There can’t be many businesses that haven’t come across the thorny issue of international payment processing, whether that is paying overseas suppliers or getting paid by international buyers.
The good news is that in the world of fintech there is a solution, and it works whether you are a one-man-band freelancer or an international Amazon seller.
Payoneer has been taking the world by storm, so in this article we’re looking at the benefits of using a rising star in the world of payment processing.
Payoneer has been providing payment processing services since 2005 and now boasts a remarkable set of stats for a company that has arguably flown under the radar.
The business services more than 4 million customers and handled over $44bn of transfers in 2020, making it a very big player in the marketplace.
Payoneer has a global reach, accepting and making payments in 150 different currencies in 200 countries around the world, meaning that whether you need to pay a supplier in Ghanaian cedi or take a payment from a customer in US dollars, the app works just as well.
The premise is simple: provide online traders, freelancers and companies with a single place to take, make and manage international payments with the lowest fees possible.
When you need to receive payment in the UK then you can simply send your customer your bank details, no problems with IBAN codes or currency transfers.
For overseas payments, however, you may find that you need to give your customer your Swift number or an IBAN code and when you actually get the money, that your bank has levied a big charge and transferred the money at a less than competitive rate.
With Payoneer, you give your customer one set of bank details that acts as a local bank account.
Importantly this means that your clients don’t have to worry about making an international payment, they simply pay in their own currency as if you were a local supplier. The good news is that they can choose to pay using a credit card, ACH bank debit or local bank transfer.
You then have a balance in your receiving account that you can either convert and withdraw or use for international payments yourself.
If you regularly get paid from marketplaces like Fiverr, PeoplePerHour or Upwork, then Payoneer links directly to your account meaning that your payments come in automatically.
The process is just as simple if you work with platforms like Amazon, Shopify or WooCommerce to manage sales, as integration is built in. For larger businesses, there is an API that allows connection to more sophisticated packages.
Imagine a UK freelancer who gets paid in USD from one of their clients and when the money hits their account, they get charged a fee and a conversion charge into GBP.
They also subscribe to a SaaS service like Ubersuggest or Copyscape that charges them in USD. When they make a payment for their services in USD they get charged for changing the money back into USD too!
With Payoneer, this scenario doesn’t arise as the freelancer can simply hold a USD balance and use that to make their SaaS payments. No conversion charges at all.
This is a simple example but for smaller businesses the cost of doing business internationally can be prohibitive, meaning that they fail to grow with overseas customers.
For larger businesses that make much greater use of international payments, the costs can really mount up and so having a cheap and easy way to pay suppliers and contractors is vital.
Where both parties have a Payoneer account there are no fees for payment between the two. This means that if your business has contractors that you pay regularly, you can save dramatically on the costs of your weekly or monthly payment run.
One of the hot topics in the UK recently has been Brexit and sellers are now finding that they are having to register for VAT in multiple countries. Payoneer has a neat function that allows businesses to use their balance to pay their VAT direct to local tax authorities for free. No conversion fees, no wire transfer fees.
There’s no point in having a slick payment system if it costs the earth, and Payoneer scores in this regard too.
Setting up an account is totally free, as is obtaining multi-currency account details. There is an annual charge of $29.95 but this only applies if you go a full year without using Payoneer, which seems unlikely.
Payments made between Payoneer accounts are also completely free of charge as are VAT payments made from your Payoneer balance.
Payments via receiving accounts in USD, EUR, GBP, JPY, CAD, AUD & MXN are free but when customers use their credit cards there is a 3% charge or a 1% fee for ACH Bank debits.
There is a charge for customers that want to receive money from marketplaces, but this is dependent upon the individual platform.
To send money overseas, the cost is similar with a 3% fee for credit card payments and 1% for ACH debits and local bank transfer.
Currency transfer is where the high street banks usually make a good amount of their money and often they won’t tell you what the rate is going to be until you have sent the funds!
Payoneer charges a flat 2% above the interbank rate, meaning that you know exactly what the cost will be before you press ‘send’.
If you want to withdraw funds to a local bank account then Payoneer charges $1.50 for USD to USD withdrawals; €1.50 for EUR to EUR, and £1.50 for GBP to GBP.
If you need a more flexible way to use your money, Payoneer provides a free business debit card that allows you to spend your balances in whatever currency you choose.
Payoneer is very squarely aimed at the business market.
This means that there is an excellent amount of support, help and advice on their website, not just covering international payments but also general business topics like how to build your personal LinkedIn brand or how to deal with the ‘client from hell’!
One very useful aspect for the smaller business is the invoicing option.
Payoneer has a feature that allows the user to generate an invoice complete with a due date that can be sent directly to the customer. The customer can then simply click on a link to pay.
This will be of particular interest to freelancers, who don’t use accounting software or b&b providers who want to rent their property independently.
If you do use accounting software, Payoneer links directly with packages like Xero to enable automatic management of balances.
If you need help, Payoneer has more than 24 local offices around the globe and supports 35 different languages on its helpdesk.
Payoneer also provides an innovative funding scheme to help Amazon and Walmart sellers develop their business.
The Capital Advance Express cash boost is designed to give sellers access to up-front cash that is then paid back little-by-little from receipts as customers pay through Payoneer. Once sellers have established a positive track record they can then move on to the Capital Advanced program to draw down advances up to $500,000.
Payoneer – is it the right choice for your business?
Payoneer is a business system, so if you are looking for a cash transfer method for the odd personal payment, there may be better options out there.
For freelancers, this looks like an exceptional answer to the need for a reliable, safe and cost-effective way to invoice and take payments from clients.
Payoneer is also very useful for smaller b&b and hotel owners who want to break away from the platforms and do their own thing.
For larger platform sellers, there are certainly features that will appeal massively, especially if they both buy and sell in foreign currencies, but it is important to check the fees for your particular platform.
Without a doubt, for most business users, the one-stop-shop nature of the Payoneer offering means that there is a great, low-cost alternative to expensive wire or bank transfers.