Looking for a free POS solution?
Try Square POS
- Date Established
- New York City, New York
- Month-to-month billing with no early termination fee
- Free payments between Payoneer accounts
- Best for freelancers and international businesses
- No payment gateway or virtual terminal
- $29.95 annual fee
- High credit card transaction fees
Payoneer is a financial services company headquartered in New York City, New York. The company was founded in 2005 and specializes in facilitating online payment transfers both within the United States and internationally. Payoneer has over four million users in over 200 countries worldwide and can process cross-border transactions in more than 150 currencies.
The company’s services are used by many major players in the eCommerce world, including Amazon, Google, Airbnb, and UpWork. If your business needs to send or receive online payments – either domestically or internationally – Payoneer’s payment services may come in very handy. While companies like PayPal offer similar capabilities, Payoneer has a stronger focus on international transactions and claims to offer lower overall costs than its competitors.
Let’s be clear from the start about one service that Payoneer does not provide: the company is neither a merchant account provider nor a payment service provider (PSP) like Square or Stripe. Payoneer’s core service facilitates the transfer of funds from one party to another, and it doesn’t provide much else in the way of traditional merchant services. While it may be tempting to consider Payoneer as a less-expensive alternative to a full-service merchant account, it won’t work for this purpose in most cases. Yes, you can make and accept payments via credit card, but the fees for this type of transaction are higher than what most merchant accounts charge. Also, the lack of a payment gateway or virtual terminal makes it a poor choice for a high-volume eCommerce business. Payoneer works best for freelancers and businesses that frequently work with international customers. It’s also useful if your business makes or receives a lot of B2B payments.
Even if your business is the type that can benefit from Payoneer’s payment service, there are some significant downsides. While the company doesn’t charge a monthly fee or lock you into a long-term contract, you’ll still have to pay a $29.95 annual fee on the Payoneer Mastercard debit card that comes with your account. There are also numerous hidden fees, including monthly account inactivity fees if you don’t use your account, that can add up quickly. Additionally, we’ve seen a lot of complaints about poor customer service and lax data security that make us question the overall value and reliability of Payoneer’s service.
Despite these qualms, Payoneer is a popular payment service, and it can certainly be an asset to your business under the right circumstances. We’re awarding the company a 4 out of 5 stars rating for now, as the benefits provided generally outweigh the negative aspects of their service. Read on to learn the details of Payoneer’s service and what it can do for your business.
Table of Contents
Products & Services
As we’ve said, Payoneer is not a merchant account provider and doesn’t offer the full range of merchant services that you’d typically get from a traditional provider. Because of this, you won’t be able to use a credit card terminal or POS system with your Payoneer account. There’s also no support for a payment gateway or virtual terminal. Here’s a rundown of the features that are available:
- Payoneer account: Every Payoneer customer receives an account that can be used to make and receive payments. It’s free to sign up, and you can do it online in just a few minutes. While this isn’t a merchant account, you can make and receive payments via credit card. Payoneer uses an undisclosed backend processor to process these types of transactions.
- Payoneer Prepaid Mastercard debit card: Your account also comes with a Mastercard debit card, which you can use to make payments after you’ve transferred sufficient funds to your Payoneer account. While it’s not a credit card, you’ll still have to pay a $29.95 annual fee for this card. This fee is on the high side, especially if you only use your Payoneer account occasionally.
- Mobile app: The company offers a free Payoneer app, which is available for both iOS and Android. The app allows you to check your account balance, view transactions, and withdraw funds. However, it does not include the ability to make payments. For many users, this limited functionality defeats the purpose of having a mobile app, and it has received mostly mixed reviews for this reason.
- eCheck processing: All Payoneer accounts come with eCheck (ACH) processing for both making and receiving payments. While there’s no additional charge for this service, there are per-transaction processing fees.
- Online reporting: As you would expect, you can log in online to access your Payoneer account. This is where you’ll go to make payments and transfer received funds to your local bank account.
- Security features: All transactions are encrypted, but Payoneer doesn’t disclose specific encryption methods on its website or offer any details on other security features that it uses. Unfortunately, there are a lot of complaints online from users whose accounts were hacked and used to make unauthorized payments.
Fees & Rates
Payoneer is reasonably transparent about the costs of using their service, with most charges being disclosed on the Fees page of their website. Be warned, however, that there are a lot of complaints about additional, hidden fees that you’ll only find buried in the fine print of your contract. Here’s a breakdown of the costs associated with the most common transaction types:
- Payments from one Payoneer account to another are free. This is a real benefit if your customers also use Payoneer.
- Payments made via a local bank transfer incur a 0% fee, if made in US dollars. Transfers in euros or British pounds are free.
- Payments made via eCheck also incur a 0% fee in US dollars.
- Payments made via credit card incur a flat 3.0% processing fee.
These basic fees assume that there is no currency conversion involved in the transaction. To withdraw funds to your local bank account from your Payoneer account, you’ll pay a flat $1.50 each time (without a currency conversion). If you need to convert withdrawn funds to your local currency, you’ll pay up to 2% above the mid-market rate for the conversion.
The company doesn’t charge most of the fees that are traditionally associated with merchant accounts. There’s no account setup fee and no monthly account fee. You will have to pay an annual fee of $29.95 for your Payoneer Mastercard debit card, but this can be waived in some cases. While not disclosed, we’ve heard numerous reports concerning an account inactivity fee that Payoneer charges on a monthly basis if you don’t use your account at all during that month. While the fee doesn’t appear to be very high, it’s still a rip-off to charge you a penalty for not using your account. There are other, undisclosed fees as well, so review your contract terms and conditions very carefully before you open an account. Note that this includes the extensive User Agreement presented to you during the sign-up process that most people never bother to read.
Contract Length & Early Termination Fee
Payoneer bills on a month-to-month basis and doesn’t require you to sign a long-term contract. There’s also no early termination fee for closing your account, although you’ll still want to follow the account closure procedure outlined in your contract very carefully to ensure that your account is actually terminated.
The company’s flexibility in allowing month-to-month billing without a lengthy contract is commendable and in line with the practices of other payment service providers. However, as we’ve noted, you’ll still have to pay an annual fee. While this fee is supposed to be for your Payoneer debit card, it doesn’t appear to be possible to set up an account without also accepting this card. Hence, the annual fee is more like the annual account fee that many merchant account providers charge. Don’t expect to receive a prorated refund for this fee if you close your account after paying it.
Sales & Advertising Transparency
Payoneer markets its services primarily through its website, and it’s a pretty good one. The site is easy to navigate and includes links to a ton of information about what Payoneer can do for your business. While a lot of what’s presented is marketing fluff, there are also some decent disclosures about the fees for using Payoneer’s payment services. Those disclosures aren’t complete, however, so you’ll still want to review the terms and conditions before you sign up for an account. The site also includes a decent amount of educational materials, such as an FAQ and several how-to videos.
Signing up for a Payoneer account is accomplished right on their website. While this is becoming an increasingly common practice in the payments industry, be aware that there are disadvantages as well as advantages to doing so. Obviously, an online signup process makes it much quicker and easier to get an account approved and start making or receiving payments. It also spares you the hassle of dealing with independent sales agents or having to negotiate the terms of your contract. At the same time, the process is so quick that most people will quickly click through every screen and finalize their account without thoroughly reviewing the terms and conditions contained in the user agreement. This can lead to unpleasant surprises down the road, like those account inactivity fees we mentioned earlier that aren’t disclosed on the website. We should also remind you that it can take up to a month to receive your Payoneer debit card in the mail, and your ability to use the service will be somewhat limited until it arrives.
The company also has a very active social media presence, with accounts on Facebook, Twitter, LinkedIn, and Google+. These accounts mostly serve to distribute posts from Payoneer’s blog, but the content is updated very frequently and contains a lot of useful educational information. Unfortunately, the company’s Facebook page doesn’t allow customer reviews. Payoneer also has a YouTube channel, which includes dozens of client testimonials, tutorials, and educational videos.
Customer Service & Technical Support
Payoneer includes a very useful Support Center on its website which contains a detailed and thorough knowledgebase and FAQ for answering questions and troubleshooting problems. If you can’t find the answer to your question here, you’ll have to log in to your Payoneer account to access the live chat feature. You can also contact Payoneer by email, but telephone support appears to be limited to reporting a lost or stolen debit card.
Support via live chat is only available in English, Spanish, or Russian. If you don’t speak one of these languages, the email option supports dozens of additional languages. Unfortunately, we’ve found a lot of complaints alleging poor customer support, so we encourage you to give the knowledgebase a try before resorting to any of the other support options.
Negative Reviews & Complaints
Payoneer has been accredited by the BBB since 2008, and currently has an A+ rating. The company has had 73 complaints within the last three years, of which 33 were filed within the last twelve months. Payoneer responds to all BBB complaints, but has only resolved 30 of them to the consumer’s satisfaction. The company’s BBB profile also includes twelve reviews, out of which eleven were negative and one was neutral. There were no positive reviews.
We also found 20 complaints against Payoneer on Ripoff Report, and even more on other consumer protection sites such as Pissed Consumer. However, most of these reports are actually complaints against businesses using Payoneer as their payment service, and not the company itself. While Payoneer is, of course, not responsible for the fraudulent practices of merchants using its services, we feel strongly that the company could do a much better job of weeding out scammers and shady businesses. As things stand now, it’s simply too easy for anyone to get a Payoneer account without any of the routine credit or background checks that are required for a full-service merchant account.
Among all these complaints, we’ve found several common issues, including the following:
- High fees. While it’s free to open an account and many transactions can be completed either for free or for a very low fee, Payoneer charges a lot of additional fees that aren’t disclosed on the company’s website. This includes the annual fee for the Payoneer debit card and the account inactivity fee if the card isn’t used every month. Again, we can’t emphasize enough how important it is to review all terms and conditions thoroughly before opening your account. These “hidden” fees are there, and you need to understand them before you get surprised by your monthly statement.
- Frozen/withheld funds and canceled transactions. Like any payment processor, Payoneer will hold funds for a transaction if fraud is suspected. Some of these transactions will be canceled altogether, and it’s possible to have your account terminated without notice if their underwriters sense a pattern of fraudulent activity. See our article How to Avoid Merchant Account Holds, Freezes, and Terminations for tips on how to avoid having this happen to you.
- Compromised personal information leading to fraud. We found a disturbing number of complaints alleging that the user’s account was hacked and used to make fraudulent payments. Payoneer claims to use the latest encryption methods to safeguard users’ accounts, but doesn’t provide any concrete details.
- Poor customer service. There were also a lot of complaints regarding the quality of Payoneer’s customer support. Most of these allegations appear to involve telephone support, so it’s disappointing to see that Payoneer has mostly shut down this type of support in favor of live chat rather than address the problem.
Positive Reviews & Testimonials
Payoneer devotes an entire section of its website to Client Testimonials from satisfied customers. You’ll also find Payoneer Stories, which features 25 in-depth profiles of clients from around the world who use Payoneer to send and receive payments as part of their business. These profiles are detailed and compelling, and paint a positive picture of the company. We also found a few other positive comments scattered around the web from people who used the service without encountering any of the problems that plagued some users.
If you’ve had any experience using Payoneer, we’d like to hear from you. Please feel free to leave a comment or review in the Comments section below. Thanks!
It’s no surprise that so many of the testimonials for Payoneer come from freelancers and international businesses. Merchants who just need a simple way to issue and accept payments to and from other businesses – and who don’t need all the bells and whistles that come with a full-service merchant account – will find a lot to like about the company’s services. Payoneer’s ability to handle currency conversions and issue funds to local bank accounts around the world make it a compelling choice for many.
At the same time, if your business needs a reliable merchant account that can handle large numbers of transactions and provide a payment gateway for customers to place and pay for orders, Payoneer will not work for you. The company is also not a good choice for seasonal businesses or those that only occasionally have to send or receive a payment. The extra fees – particularly the account inactivity fee – will negate any savings you might otherwise enjoy over a true pay-as-you-go service like PayPal. The bottom line is that you should only sign up for a Payoneer account if you intend to use it every month, and also if you’ll actually save money by doing so. Payoneer claims that businesses can save up to 71% in fees over their competitors, but this figure almost certainly represents an ideal business case that won’t apply to most users. You’ll want to consider all costs in determining whether Payoneer will actually save you money.
You should also take a close look at the company’s high complaint volume in determining whether Payoneer is right for your business. Buried in the fine print of the company’s terms and conditions is a clause prohibiting the use of Payoneer in a lengthy list of business activities. This list includes most of the types of activities that are usually classified as high-risk by payment processors, and it’s obvious that Payoneer isn’t designed to be used by high-risk businesses. Unfortunately, the use of an automated online sign-up process means that these accounts are approved anyway, only to have them frozen or shut down later once the merchant tries to use them.
We’re rating Payoneer at 4 out of 5 stars for now. While the company provides a solid payment service and their pricing can be reasonable under certain circumstances, there are obvious quality control issues with the way accounts are approved. We’re also deeply concerned with reports from users regarding poor account security and inadequate customer support. If you do business internationally and just need a payment service to transfer money and make currency conversions, Payoneer might be a good choice for you. However, you’ll want to carefully weigh all the pros and cons we’ve discussed and also compare your likely costs against other similar payment services.
We've done in-depth research on each and confidently recommend them.
We've done in-depth research on each and confidently recommend them.