS platform and merchant account provider.

 

This is a contributed article.

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