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Published in · 9 min read · Jan 20, 2024
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Choosing the right payment platform is one of the most important decisions a freelancer can make. With more independent contractors and online content creators than ever before, picking a payment processor that meets your unique needs is crucial to running a successful business. But with so many options on the market, how do you decide between industry leaders like Payoneer and PayPal?
This comprehensive guide examines the key differences between these two payment giants in 2022. We’ll compare fees, payment speed, accepted currencies, security, ease of use, customer support, and special features. Read on for an in-depth analysis of Payoneer vs. PayPal to determine which platform best suits your freelance payment requirements this year and beyond.
By the end, you’ll have all the information you need to confidently choose the ideal payment solution for getting paid quickly, securely, and cost-effectively. Whether you’re just starting out as a freelancer or considering changing payment processors, this guide has you covered. Let’s dive in!
Payoneer and PayPal are two of the most popular digital payment platforms used by freelancers and online businesses worldwide.
Payoneer
Founded in 2005 by Yuval Tal, Payoneer is a financial services company based in New York that specializes in online money transfers and digital payments. Payoneer’s services allow freelancers, entrepreneurs and businesses of all sizes to send and receive cross-border payments quickly and easily.
Some key facts about Payoneer:
- Headquartered in New York, with offices globally
- Over 4 million customers worldwide
- Process over $50 billion in payments annually
- Available in over 200 countries and territories
- Offers services in multiple currencies
- Received over $272 million in funding since its founding
PayPal
PayPal is the older and larger of the two companies, founded in 1998 in California as Confinity before changing its name. It merged with X.com, co-founded by Elon Musk, in 2000 and was acquired by eBay in 2002.
Some key facts about PayPal:
- Headquartered in San Jose, California
- Over 400 million active user accounts worldwide
- Process over $1 billion in payments per day
- Available in over 200 markets
- Offers services in 26 currencies
- Went public in 2002 and acquired by eBay for $1.5 billion
- Spun off from eBay in 2015 into an independent public company
Both Payoneer and PayPal have grown to become leading digital payments companies worldwide, though PayPal has a broader reach and brand recognition. But Payoneer focuses specifically on serving freelancers and businesses, in contrast to PayPal’s wider consumer base.
When comparing fees between Payoneer and PayPal, there are several factors to consider:
Sending Money
- Payoneer charges a 1% fee ($3 minimum) to send money to another Payoneer account. Sending money to a bank account costs $2.
- PayPal charges a fee of 2.9% + $0.30 USD to send money both domestically and internationally using balance or a bank account. PayPal’s micropayments fee is 5% + $0.05 USD.
Receiving Money
- Payoneer has no fees for receiving money into your account. You only pay when you withdraw or spend funds.
- PayPal charges fees for receiving personal payments but not for sales through invoicing or PayPal checkout. The fee is 2.9% + $0.30 USD for domestic payments and 4.4% for international.
- Payoneer offers wholesale currency exchange rates with just 1% above the interbank rate.
- PayPal builds its currency conversion fee into the exchange rate offered, which is typically 3–4% above the interbank rate.
- Payoneer offers one free transfer per month to a bank account or debit card. Additional transfers are $3–30 depending on speed and amount.
- PayPal charges no fees for standard withdrawals to a bank account or debit card in the same country. Expedited/international withdrawals range from $5-$15.
In summary, Payoneer generally has lower fees for cross-border transactions while PayPal is cheaper for domestic payments in major currencies.
When it comes to payment speed, both Payoneer and PayPal aim to make funds available to users as quickly as possible. However, there are some differences:
Payoneer prides itself on providing fast payments. As soon as a payment is received by Payoneer, the funds are made available to the user’s account within 1–2 hours. For withdrawals to a local bank account, funds are usually available within 1–3 business days. Withdrawals to debit cards are even faster, with funds typically available within minutes. This enables Payoneer users to access their earnings rapidly.
PayPal also provides fast payments in many cases. Payments between PayPal accounts are generally instant. However, payments from a credit card or bank account can take 3–5 business days to clear and become available for withdrawal. This is because PayPal needs time to ensure the funds have fully settled from the external payment source before making them available to the recipient.
So in summary, Payoneer has an edge when it comes to the absolute speed of payments and withdrawals. But PayPal is also relatively fast when it comes to transfers between PayPal accounts. The availability of funds depends on the original payment source and withdrawal method.
Payoneer and PayPal support many of the major global currencies. However, there are some key differences:
Payoneer
- Supports payments in over 150 currencies including USD, EUR, GBP, CAD, AUD, JPY, INR and more.
- Allows users to hold balances in over 25 currencies.
- Provides multi-currency accounts to easily manage funds in different currencies.
- Low currency exchange fees starting from just 2%.
PayPal
- Supports payments in 26 currencies including USD, EUR, GBP, CAD, AUD, JPY, INR and more.
- Holds balances in supported currencies only.
- Charges a currency conversion fee of 2.5% above wholesale exchange rates for non-primary currency transactions.
- Withdrawal/transfer to bank account limited to primary currency only.
In summary, Payoneer has a clear advantage in terms of number of currencies supported and lower currency exchange fees. It offers more flexibility for freelancers billing clients worldwide and needing to manage funds in multiple foreign currencies.
When it comes to security, both Payoneer and PayPal offer adequate protection for customers. However, there are some differences in their safety features and fraud protection that are worth considering.
Payoneer utilizes encryption technology to keep all transactions and sensitive data safe. They also use multi-factor authentication as an extra layer of protection. Payoneer’s fraud prevention system monitors for suspicious activity and notifies users of any potential unauthorized access attempts. They also offer a payment protection program that covers users in case of any unauthorized payments.
PayPal also uses encryption and has built-in fraud protection tools. They scan transactions for signals that indicate fraudulent activity. PayPal offers a Seller Protection policy that provides coverage for unauthorized payments and item not received claims. They also back all purchases through their Buyer Protection program. Additionally, PayPal provides the option for two-factor authentication.
When comparing the two, Payoneer appears to have a more robust fraud prevention system in place. Their payment protection program sets them apart by offering coverage for unauthorized transactions. PayPal’s fraud scanning and protection policies are good, but some users have reported issues with claims being denied. Overall, Payoneer edges out PayPal when it comes to the security of payments and transactions.
When choosing a payment platform, how user-friendly the interface and overall experience is can make a big difference in how easy it is to manage your finances and transactions. Both Payoneer and PayPal aim to provide intuitive platforms, but there are some differences to note.
Payoneer has focused on simplicity in their interface design. The dashboard allows you to easily view account balances, transaction history, and insights. For basic tasks like sending money or requesting payments, the process involves just a few simple steps. This straightforward process makes Payoneer popular with freelancers and contractors who need to regularly invoice clients and receive payments.
PayPal provides a more robust interface with many more features and customization options. For some users, this can feel overwhelming initially. The platform can take more time to master. However, PayPal does provide extensive help resources and tutorials to guide users. Once accustomed to PayPal, the greater flexibility can be beneficial for managing more complex financials and transactions.
When evaluating ease of use, consider what features you need access to on a regular basis. If you desire simple invoices and money transfers, Payoneer offers that smooth experience. But users managing more intricate financials may ultimately find PayPal’s adaptability worth the small learning curve. The right platform depends on your payment needs and comfort with interfaces.
Both Payoneer and PayPal offer customer support through multiple channels like email, phone, live chat, and support tickets. However, when it comes to quality and availability of support, Payoneer edges out PayPal.
Payoneer provides 24/7 customer support through all their channels. You can expect quick first response times and resolution of issues when contacting their support team. They have localized support in over 150 countries and can assist you in many different languages.
PayPal also offers 24/7 customer support but response times are slower in comparison. Their support team is not as knowledgeable or empowered to resolve complex issues. You often need to follow-up multiple times and escalate to supervisors. Language support is more limited than Payoneer.
In addition, Payoneer provides dedicated account managers for high volume customers. This provides personalized and prompt support for your important issues. PayPal does not offer such white glove service.
Overall, Payoneer’s customer support is superior in quality, availability, and empowerment to resolve customer issues efficiently. This makes it the preferred payment platform for freelancers and businesses who value reliable support.
Payoneer and PayPal both offer additional features and services beyond just sending and receiving payments. Here are some of the extra tools available with each platform:
Payoneer
- Payoneer offers a virtual Mastercard that allows you to withdraw funds directly to a card. This card can be used online or in stores just like a regular debit card.
- With the Payoneer card, you can withdraw cash from ATMs worldwide. This provides easy access to your funds locally when traveling or living abroad.
- Payoneer has a vendor payment service that lets you automate mass payments to contractors, freelancers, and vendors. This simplifies the payment process for businesses.
- Other services include local bank transfers, an expense management tool, invoicing, tax forms, and cross-border payments in multiple currencies.
PayPal
- PayPal allows merchants to create customized online checkout experiences with PayPal Commerce Platform. This helps businesses sell in more places online.
- PayPal Working Capital provides a business line of credit or short-term loan based on a company’s PayPal sales history. This gives access to funds to grow a business.
- PayPal has invoicing and billing services to easily invoice clients online and accept credit card payments.
- Other tools include POS systems for in-person sales, transaction processing, and the ability to accept donations and crowdfunding.
When choosing between Payoneer and PayPal in 2024, freelancers need to consider several key factors like fees, payment speed, security, and ease of use to determine the best payment platform for their needs.
In summary, Payoneer tends to offer lower fees, quicker payouts, and better currency exchange rates compared to PayPal. Payoneer also provides some additional tools and services that are useful for freelancers receiving international payments. However, PayPal may be a bit easier to use and more universally accepted by clients.
PayPal charges higher fees, particularly for international payments, but has a larger global reach and may be more convenient for freelancers working mostly with local clients. PayPal also offers slightly better fraud protection and dispute resolution services.
For most freelancers earning income from international clients, Payoneer is likely the better option in 2024 due to the lower fees and faster payouts. Payoneer also provides multi-currency accounts, prepaid debit cards, and other helpful services tailored towards freelancers and remote workers.
However, for freelancers working mainly with local clients, PayPal may be the preferable choice due to wider adoption. PayPal can also be a good backup option for receiving payments if a client has issues with other platforms.
The best approach may be to use Payoneer as the primary payment platform, but maintain a PayPal account as well for occasional client needs. This covers all the bases and provides the most payment flexibility.
What are your thoughts regarding Payoneer vs PayPal for getting paid as a freelancer in 2024?
