Comparing Payoneer Vs PayPal: Which Is Best for Business?
When it comes to ways to pay and get paid, there are two juggernauts in the arena. Which should you choose for your business, and why?
If you're running a small business, you need a payment processor. After all, you won't be in business for very long if you never get paid. A payment processor is how this happens. It's more than that though. A payment processor will also allow you to pay other businesses. If you've been in business for more than a day, you know money comes in but also goes out. A good payment processor will allow the cash to flow in both directions.
Two of the biggest payment processors to choose from are Payoneer and Paypal. Both have been around for a long time, with Paypal being the older of the two. Both allow you to make payments to other businesses and accept payments from customers and businesses.
Both Payoneer and PayPal can help you get paid. You'll find them on sites like Amazon, eBay, Etsy, and others. They'll let you send money to another person or company. They both offer services such as credit card processing.
Choosing one over the other can be difficult. We're going to make it easier for you with a detailed comparison of Payoneer Vs PayPal. Let's see if we can determine the best option between these payment processing services.
Here’s What We’ll Cover:
What is PayPal?
PayPal is a financial services company founded in 1998. The company was something of an overnight success and grew rapidly. In 2004, just six years after its birth, eBay bought PayPal for $1.5 billion. If you've ever shopped on eBay before, you have certainly used PayPal.
Since then, PayPal has grown into one of the largest online payment processing companies in the world. The number of websites that have PayPal as a check-out option is staggering. So, what's great about PayPal? What's not so great?
First, we'll take a look at a few of the benefits of using PayPal in your business.
- Longevity / Reputation - PayPal has been around for over twenty years now. It is a well-known brand, particularly in the e-commerce industry. Because it is so well-known, it has gained a lot of consumer trust over the years. People may be hesitant to pay using an unknown payment processor. Consumers and businesses tend to feel comfortable making payments through PayPal's proven system.
- Easy Integration - There are many different plugins and apps available. This helps integrate Paypal into various accounting softwares. It can also integrate into your website, whether you use WordPress or Shopify.
- Secure Payment - PayPal is a trusted provider of secure payments. Paypal protects all users against online theft and fraudulent account activity. Credit card or debit card payments are all processed through secure payment gateways.
- Get Paid Anywhere - Not only does PayPal accept online payments, but you can now get paid In-Person.
- Paypal Cash Mastercard - With a PayPal business account, you can get a debit card. This provides direct access to the funds from your account anywhere that accepts Mastercard.
- PayPal Credit - A business can also sign up for the PayPal Cashback Mastercard. This PayPal credit card can offer decent rates and is another useful tool for your PayPal Business Account.
- Easy Sign-Up - Getting a PayPal account setup takes no more than 10 minutes. The process is straightforward. This is part of the reason it has become so popular. This ease of access means more of your clients and customers will be using the platform.
- Invoices - With PayPal, you can create and send invoices to customers for services provided. This is a major benefit that not all payment processing services include.
There are always both positive and negative aspects of any product or service. Here are some of the downsides to using PayPal.
- Payment Limitations for New Accounts - If you're new to PayPal and just set up your account, you may have a $10,000 limit per transaction for a while. This could be an issue if your business regularly accepts payments larger than this.
- Account Holds - PayPal occasionally places holds on accounts in situations where fraud is suspected. This is a good safeguard, but the system is a little too sensitive sometimes. Many times when an account has a hold placed on it, there is no actual fraudulent activity going on to trigger it.
- Fees - PayPal's fee structure includes a fee of $0.30 plus 2.9% of the payment amount. This is on the high side when you're processing many small payments.
- Slow Bank Transfers - It often takes three full business days to complete a bank transfer from Paypal to an external bank account.
- Doesn't Work Great with Some Banks - PayPal can be a bit difficult at times when it comes to adding certain online-only banks. For example, adding a Discover Checking Account to Paypal for transfers does not seem to work.
Overall PayPal is a good option for a business to make and receive payments. It offers several advantages including easy integration, security, and ease of use. The ability to send invoices makes life much easier for businesses and freelancers alike. However, it also has some drawbacks like slow transfers and higher fees. The account holds, if they happen to you, can be frustrating as well.
What is Payoneer?
Payoneer was founded in 2006 by two former Paypal employees. The company provides a platform for individuals and businesses to process money transfers. Payoneer is best known as an international money transfer service.
- Fast Bank Transfers - Payoneer money transfers are fast, typically completed within 24-hours. This is even faster than PayPal, which can take three business days for a transfer to complete.
- Easy to Use - Payoneer is easy to use. The simplicity makes it an attractive option for those who just need to process a payment without 100 different tools involved.
- Worldwide Support - Payoneer supports over 200 countries and 150 different currencies. This is a huge number of supported currencies. For the sake of comparison, PayPal only supports 25 currencies.
- Easy Access - You can withdraw funds from any ATM with a Payoneer Mastercard. This is great for those who need immediate access to funds rather than waiting on a transfer.
Great Customer Support - Payoneer has a good customer support system with offices in several countries. Support can be hit or miss with all companies, but the general consensus is positive for Payoneer.
- ATM Withdrawal Limit - While it is convenient to access funds with the Payoneer Mastercard, keep in mind there is a daily withdrawal limit of $2500. The fee structure also includes a foreign exchange fee of 1% of foreign transactions.
- No Third-Party Transfers - Payoneer can only make and receive transfers from other Payoneer accounts. If you want to do business with a client, they have to use Payoneer to make a transfer. This could be an issue if they do not want to open an account.
- Fees - Payoneer charges 2-2.75% of the amount on an international transaction. They also charge an annual maintenance fee for using the Payoneer Mastercard. These fees are on the high side when you include the currency conversion charge.
- Sign-Up Process Can be Long - The process of signing up for a Payoneer account can be quite lengthy. Many times you may have to wait as long as a month to receive your Payoneer Mastercard. This is highly inconvenient when you plan on using Payoneer for your business.
There are some good things about Payoneer and some not-so-good things. The flexibility to be able to make and receive international payments from 200 countries is very convenient. The transaction fee and inability to make transfers involving third-party accounts are not. The currency conversion fees are quite high as well.
Payoneer does offer service in many countries that PayPal does not, though. This makes it a good option in many use cases. If you have international customers, you just may find they are in a country not supported by PayPal.
Payoneer Vs Paypal: The Decision
So, now we have looked at the pros and cons for both Payoneer and PayPal. We should have a final verdict then, right? Well, almost, but not quite. Paypal is a great option for businesses. Some will be best served by Payoneer, though.
It boils down to where do you primarily do business. If your business involves a lot of international transactions, Payoneer is a strong choice. They handle international money transfers to a large number of countries. They handle the exchange rate for at least 150 different currencies. They do charge a fee on the amount of a transaction involving foreign exchange rates. Still, they do at least provide strong support for making such payments.
Paypal only supports 25 currencies, rather than the 150 currencies supported by Payoneer. This is a massive difference when it comes to foreign exchange. This puts Payoneer firmly in the driver's seat when it comes to international transactions.
If an international transaction is not as frequent for your business, then you will most definitely be best suited with PayPal. The payment method selection is impressive, and while transfer fees can be high they are not egregious. The PayPal Cashback Mastercard is a nice bonus along with the PayPal debit card.
PayPal's integration with so many third-party tools is another big bonus. If you are in e-commerce you can instantly add PayPal as a check-out method. This can be done with WordPress, Shopify, and other platforms.
The PayPal website is also very clean in design, and intuitive to navigate. The user experience of PayPal's website is far superior to that of Payoneer.
PayPal Vs. Payoneer is a battle between two payment processing services that erve two different markets. Both companies do offer similar products, but it’s important to understand what each company does differently.
PayPal focuses solely on online commerce with flexibility in mind. The integration between PayPal and third parties is impressive. However, both companies have their strengths and weaknesses.
Your choice should depend on what kind of business you run. You need to decide whether or not you need the flexibility of being able to do international transactions efficiently. If so, then Payoneer is probably the way to go.
When it boils down to it, each has its specific use case. Each has its pros and cons. But, if we had to crown an overall winner in this battle, the title would have to go to PayPal.
If this was helpful, check out some of our other articles in our resource hub.