Let's Talk about Payoneer
Payment solution
In India, Payoneer is primarily used as payment receiving channel for services exported
outside the country. Outside India, Payoneer
payment service has a great feature of providing its user with a master card
debit card. However, in India, its barred
by RBI from doing so till the time of writing this article in 2018. Instead of what it offers is a direct payment into the local bank account,
which is also okay. The difference with
the debit card that it provides abroad versus
local bank payment in India is the time delay in accessing the money once it
arrives in the Payoneer account.
Abroad , via this
Mastercard debit card , one can instantly draw out cash from any available ATM
, once the money has been credited by the merchant. However, In India, users of
Payoneer should be ready for two bottlenecks
even if the payment has arrived in your Payoneer account.
Beware of landing charges that is not in hands of payoneer
First is the landing
charge that your banks in India charge, to allow incoming amount from Payoneer.
Then it may refuse the incoming amount owing to security reasons as it's from abroad. Banking holidays or non-business days can also stretch the time of
actual payment of the Payoneer amount into your bank account.
For
major well-known private banks
like ICICI, HDFC, there is a well-documented
policy for receiving payment from
Payoneer and it's generally quicker than state-owned banks like SBI.
Caution
In India you cannot use the money lying in your
Payoneer account, even if you are able to view it. You will be able to utilize
it only after it's transferred to your local bank account.
While creating a free account in Payoneer
When you create an
account in Payoneer, be careful to input the proper e-mail, because all your
future correspondence from Payoneer will be to this e-mail.
Please note, having
PAN card details and Adhaar details are
mandatory for creating an account in Payoneer.
Select "Global
services" when you create an account
in Payoneer and give your bank details for an account
that will be used for receiving payment.
Note, Payoneer is
primarily used in India by the freelancers for receiving payment from freelance
websites like Fiverr, Upwork, 99 designs, Gettyimages.
Practical use of Payoneer in India
It is also used widely
for receiving affiliate service payments from amazon.com or rental payment from
Airbnb.
In India, you cannot
send payments (only receive from abroad) via Payoneer and this is one crucial
point which differentiates it from Paypal.
Paypal is an e-wallet while Payoneer is purely a currency
import channel.
Let's take here the
case of inward USD payment as this is the most popular payment currency for normal exported freelance jobs through marketplaces like Fiverr, People per
hour, Upwork, Freelancer, Getty Images.
Very Important: Partner Network- Payoneer
If you intend to get
your money through Payoneer, for exported
services, please be careful to only select the Authorized partners of Payoneer.
Payoneer has a partner
network of merchants who use it's integrated, famous "Mass Payout Payment"
system for payments .In this mode, the authorized partners do not run to banks for each and every transaction individually.
A mass payout to the authorized Payoneer
bank account is made by the "Whitelisted" merchant in lieu of a host of services accepted/ received
by those firm.
After
the mass payout, it then selects each of the service providers it intends to
make the payment to (with the amount each should get), from the Payout Page of Payoneer,
and enters "Pay". This will
enable automatic credit of that amount into the Payoneer account of that
selected service provider, who in the Indian context, will most probably be an
Indian freelancer.
For
payments through Payoneer, as an Indian freelancer , only use it for those
clients who are already a part of Payoneer Mass Payout feature. Do not worry ,
al the big merchants for whom Indians normally do freelancing or affiliate jobs
e.g. Fiverr, Amazon, Upwork .etc, are
already part of Payoneer Mass Payout partner network
Do
not use this payment method for money transfer from individuals abroad, who are
not part of "Whitelist" of "Payoneer ".
How to register yourself with a merchant in Payoneer for its Global Pay system ?
If
you wonder how you will register for a
client abroad, use the Bank name, Account type, Account number and Routing code
of the virtual US account (that Payoneer creates for you when you sign up for
global payments).
Virtual US account by Payoneer for clients in India: the secret of lower charges
This
virtual US bank account, which in many cases is created in Bank Of America, is
the main driving force for the cross-border payment through Payoneer. Clients
in the USA simply deposit the money in this local virtual bank account via Payoneer,
which is then transferred to your local Payoneer account under ACH (American
Clearing House) rules.
Fees/ Charges of Payoneer
Next
comes the question of fees. The fees of each marketplace vary and it's better
to check the fees from relevant marketplaces. Payoneer has a host of
marketplaces like Upwork, Truelancer , Freelancer, Shutterstock , Adobe,
99designs, People per hour , Fiverr, Envato, Toptal.
Check
out the fees for Payoneer from these individual marketplaces.
If
the money is deposited in the Local US virtual bank account, it falls under the
Global Payment services category (Applicable for Euro, USD, GBP (Great Brain
Pound), JPY (Japanese Yen) ), its free.
If
you intend to receive money from customers directly via credit cards its
charged at 3%. Avoid this type of payment.
Better
use the popular marketplaces for freelancing jobs . They have a fixed
transparent policy and because of mass payout, are timely in paying your fees
without hassles.Remember, Payoneer is tailor-made for such type of mass payouts
by such papular marketplaces like Freelancer.
Next
, after the money is deposited in the Payoneer account , it has to be converted
from USD (Or Euro, GBP) to your local currency. Here, Mastercard ongoing rates
for currency is taken as reference with 2% commision above the mid-market rate
for currency at that moment. This 2% commision above the mid-market rate is
considerably lower than conversion rates charged by Pay Pal.
Please
check out the charge when it's being deposited in the bank from the Payoneer
account apart from the landing charges deducted by the bank. Also, keep the
taxes or GST in mind while calculating the amount you receive.
Beware
of the yearly fees for Payoneer account. Its supposed to be 29.95 $ and is
deducted from your account whenever it reaches 30$. But wait, this is supposed
to be for the debit card. And India does not allow debit card from Payoneer .
Search for the basic account in Payoneer which has no debit card (Automatically
applicable for India ) and no annual charges.
That’s
sums up the fees charged by Payoneer.
In
Payoneer , there are no extra Transfer fees/charges that Pay Pal deducts when
the client sends money, in exchange for services provided by you from
India, from his Payoneer account.
Now PayPal
Pay
Pal is an e-wallet which also allows you to buy from its registered merchants.
Pay
Pal also allows accept and import of fees for freelancing jobs or goods exported.
You can shop in Paypal. This differentiates it from Payoneer because it does
not have an Indian marketplace to offer, where you can buy goods via Payoneer
payment.
Marketplaces
are the aggregators offering a particular type of service like ticket booking
in different sectors , or freelancing jobs, service in the food and beverages
category etc.
It needs
not be said that the corresponding Indian merchant must have the facility of
payment through Paypal integrated in his website.
Creating account in PayPal: Some reminders
E-mail
is very important in PayPal, so provide proper E-Mail which is secured and you
access regularly.
Also,
PAN card and Bank Account having account name same as your PAN card is required
In PayPal sign in form, fill it up as individual and
your name should match that with your bank account.
Do
not share your debit/credit card details with Pay Pal while filling the sign in
form, as you will be using your bank details for remittance.
You
have to go the e-mail account you have given during registration in Pay Pal and
select the activation link from there.
During
sign in, the process will need a number of information like the nature of your
business, bank details etc. Go to Task Board tab at the bottom of the site to
return to unfinished sign-in page.
Provide
P1007 "Other Business Services-> Advertising and Market
research" Purpose Code for bloggers and P0802 for Software jobs provided to
abroad clients. Please note Purpose Code cannot be used for payments of jobs
within India.
Do
not forget to "Confirm" the values/amounts that had been added to
your bank account by PayPal for checking purpose. Only then will your bank
account get added to your PayPal account for credit.
One
advantage of using PayPal is that you do not need to give your credit card
number or do not need to have one for online shopping or receiving international
remittance.
Payoneer
provides the same advantage minus the
shopping facility and at a slower pace because its transfer involves ACH.
Now what you get as output from the international payment: PayPal verses Payoneer
The
conversion rate of Paypal is much lower (lower in a profitable sense) than
Payoneer. Payoneer uses the mid-conversion rate (Master card rate) -2% as for conversion
charges .
Paypal currency conversion rate is much lower at
Ongoing Currency Conversion Rate(Say current rate is 1$=Rs. 64.- (3-4% ). It comes to about 61.5 $. This
is the rate you get for conversion to Indian Rupees from PayPal. On top of it, PayPal charges(
3.9% - 4.4%) +.30 $ as its service fees (known as Transfer/Transaction
charges).
At first,
the transfer fees of PayPal (as mentioned above) is deducted from the full amount provided by
the merchant.
Then the conversion is done from USD to INR at
rates typical to PayPal which is about minimum 2-2.5 $ below the prevailing market
rates. For Payoneer, the conversion rate for USD is at minimum 1 $ more (Prevailing Currency Conversion rate-2%)
than the PayPal rate. Yes, that's 1$
more in currency conversion Payoneer for every dollar you have earned !.
Transactions
done in Paypal, to receive money from abroad, has a limit of 10,000$ per
transactions.
PayPal security for account holder
PayPal
has an excellent feature of just sending your PayPal e-mail details to the
remitter (instead of bank accounts or other details), as the location to where
he should send then money. PayPal does the rest for you , while the remitter emits
the money at the mentioned e-mail address in the "Send to" page of
PayPal.
PayPal
exchange rate is lower and service charges higher, but so is its acceptability.
However, Payoneer payment is from a newer generation. Try both of these to see
which one is faster and do not keep you waiting midway. Payoneer suffers from a
lack of reassuring helpline, instead sending you automated responses ignoring your
frantic calls for help. It also suffers from lack of info when your money is in
Payoneer account and is not being
transferred to the bank. So on one side, Payonner gives you better output from
the money you have received from abroad in USD or EURO, while PayPal has better
efficiency in delivering that money but this comes at higher costs to you.
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