Payoneer vs PayPal: A Comparison

Payoneer and PayPal are two major players in the international payment systems market, both established in 2005. While both allow for transferring and receiving payments globally, they each have their own strengths and weaknesses. This article explores the key differences, helping you decide which one is more suitable for your business.

Payoneer overview

Payoneer is an international payment system designed for freelancers, businesses, and e-commerce sellers. It offers a global reach by providing users with virtual bank accounts in various currencies, making international transactions seamless. It also comes with a physical MasterCard for easy ATM withdrawals and offers multiple options for currency conversion.

Pros

• Lower fees: free transfers between Payoneer accounts, and competitive fees on global payments.
• Multi-currency accounts: ability to hold balances in different currencies, making it easier to manage international transactions.
• Global payment service: integrates with various global marketplaces like Amazon, eBay, Upwork, and Airbnb.
• ATM access: Payoneer MasterCard can be used worldwide for withdrawals.
• Faster payouts: direct payouts from global platforms and quick transfer options.

Cons

• Limited mobile app functionality: while you can check balances and make basic transfers, the app is not as feature-rich as PayPal's.
• Service availability restrictions: payoneer services may have limitations in certain countries or be affected by sanctions.
• Additional fees for bank withdrawals: a 2% fee is charged for withdrawals to local bank accounts, which may add up depending on the amount and frequency.

PayPal overview

PayPal is one of the most widely recognized online payment systems, offering services to individuals and businesses alike. With its user-friendly platform, it facilitates secure transactions for both online purchases and business payments. PayPal's global presence has made it the go-to solution for many e-commerce activities.

Pros

• Global recognition: widely accepted by online merchants, businesses, and consumers across the globe.
• Secure transactions: strong security features for safe transactions, including buyer and seller protection.
• Multiple payment options: link credit cards, debit cards, or bank accounts to make payments or transfers.
• User-friendly mobile app: a highly functional app that enables seamless transactions on the go.
• Instant transfers: allows for immediate payments and money transfers between PayPal accounts.

Cons

• Higher fees: charges can range from 0.4-5% depending on the type of transaction and country.
• Exchange rate markups: PayPal’s currency conversion rates tend to include additional fees.
• Account limitations: PayPal can freeze accounts if certain activities trigger its security system, which may cause interruptions in business operations.
• Country restrictions: some features may be unavailable in certain countries, limiting how funds can be received or transferred.

Payoneer vs PayPal: which one stands out?

In this section, we'll take a closer look at how Payoneer and PayPal compare across various features. From fees and transaction capabilities to account types and usability, you'll gain insights into which payment system suits your business needs best.

Registration and account setup

When setting up a PayPal account, you'll need a credit or debit card to verify your account. PayPal also allows you to choose a primary payment method (credit card, PayPal balance, or linked bank account). On the other hand, when registering with Payoneer, you can open a multi-currency account with bank details in different jurisdictions. Payoneer offers a physical MasterCard that can be used to withdraw funds from ATMs globally, giving it an edge over PayPal in terms of offline accessibility.

PayPal’s convenience vs. Payoneer’s low fees

PayPal is known for its user-friendly interface and seamless online payments, ideal for shopping and sending money. It also provides a mobile app for cashless transactions, generating QR codes for easy payments. Payoneer, while having a more limited mobile app (checking balances, making Payoneer-to-Payoneer transfers), shines in its lower fees. PayPal’s transfer fees can be steep for receiving payments, while Payoneer allows fee-free transfers between accounts. For businesses looking to save on transaction fees, Payoneer might be a more cost-effective choice.

Fees and transaction limits

Both PayPal and Payoneer operate in numerous countries but impose restrictions on transactions based on the user's location. Currency exchange rates vary for both systems and depend on the type of payment. PayPal generally charges a 2-2.75% fee for currency conversion and 0-2% for transfers from a U.S. bank account. Payoneer, however, offers a more competitive fee structure, with no charges for internal transfers and only 1% fees for global payments received.

eBay’s switch to Payoneer

A significant change in 2021 saw eBay switching its payment partner from PayPal to Payoneer. This shift is good news for eBay sellers in countries like Ukraine, as they can now withdraw funds directly without using intermediaries. However, sellers in Russia face challenges due to local sanctions, making it difficult to access Payoneer services.

Final thoughts

Ultimately, your choice between Payoneer and PayPal may be dictated by the platform you use or government regulations in your country. While PayPal has its benefits, especially for online payments, Payoneer stands out with lower fees, global reach, and integration with major platforms like Amazon and eBay. For most businesses looking to optimize international transactions, Payoneer offers a more attractive fee structure and broader support for e-commerce platforms.

Need assistance navigating the complexities of online payment systems? Our team at SellerSail is here to guide you through setting up and optimizing your Payoneer or PayPal accounts for business transactions.