Payoneer and PayPal: Everything You Need to Know About Online Payment Platforms

In 2023, financial technology has become a trendy niche that almost everyone invests in. Over the past year, the total value of transfers worldwide has grown to $135.2 billion. According to Statista's forecasts, the CAGR will remain at 6.59% until 2027, which will positively impact the market size, reaching $174.5 billion in 2027. 

The total value of digital transactions has already reached $9.46 trillion, and by 2027 it will reach $14.78 trillion with a CAGR of 11.8%.

The catalysts for this industry development are primarily top payment solutions such as PayPal and Payoneer. They not only provide global payments but also ensure top-notch security practices.

We’ve researched the question "Is Payoneer better than PayPal?" and are ready to share their results. From the material, you can:

• Learn the difference between Payoneer and PayPal.
• Compare Payoneer and PayPal in detail.
• Determine: PayPal and Payoneer, which is better in my case.

Payoneer: An In-depth Look 

The Payoneer system was launched back in 2005 with the support of prominent IT figures such as Elon Musk. Despite its rapid launch and media hype, Payoneer failed to become a trendy payment system. According to Similar Web, Payoneer is ranked only 4,632nd in the global Financial Planning and Management category.

However, the system is quite advanced regarding technology and commission policy for its users. Moreover, the payment platform operates in over 200 countries and supports about 150 currencies.

Payoneer features:

• Users and businesses can transfer funds, make payments (ecommerce), and even manage internal system accounts, digital cards, etc. 
• A subscription model is supported (monthly payroll, for example). 
• All transactions within Payoneer are not subject to commissions. 
• The card issuance process is long since it is done manually, guaranteeing the transaction's security. 
• The annual fee is $29.99 for using the Payoneer Mastercard.

It is believed that Payoneer's key competitor is PayPal, a payment system with the same rich history and functionality. However, the platforms offer slightly different features for users and businesses. So let's take a look at how Payoneer is different from PayPal. 

PayPal: An In-depth Look 

The PayPal system was created in 1998 and quickly gained users' loyalty worldwide. The geography of the payment aggregator is constantly expanding, as are its operational capabilities. Similar Web says PayPal ranks 67th in the Banking Credit and Lending category. According to 6Sense, it holds about 31.14% of the payment system market.

Accordingly, this shows which is better between PayPal and Payoneer. Moreover, PayPal is a combined platform that simultaneously includes a payment gateway and a processor, creating organic and independent conditions for financial transactions. It supports about 200 countries and 26 currencies.

PayPal features:

• PayPal allows you to send and receive payments without authorization on the platform.
• All popular methods and sources of transactions are supported, including PayPal Credit, i.e., installments.
• PayPal Invoicing is available: the system monitors invoices and checks them for completion of payment transactions.
• There are no annual fees for using cards.
• Businesses are offered a PayPal Business Loan: a loan based on the company's potential.

The most vital point in the Payoneer vs. PayPal comparison is the payment process and account security. In addition to multi-factor authorization, the platform has a state-of-the-art anti-fraud system. For example, if the product does not match the description, PayPal Purchase Protection guarantees a full refund.

Now, let’s see a detailed Payoneer and PayPal for online payment comparison on each platform's key characteristics, advantages, and common features.

Comparing Payoneer and PayPal: Similarities and Differences 

Both these payment systems have been operating in the financial technology market for about 20 years and have gained the loyalty of their audience. Although the platforms share similarities, certain differences impact how users and businesses interact with them. 

The key difference lies in the positioning of companies in the industry:

• In addition to regular financial transactions, PayPal also provides extensive business lending opportunities and merchant accounts. 
• Payoneer, in its turn, simplifies the processing of domestic and international payments, creating more comfortable conditions for entrepreneurs to scale their businesses.

Depending on your needs, one system may be more profitable than the other. Look at the table comparing Payoneer transaction fees vs. PayPal payment commissions and a few differences between the products. 

Let's take a closer look at several features of the systems and compare them.

PayPal vs. Payoneer pricing fees comparison

The main difference lies in the pricing policy for issuing and servicing a Mastercard. PayPal does not collect any fees for these services. The card issuance takes from several seconds to a day for a registered and verified platform subscriber.

Payoneer charges a card usage fee of $29.99 annually but with one crucial nuance. The fee is waived only if no card transactions are recorded for a certain period, i.e., the client pays for inactivity rather than for use. In addition, the process of issuing cards via this payment system is quite lengthy, as each application is processed manually by the platform's specialists.

Payoneer vs. PayPal exchange rate

You should be prepared to pay more if you often need to convert currencies between your own accounts or make multicurrency transactions. PayPal charges about 3.5-4% of the exchange amount, regardless of whether you convert internally in your own account or send money for goods or payroll.

Payoneer is much more affordable when it comes to conversion fees, with a margin of 2%. Accordingly, it is better suited for international payments with a streaming currency exchange. At the same time, the multicurrency capabilities of the payment system are more powerful than PayPal (150 currencies vs. 26).

Transaction processing time and cost

If we compare PayPal vs. Payoneer payment processing, we can understand the core point: each platform has advantages and disadvantages.

PayPal charges 2.7%-2.9% per transaction, regardless of its type. Also, 30 cents are added when sending, and the cost of receiving the service is fixed. At the same time, the transaction is processed from 0 to 3 days, depending on the system load.

Payoneer has a more flexible fee system, which ranges from 1% to 3%, where 1% is charged for an ACH transaction, 2% for a transaction to another bank account, and 3% for a credit card transaction. There is no additional fee if the transaction is made between Payoneer accounts. The processing time is 1–2 days on average.

When Is One or Another System Used?

Depending on the market you work with and the number of transactions you conduct, you will need a specific payment platform because of its capabilities. For example:

• If you need to pay salaries in bulk or order foreign goods, Payoneer is the best option. Despite the limit of 200 payments at a time (PayPal has a limit of 10,000), this payment system works with 150 currencies (versus 26 for PayPal). It is an ideal choice for international business.
• If you want to protect your funds and all financial transactions as much as possible, choose PayPal. In addition to a money-back guarantee and account security, PayPal offers instant refunds in all proven fraud cases.
• If you need additional business opportunities, Payoneer and PayPal will provide them for you. The only difference is in the methods, terms, and lending amounts.

The key advantages of a particular system sometimes become its disadvantages. This is especially true when combining payment platforms to maximize transaction flexibility and reduce transaction costs.

Conclusion

Payoneer and PayPal are reliable and progressive payment platforms that offer many opportunities for businesses and ordinary users. Each has its advantages and disadvantages, which can be crucial when choosing a permanent system for transactions. 

• Payoneer will provide you with the best rates and transaction flexibility if you work with international financial transactions.

• If you are focused on the domestic market, for example, the United States, PayPal will offer you faster transactions and fraud protection.

The choice of a payment platform depends on the needs of the business, so each entrepreneur has to decide on the system that suits their business. 

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