With its focus on business transactions, Payoneer is a distinctive company when it comes to international money transfers, not just offering foreign payments but also providing various business services such as multi-currency virtual accounts. But it’s not the only option out there.
Each of the following different companies is set up in a different way, and each has its own set of fees and costs. But when you’re dealing with international transfers, the exchange rate is one number that it really pays to keep your eye on. When banks and many remittance companies operate among themselves, they’re able to use the mid-market exchange rate - but when they charge their customers, they very often set a less favorable exchange rate and pocket the difference.
Anyhow, here’s a look at a few of the leading alternatives to Payoneer. Take a look, and see if one seems right for you and your business.
Founded in 2011, Wise isn’t just for businesses, but also for anyone looking to send money across borders while avoiding hefty bank fees. The concept behind Wise is simple: by using a system of local bank accounts in countries all around the world, it doesn’t have to rely on costly and slow international bank transfers to pay people money in different countries. You can just pay into a local bank account in one country, and receive the money from a local account in another country, with no intermediary banks getting involved.
This means that Wise uses the mid-market rate on all its transfers and it doesn’t make any money out of the exchange rate. The only cost when transferring money is a simple upfront fee based on the amount you’re sending.
All of that is available to businesses as well as individuals which means paying unnecessary fees for every single international payment can be a thing of the past. And with a borderless multi-currency account, you can hold your money in dozens of different currencies and transfer it to currencies around the world whenever you like.
Like Payoneer, the borderless account offers virtual details in several different currencies - US and Australian dollars, euros and pound sterling - so that, when you have money in the account, you can send and receive payments with ease in any of those currencies. It’s then quick and cheap to withdraw money into a bank account. And there’s no monthly fee for the borderless account. A new Mass Pay tool is now available to businesses to facilitate payments, as well.
PayPal is a very well known finance company, and it’s no surprise that they too offer ways for businesses to make international payments. As having a PayPal account is so widespread around the world, this can be a convenient option. But do make sure to check the fees.
PayPal’s business offerings differ slightly from country to country, and they offer many different services, from payment solutions to invoicing.² But when it comes to international transfers, it’s important to check the details. The costs with a business account can be different from paying privately, and according to an independent analysis,an international business transfer could cost up to 8x as much via PayPal as via Wise.¹
So, while there’s no fee to open up the account, that doesn’t mean it won’t cost. That cost could be made up of a variety of things, from currency conversion charges to recipient fees.³
Still, the range of different features that come with some PayPal business packages, as well as the simple name recognition of the company, means that there are nonetheless reasons to consider a PayPal business account. Just make sure you know what it’ll cost you and your business.
A little bit like PayPal, Skrill (formerly known as Moneybookers) offers a way for online retailers to process online payments, as well as letting people pay each other online without needing bank details - just an email address is enough if both are signed up.⁴ And yes, they offer international payments too.
Skrill has a system of ‘wallets’ for transfers: you send money from one wallet to another. If your recipient doesn’t have a wallet, you can also send money straight to their bank account.⁴ What about the fees? There are a variety of potential ones - you could be charged for uploading money into your account, sending it, and having it converted into the new currency.⁵ The recipient might also have to pay money to take the money out of their ‘wallet’. And, of course, there’s also - as always - the exchange rate to factor in.⁵
Skrill’s main business offering concerns its online payment solutions. Perhaps especially if you also use Skrill for that, it could be worth considering for international transfers too.
Neteller offers a similar suite of products, processing payments online as well as handling international transfers. With a virtual Neteller account, you can pay anyone with an email address, even without bank details, and it’s then down to them to get hold of their money from Neteller.⁶ As a business, you might be particularly interested if you’re also looking to integrate another online payment system.
Neteller has a complex system of ‘VIP’ membership, from ‘bronze’ up to ‘diamond’, and the rate they charge varies depending on what level you have.⁷ A number of other fees also vary according to your level. Your level itself is dependent on how much money your company handles per calendar year - the bigger the number, the lower the rates.⁷
Fees with Neteller also vary considerably depending on how you upload money into your account: it costs one amount to deposit money via Visa, for instance, and another amount via a Santander bank account.⁸ Finally, costs also vary depending on how you withdraw the money from your Neteller account.⁸ In all of these cases, the charge is generally a percentage cut of the amount you’re depositing or withdrawing.
While the fee structure is somewhat complex and might be hard to predict if you’re likely to need to use a mixture of different payment and withdrawal methods, benefits to Neteller include their ‘virtual prepaid MasterCard’, as well as their online payment facility.⁹
Payza is another company involved with e-commerce, and as well as consumers it targets online businesses, offering services including online invoicing and mass payroll payments. Both personal clients and businesses use their e-wallet system to store money virtually, and you can operate in numerous currencies from around the world, although they do add a markup on the exchange rate.¹⁰
As is common with companies offering wallet-like online payment systems, Payza may charge various fees to add, receive or withdraw money, and currency conversion comes at a fee of 2.5%.¹¹ So, while they advertise zero fees for sending money from one place to another, that’s not the full picture - the fees are simply placed elsewhere. However, they support various less common currencies, and if you’re interested in experimenting with Bitcoin this could be a good option, as Payza lets you withdraw funds into the famous cryptocurrency.¹¹
Based in London, World First has a focus on higher-value transfers - the minimum amount you can pay through World First is USD 1,000.¹² So it isn’t ideal if you ever need to make smaller payments, but that point aside, it offers a range of useful business services including bulk payments and ‘forward contracts’ - transfers booked in advance.¹³
When it comes to personal transfers, World First don't have fees on transfers and for businesses the fee depends on the amount of business that they bring.¹² But they don’t charge the mid-market rate, as they state on their website, so it’s another case of ‘no fee’ not really meaning no fee: there’s a different sort of fee hidden in their exchange rates.¹²
For business clients, their website says ‘there are fees’, so you’ll likely be facing additional costs if you want to use World First professionally. You’ll need to talk to someone to find out further details.
Entropay specializes in what it calls ‘virtual Visa cards’, which let you make all manner of online payments, including international payments.¹⁴ Effectively it’s similar to some of the services described above, but with a focus on using the account in the same way that you might use a credit or debit card online.¹⁴ And for businesses, they offer various products targeted at the small- to medium-sized market.
They also offer EntroPay Purchasing, which is designed for businesses: this helps you manage spending, again via flexible prepaid ‘cards’, this time using MasterCard.¹⁶ Other services include EntroPay Payout, through which you can pay freelancers or suppliers internationally without having to go through the banks.¹⁷ Unlike World First, there’s no minimum transfer amount.
Like some of the other services discussed above, there are a variety of fees for different aspects of the process: while online purchases themselves are free, there are costs for things like currency conversion, paying in foreign currencies, and withdrawing or receiving money from a bank account.¹⁵ So while it might be useful for your business to have a set of virtual cards for online payments, there will be fees to pay at various stages of the process.
All the above options offer a different combination of services for businesses, some with more of a focus on international transfers and others with the focus more on online payments in general, or in managing budgets. As you’d expect from an area of the market that’s changing so rapidly, there are many different approaches to pricing, especially for the business packages.
Therefore, there are a few different points to bear in mind before you sign up. Firstly, you should check how many different potential costs there are: does it cost to deposit money in a virtual account, for instance, or to withdraw money at the end? Are there different costs depending on how you deposit or withdraw? Is there a ‘dormancy fee’ that you end up having to pay each month if you stop using the service? And if you’re using the service to pay suppliers or freelancers, what exactly is going to be expected of them at their end once you’ve paid them: are they going to have to sign up for a service they don’t want to use, and then have to pay a fee to access their money?
If you’re looking at these options because international payments are a particular concern for you and your business, there’s another key question to bear in mind: what does it cost to convert money into foreign currencies? This simple question is at the heart of a service like Payoneer, and a lot of the alternative services discussed above - but the answer isn’t always what you might hope it was.
When banks exchange money between themselves, they often use the mid-market exchange rate - an average of all the different exchange rates in use. But when they and most other services convert money for a consumer, they use a different rate - one that’s less beneficial for you, and better for them. So whenever you consider paying money in a foreign currency, it’s vital to think carefully about the exchange rate you’re being offered and to compare it to the mid-market rate, because often you’ll find that through charging a worse rate, you’re really paying an extra, hidden fee. The best thing to do is to keep an online currency converter close to you at all times so that you can quickly see how much your business’s money is really worth in a foreign currency.
1.https://wise.com/us/blog/paypal-business-account (October 1, 2018)
2.https://www.paypal.com/cy/webapps/mpp/merchant (October 1, 2018)
3.https://www.finder.com/paypal-international-money-transfers (October 1, 2018)
4.https://www.skrill.com/en/transfer-money/international-money-transfers/ (October 1, 2018)
5.https://www.skrill.com/en/siteinformation/fees/ October 1, 2018)
6.https://www.neteller.com/en/features/money-transfer (October 1, 2018)
7.https://www.neteller.com/en/vip/overview (October 1, 2018)
8.https://www.neteller.com/en/fees (October 1, 2018)
9.https://www.neteller.com/en/features (October 1, 2018)
10.https://www.payza.eu/available-currencies (October 1, 2018)
11.https://www.payza.eu/fees (October 1, 2018)
12.https://www.worldfirst.com/us/support/faq/ (October 1, 2018)
13.https://www.worldfirst.com/us/business/products-services/ (October 1, 2018)
14.https://entropay.com/faq (October 1, 2018)
15.https://entropay.com/pricing (February 28 2018)
16.https://business.entropay.com (February 28 2018)
17.https://business.entropay.com/payout/ (February 28 2018)
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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