Payoneer vs PayPal: Which One is Right for Your Small Business?
By Paul Martinez
/ September 28, 2022 March 16, 2023
Table of Contents
Speed, convenience, accessibility, and affordability are your main criteria when looking for a payment processor. It is especially true for international money transfers.
This way, narrowing down your options from the long list of service providers online becomes easy. Two options tend to make it to the top of any list; Payoneer and PayPal.
Indeed, making and receiving payments is critical for any business. It ensures continued business success and improved stakeholder relations. Thus, you need to send payments as quickly and conveniently as you expect to receive payments.
Dealing with suppliers and clients this way is only possible if your payment processor is up to the task. Payoneer and PayPal have proven capable thus far. However, which one would you go for if you had to choose?
Here is our Payoneer vs. PayPal comparison to help you make the right decision.
Our Pick
PayPal is a better choice for small to medium-sized businesses with a low-volume income. Alternatively, larger businesses may find Payoneer more cost-effective. The platform is also easier to use, while PayPal is considered more complicated.
When it comes to speed, PayPal is faster, completing transactions within a business day or two. On the other hand, Payoneer might take up to three business days.
In short, each service covers the basic needs of sending and receiving money while excelling in different scenarios. It comes down to why you need to transfer funds online.
About Payoneer
Payoneer is a payment processing platform for merchants to send and receive payments without a merchant account. Apart from international exchanges, you can even do a local bank transfer. The service covers the basics and handles USD, GBP, EUR, AUD, CAD, JPY, and CNH.
This platform is a product of Payoneer Global Inc., an American financial services company founded in 2005. It shares many similarities with PayPal regarding approach, user base, and industry application. Payoneer’s customer base is around four million, and it operates in more than 200 countries.
Features
Payoneer Mastercard: Those who owe you can use their Payoneer account, direct debit, or ACH direct deposit to settle the payments. Your Payoneer account allows you to bill them or request payments safely. Additionally, you can withdraw those payments from any ATM that supports Mastercard. However, you’ll need the Payoneer Mastercard for that. The applicable rates are similar to any other Mastercard.
Various Ways to Get Paid: Payoneer allows payments through ACH bank debit, credit card, or a local bank transfer. It also offers a subscription model for services that need regular payments.
Payoneer Capital Advance: You can access a merchant cash advance capped at $750,000 via Walmart or Amazon if you sell via those companies. This service goes by the name of Payoneer Capital Advance. It comes in three tiers with increasing accessible amounts, payment periods, and added benefits.
Available in Multiple Currencies: Your business can have a local currency bank account in the U.S., UK, EU, and other regions. This eases the transfer of funds from your Payoneer account to your local bank account. The account has multi-currency conversion capabilities, further increasing its convenience.
Get Funds Fast: Transferring funds using Payoneer is simple. You only need to provide your Payoneer account to the person sending the money. Additionally, you can set up your account to disburse payments to a supplier’s local bank account. It’s important to point out that you don’t need a Payoneer account to send payments. Lastly, it receives funds even from a PayPal account at a small fee.
Secure: Payoneer had a safety concern in the past that was quickly addressed. The Payoneer Mastercard was in conjunction with a company called Wirecard, which had fraud cases back then. Fortunately, Payoneer cut off ties with the company, and all customer funds were restored. The service switched to its own issuer, Payoneer Europe Limited, in 2020.
Fewer Fees: Overall, expect fewer fees using Payoneer than PayPal. Yet, there are some unexpected charges, such as an account maintenance charge of $29.99 after one year of inactivity. Common charges include a 3% charge on a credit card for all currencies and a 1% charge for ACH bank debits when receiving funds.
Pros
Accessible in 200 countries
Covers 150+ local currencies
Allow you to request payments
Facilitates custom invoices
Offers easy to use interface
Ensures practical solutions for freelancers
Free Payoneer to your bank account transfer
Cons
Poor customer support
High annual Mastercard charges
About PayPal
PayPal is a digital payment service founded in 1998 by Elon Musk and his colleagues. PayPal experienced exponential growth in 2002 when eBay acquired the company and made it the primary payment solution. The service currently boasts 426 million active users, dwarfing its closest competitors.
Additionally, PayPal facilitates online payments while keeping your information secure. As such, it handled both corporate, retail, and personal payments. Most people prefer it for sending money to family and friends. There is also PayPal cash Mastercard, but more on that later.
Features
Paypal Checkout: PayPal offers a seamless means for individuals and businesses to receive payments. PayPal Checkout presents a fast and convenient option for online shoppers to send you money. Integrating it with your checkout process allows for easier transactions. This may include credit or debit cards, direct PayPal accounts, or installment payments through PayPal Credit. You may also use PayPal Invoicing to build and disburse custom invoices to customers.
Scheduled Payments: You can pay virtually any person or entity through your PayPal account. You can also conveniently schedule payments. Furthermore, you can use the PayPal Business Debit Mastercard to send money through your PayPal account. There are no annual fees or credit checks. PayPal Payouts is a convenient way to send mass payments in multiple currencies.
Instant Transfer Service:PayPal’s Instant Transfer service allows you to instantly move funds to a bank account or credit card at a small fee. The service integrates fraud detection tools with AI to learn your processes. This helps prevent malicious activity on your account. Additionally, you don’t need to share bank account information to send or receive funds. Your PayPal ID will do.
End-To-End Encryption: PayPal offers end-to-end encryption for all communication between your devices and your bank account. As one of the oldest online payment gateways, PayPal offers top-notch security. Moreover, two-step authentication is standard across the service.
No Maintenance Charges:
PayPal claims to be upfront about its charges, but it comes down to individual use cases and applicable fees. Fortunately, there are no maintenance charges on a PayPal account, even one with zero PayPal balance.
Pros
Ensures faster transactions
Provides multiple financing options
Offers additional security
Does not charge for Mastercard
Supports e-commerce integrations
Offers several business tools and discounts
Free invoicing service
Online and in-person payment solutions
Supports crypto
Cons
A little complicated to use
Popular phishing target
Similarities Between Payoneer and PayPal
When talking about Payoneer vs. PayPal, there are some prominent similarities that can ease your decision.
Core Service
Both platforms offer similar services. You can send and receive funds domestically with Payoneer. It also allows convenient international money transfers or international payments.
Likewise, PayPal is a payment gateway and processor service that facilitates online funds transfer.
Working Capital
If you sell on Walmart or Amazon, you can acquire a merchant cash advance which may extend to $750,000. PayPal also offers business loans, providing you with the required amount in a day or two.
Debit Card
Apart from sending and receiving funds, you can also withdraw money directly using a debit card from your Payoneer or PayPal account. Although PayPal offers a free Mastercard, Payoneer charges a fixed fee.
E-Commerce Integrations
You can integrate PayPal with your e-commerce and freelancing business to enjoy secure local and international payments. Several Payoneer features also ease e-commerce payments, helping businesses collect and manage their funds.
Differences Between Payoneer and PayPal
Each service covers the most basic needs, excelling in different scenarios. It comes down to why you need to transfer funds online. Additionally, they target different customers and do so differently.
Here are the distinctions you need to know regarding Payoneer vs. PayPal.
Cost-Effectiveness
Small to medium-sized businesses with low turnover will save more through PayPal. However, larger businesses will realize the most savings through Payoneer.
Security
PayPal is the more secure platform. It is the larger platform with the most security features and has been operating for the longest. Additionally, it enjoys positive reviews, hardly ever being in a scandal, unlike Payoneer.
Convenience
Payoneer is an easier-to-use platform. Everything from the interface to adding features and customer access is easier on Payoneer. PayPal comes across as complicated and technical.
Transaction Processing Time
PayPal is faster, offering transactions within 1-2 business days, whereas Payoneer takes up to three business days.
Conclusion
Both platforms enable fast, secure, and convenient online fund transfers. Moreover, you can operate an online business and offer and seek freelancing services involving international payments.
Most transactions are instant, with the transfer to bank accounts at varying speeds. You can also withdraw money through PayPal and Payoneer Mastercard.
Either way, these two top services cater to most of your needs. Differences arise when you need a specific feature or service. Payoneer shines in some and PayPal in others.
This review highlights those differences by comparing Payoneer and PayPal to help you pick the best solution.
Paul Martinez is the founder of EcomSidekick.com. He is an expert in the areas of finance, real estate, eCommerce, traffic and conversion.
Join him on EcomSidekick.com to learn how to improve your financial life and excel in these areas. Before starting this media site, Paul built from scratch and managed two multi-million dollar companies. One in the real estate sector and one in the eCommerce sector.
