Payoneer vs Paypal vs Wire Transfer vs Western Union: How to Pay Anyone in Any Country

If you’re hiring staff around the world you might have encountered the problem of how to actually pay them!

If you are using our software Time Doctor this might be a problem that you have encountered. Many companies use Time Doctor to track time for people working from home from countries like the Philippines, India, Russia or Ukraine. These companies also are looking for an easy way to pay these contractors that are working from home.

So this article is written for the situation where you have someone working from home in a foreign country and you need to pay them. If you are sending money to a friend or relative some of this advice will still apply, but the focus of the review is for paying people working from home all around the world.

Which method should you choose?

Western Union

Western Union

Western Union has a very wide reach and often considered to be a high cost option, but they are not necessarily high cost in comparison with PayPal. They have a fairly straight-forward online transfer process, and the fees are not too exorbitant when sending from the US. Western Union is a great option if your recipient does not have a bank account, but it’s not a convenient option for the recipient to need to collect the money in cash for each transfer made.


PayPal

PayPal

PayPal works reasonably well for countries such as the Philippines, but it’s not a great option for Russia or Ukraine for example. The fees for PayPal are much lower if the transaction is considered a transfer to a friend or family member. PayPal is a fairly low cost option when money is transferred within the US, but the costs go up significantly for international transactions. PayPal also have a less expensive mass payments option for businesses that are paying several people at the same time.


Payoneer

Payoneer

Payoneer is a good option for transferring money if you can get a relationship with them. They have the ability to send out a debit card which allows the user to withdraw money from an ATM machine wherever they are located. Payoneer is only available through selected partners.

For example oDesk, Freelancer.com and Elance all have a relationship with Payoneer to send and receive payments. Payoneer has minimal fees for partners, there are some fees for the recipient for withdrawal from ATMs and for each load onto their card. If you have a large number of employees you might be able to get a business relationship with them.


 

Other options:

Xoom
Xoom

Xoom is a lower cost method of sending money to over 30 different countries however they have banned commercial payments from businesses to workers so this is not an option.

Payments.ph
Payments.ph

Payments.ph is a low cost option for sending money from a US bank account to the Philippines. Costs only $4.99 per transfer (plus currency conversion).

OrbitRemit
OrbitRemit

OrbitRemit is a low cost option for sending money from the UK. Costs £5 for transfers up to £200 and £7 for transfers over this amount.

RemitHome
RemitHome

RemitHome is an option for sending money from the US to the Philippines and costs $10 per transfer (plus currency conversion).

Skrill
Skrill/Moneybookers

Skrill, formerly “Moneybookers”, does not currently offer an option to upload funds from US bank accounts which means it is not an option for transfers from the US. But it is a reasonable alternative for withdrawals from various countries in Western Europe.

Wire transfer – always an option, but it costs money both for the person sending the money and for the person receiving the money. It only starts to become cost effective for larger transfers.

Local bank accounts – if you pay a lot of people in one country then a low cost method is if you have a bank account in that country you can organize a local transfer to all of the recipients. So you can do one wire transfer in and then multiple local transfers to the recipients. This obviously assumes that you are able to get a local bank account and that you have multiple people in the country.

 

Currency conversion – the Hidden Fee!

Most of these transfer options make some of their money from currency conversion. This is often a hidden fee so it can be hard to find out exactly how much is charged. The currency conversion fee varies usually from 1% to 3%. If you are unsure of the fee you can calculate it yourself by finding out the currency rate that you are getting for the transfer and comparing it with the interbank rate. You can find the interbank rate here.

So for example let’s say you would like to convert using Orbitremit from pounds to Philippine pesos. The rate on the Orbitremit website is 66.000 and the interbank rate is 66.6941. The difference is approximately 1% meaning that they are charging you a 1% currency conversion fee.

 

Comparison table of the costs of transferring money

Calculating the exact transfer fees is quite complex as there are several fees involved in any transaction. For example if you send money to the Philippines from the US using a wire transfer, you will have fees for the wire itself, but you will also need to consider the currency conversion fees. We calculated the fees based on the minimum payable if you take the most cost effective withdrawal option. We chose the Philippines, India and Ukraine as three of the most popular countries to hire work-from-home offshore contractors (you can hire very talented developers in Ukraine for example).

  Name

Fees to send $250 from the US to the Philippines

Fees to send $250 from Australia to the Philippines

Fees to send £160 from the UK to the Philippines

Fees to send $250 from the USA to India

Fees to send $1000 from the US to Ukraine

PayPal

  $16.3   $16.3   £10.44   $16.3

No easy way to withdraw the money

PayPal Mass Payments

  $11.25   $11.25   £7.2   $11.25

No easy way to withdraw the money

Western Union

  $11   $15   £10.9   $8.5   $12

Wire transfer

  $32.5   $37.5   £24.8   $32.5   $40

 

Notes re: this fee comparison table

It is very hard to directly compare fees because there are multiple fees charged for different situations.

Paypal – normally costs 3.9% plus 30 cents and 2.5% currency conversion to the Philippines and India. With the Mass payments option the 3.9% is reduced to 2% but the currency conversion stays the same.

Western Union – when we researched this table they had a promotion for payments from the US, so the costs were actually much lower. The cost for US to the Philippines was only $5, for the US to India was only $2.5 (free transfer and the fees were for currency conversion only). The currency conversion in Ukraine is estimated (it’s actually possible to withdraw US dollars in Ukraine and then convert it at a cost of roughly 1% in any case)

Wire transfers – the cost varies significantly for each bank. This table assumes a low fee of $15 to send and $15 to receive. It can be higher than this. We also added a minimum 1% currency conversion fee from the receiving bank for US dollars and 3% for other currencies. Actually currency conversion fees are usually higher than 1%, but in the Philippines and Ukraine because the US dollar is commonly used in the local economy, banks in these countries have reasonable currency conversion fees.

 
About the Author:

Rob Rawson is a co-founder of Staff.com, a global recruitment platform where you can access very talented staff at affordable rates. They also have a technology called Time Doctor which is software to improve productivity and help keep track and know what your team is working on, even when working from home.

Rob resides in Sydney, Australia but can also be found in major cities around the globe, like Paris, Kiev or San Francisco.

Find Rob on Google Plus

 


19 Comments

  1. Freddy September 9, 2014

    Have you checked out Payoneer? Get paid directly to your very own Payoneer Prepaid Debit MasterCard Card, available to over 200 countries worldwide!

  2. Shamir September 7, 2014

    Among these three, I’d totally go with Payoneer any day of the week. I’ve been using it for almost a year now and it’s really good IMO. :)

    • KAYDEE September 17, 2014

      YO I AM IN UKRAINE . CAN YOU GUIDE ME AS IN HOW TO CREATE MY PAYONEER AND HOW LONG IT TOOK YOU TO RECEIVE THE CARD?

  3. Paul C September 6, 2014

    Might want to update those bank fees: Chase and my local credit union both charge $45.00 per transfer. I sent money to a friends bank account a few months ago from USA to Kenya. I transferred $100 – and paid two “fees” $10 & $7 for a total of $17 + probably hidden % in the dollar to Kenya Shilling exchange rate.

  4. Francia Bengco August 12, 2014

    Hi, would like to ask about your experience with Payments.ph. They use Ko-Kard for receiving remittance payments. I have read bad reviews about it. I have personally experienced extremely delayed payment and this is my very first time to use Ko Kard.

    • Rob Rawson Rob Rawson August 13, 2014

      We actually have an integration with Ko-Kard planned for Time Doctor. I know that they are a genuine and honest company and would definitely complete all their payments. I can’t comment on the specific situation that you had with them.

  5. Chris July 16, 2014

    I will prefer to send payments via Payoneer https://www.youtube.com/watch?v=30yvGodnbN8

  6. Alyshan May 3, 2014

    Hello

    Can i receive Euro In My Payoneer Account?

    Thanks

  7. adynfbm April 21, 2014

    im from the philippines, i got my payoneer card 3months ago., and still i cant use of it. . i want to use it on my online casino and shop payments. . but i dont have any idea where and how to load money on my payoneer debit card. . do i need to deposit money first on my debit card so that i could use it for online payments?? please help. . .thanks and more
    power

    • Biz3.0 Admin Biz3.0 Admin April 28, 2014

      Hi,

      It would be best if you approach Payoneer support with your problem. You could do so here: http://www.payoneer.com/ContactUs.aspx

      Thanks.

    • Adam Smith June 8, 2014

      *** I think payoneer is designed to received payments from US-based partner companies. However, they have a service call Private Load Service but requires approval. See details below from their FAQ page.

      Can I load private funds onto my own card?

      Payoneer does offer a Private Load Service, which allows you to load funds to your card using Visa or MasterCard. Additionally, US residents may fund their account using a US bank account.

      Note: limits and restrictions apply when sending and receiving private loads.

      =========================

      Credit Card Loading to your Card

      Flexible Payment for Freelancing & Affiliate Work

      Whether you are a freelancer or an affiliate, quick and flexible payment is critical to your success. With Payoneer’s Credit Card Loading Service, money can be easily loaded to your Payoneer account anytime. It is a secure, flexible way to receive earnings from individuals and companies.
      How to Determine Eligibility

      Our Payment Approval Department reviews each individual credit card-load card to determine its eligibility – this step is critical in protecting the security of our users. Payoneer reserves the right to decline credit card loads, and to apply specific requirements and limitations on a case-by-case basis. As a prerequisite of approval for the Credit Card Loading Service, you must have an active Payoneer account that receives payments from any of Payoneer’s official partners or the U.S. Payment Service.

      Benefits of the Credit Card Loading Service

      – Receive payments via Visa, MasterCard®, or U.S. ACH (for U.S. cardholders only)
      – Funds available within two business days of approval
      – Use your Payoneer card to make purchases online, in stores, and at ATMs worldwide

  8. Harsh April 19, 2014

    Thanks for such valuable info. I was actually confused a bit while chosing the best way to get payments in India.
    Thanks a Lot! :D

  9. Sandy March 15, 2014

    Hi, how about payoneer fees?

    • Rob Rawson Rob Rawson April 3, 2014

      Payoneer fees do vary a bit depending on the partner. One thing to realize is that Payoneer only likes to partner with reasonable sized partners, I think their minimum is $10k per month in transfers

      • KAYDEE September 17, 2014

        as in 10000??

        • Rob Rawson Rob Rawson September 18, 2014

          That’s the minimum for companies not for individuals. Individuals can transfer small amounts no problems. But the company that is paying them must be of a certain size.

  10. terry jang January 19, 2014

    Hello
    I am a reselling a mass payment platform. Payees recieve a prepaid card and they can withdraw their earnings at any Visa/plus ATM. They can shop with the card at any store which accepts VISA.

    We can offer you a user interface where a business can register and load cards either individually or en masse through a CSV file.

    Finally, I believe my solution is cheaper than Payoneers.

  11. The transaction process is sometimes very easy to follow, you could see where you were with it step by step.I am a repeat customer and I will definitely use Payoneer.

  12. Usman Malik October 26, 2013

    Thanks for sharing these payment sending options with us. I will prefer to send payments via Payoneer.

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