payoneer vs transferwise for paying remote workers

Payoneer vs TransferWise for Paying Remote Employees in 2020

When you have a remote team, you need to consider different ways of paying your remote workers. 

Different payment systems charge different fees, and after a few months of paying an entire remote team, these fees can accumulate into a substantial amount.

Small differences in percentages can end up costing you hundreds, or thousands, of dollars, so you need to be careful and choose a system that will help you and your employees save as much money as possible.

With over 4 million clients each, Payoneer and TransferWise are among the most popular choices for transferring payments. Many business-owners use these systems to avoid paying high transfer fees, but which one is better for paying remote workers?

We’ve gathered some info and figured out which of these payment systems is the better option. Read on to find out more.

Payoneer

Payoneer was established in 2005 and today has 1500 employees based in 21 offices all over the world. It is available in 200 countries with 150 local currencies.

Crossover, an international recruitment agency, is one of many satisfied clients. Andy Tryba, CEO of Crossover explains:

One of the things I love about Payoneer is the simplicity that they offer. Because we have people in 85 different countries around the world, the amount of bank regulations and inner bank transfer fees, all that complexity is taken out of our hands and made very simple with the Payoneer model.

Here are the pros and cons of paying remote employees through Payoneer:

Pros:

  • Supported in over 200 countries with 150 currencies
  • Money typically transferred in 2-5 business days
  • Avoids bank fees by offering Payoneer Mastercard debit card

Cons:

  • An annual fee of $29.95 for Payoneer Mastercard debit card
  • Up to 3% transaction fee & additional currency conversion fees
  • For some countries, there are some additional withdrawal fees

As you can see, Payoneer can be great for avoiding high bank fees and transferring money to different currencies. Although there are some additional withdrawal fees, your employees can avoid these by withdrawing the entire monthly payment at once.

However, you can only send money to another Payoneer account. This means that your workers need to set up an account before receiving any money. 

payoneer withdrawal fees

TransferWise

TransferWise is one of the best choices for transferring money internationally. Founded in 2011, TransferWise was established by two Estonians who had to deal with the same issue many employers are facing nowadays: currency conversion fees.

One of the founders, Taavet Hinrikus, was paid in euros, but needed the money in his UK account in pounds. At the same time, Kristo Käärmann was paid in pounds, but needed the money in euros so that he could make his mortgage payments in Estonia.

The two men quickly came up with the plan: Hinrikus would deposit money in Käärmann’s account and vice versa, and by doing this they would save a lot of money on transfer and conversion fees.

This led them to think of an idea – a payment transfer system that would be a cheaper alternative to all other systems.

That’s how TransferWise was born.

Aside from charging very low fees, TransferWise is very transparent.

Before you even register for an account, you can set up a payment and see exactly how much money you’re sending (and the exact amount your employee will receive). The deducted transfer fee is usually from 0.5% up to 2%.

If you want to switch between currencies, you can set up a multi-currency account and convert payments to more than 50 currencies. And while many other payment systems will charge you an additional conversion fee, with TransferWise you will only have to pay the mid-market exchange rate.

Pros:

  • Transparency
  • Low fees + guaranteed mid-market exchange rates
  • Money typically transferred in up to 2 business days

Cons:

  • Some currencies not available
  • TransferWise debit Mastercard not available in some countries

TransferWise currency conversionConclusion

When it comes to international payments, TransferWise definitely charges the lowest fees. There are no hidden costs, transfers are quick and simple, and your workers don’t even need to have a TransferWise account. They simply receive money directly in their bank account.

On the other hand, TransferWise is not available in every currency. So while you might be saving money on transfer fees, your employees will have to deal with bank fees that can be very high in some parts of Europe.

When it comes to Payoneer, the fees are a bit higher, but you’re transferring directly to a Payoneer account, without local banks charging high transfer and currency conversion fees. 

This also means that your remote workers will need to set up an account and pay the annual fee for Payoneer Prepaid Mastercard if they want to withdraw money directly from an ATM.

 

As you can tell, TransferWise is the best option for the majority of countries in Eastern Europe. However, Serbian and Bosnian currencies are still not supported, so if you have remote workers from these countries, they may prefer using Payoneer to avoid high bank fees.

Aside from these two payment systems, there are many other ways to pay your remote employees. If you want to find out more, you can check out our guide to paying remote workers in 2020.

 

Once you figure out the best way to pay your employees, you can start hiring more of them. And you can do that right here on JobRack. We highly recommend Eastern European remote workers who are highly skilled and offer great value. Click here to find out more.