A practical guide to Payoneer vs PayPal global payment service

Payoneer is primarily used as payment receiving channel for services exported outside the country. Payoneer payment service has a great feature of providing its user with a master card debit card. 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 .

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.

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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.


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.