Every year, both businesses and self-employed individuals strive to open up new opportunities for easier and more convenient management of their economic activities. At the same time, in connection with the large number of payment systems operating today, business representatives have a reasonable need to simplify the issue of making payments, issuing invoices, currency conversion, account management as much as possible, without scattering their resources on the simultaneous maintenance of several payment accounts, but to focus on one that could “cover” all these moments.
Although we quite often advise clients to diversify their business assets by opening corporate accounts in various institutions (both banks and payment systems), today we suggest considering a payment system such as Payoneer, which as of 2024 has more than 2,200 employees with 25 offices, millions of customers worldwide, a number of financial services licenses in various jurisdictions, and its shares are listed on the Nasdaq, which also adds to its reputational appeal to potential and existing companies and freelancers.
What is Payoneer?
Founded in 2005, Payoneer Payment System is an online money transfer platform that can be used to receive and send payments. In effect, Payoneer functions as a digital wallet that allows users to transfer funds in multiple currencies. Users can register a Payoneer account that enables them to add funds, pay both contractors and suppliers, receive payments from various sources including platforms like Amazon, Upwork, Fiverr, etc., issue invoices, and more.
What are the benefits of Payoneer for business?
Fast account opening
In view of the KYC and AML policies implemented in recent years, which are extrapolated not only to banking institutions, but also to payment systems, in practice there are very often cases of lengthy compliance procedures that can last up to several months.
In this aspect, Payonner works promptly and provides the option of opening a company’s corporate account in a few days (provided that a complete and correct package of documents is provided).
Direct details with a variety of currencies
As a general rule, all payment systems can be conditionally divided into those that provide so-called “direct” details, and those that provide “indirect” details. In fact, this means that if the company receives indirect details, then the payment system itself acts as the owner of the account. For the correct crediting of funds, the counterparty must specify the so-called referral number, which will allow identification of the recipient of the payment (company).
With direct details, the account holder is directly indicated by the company or the freelancer, depending on who exactly the account was opened for. This significantly simplifies the process of transferring funds, on the one hand, and somewhat increases the reputational aspect of working with the company as a counterparty, on the other. In the case of Payoneer, the latter offers direct details and also provides users with options to manage the following currencies: USD, EUR, GBP, CAD, AUD, JPY and CNH.
Global customer coverage
An important aspect of doing business in the international arena is the possibility of unhindered receipt of payments from some clients and sending payments to others. At the same time, from the point of view of geographical dispersion, the company’s counterparties may be registered in various countries. With this in mind, one of the requests of international business is to have a corporate account that will allow transactions with the maximum number of jurisdictions.
Payoneer in this aspect allows users to work with more than 190 jurisdictions, in addition to sanctioning ones. Moreover, almost every country also offers alternative options for payment methods: SWIFT, SEPA, ACH, BACS and others.
Working with the US dollar
One of the urgent needs of international business when choosing a suitable payment system is the need to work smoothly with USD. At the same time, companies cannot always meet this requirement. This is due to the fact that some payment systems do not offer the use of the US dollar as a currency for receiving and transferring funds, while others consider the option of using USD exclusively in a certain region (for example, in the USA).
In the context of working through Payoneer, the specified restrictions are absent, as a feature of the specified payment system is the ability to receive and send US dollars regardless of geographic criteria. In other words, the company or freelancer who opened the account can transact in USD without any restrictions.
Possibility of automatic generation of invoices
Invoicing, or the process of invoicing for counterparties of a company or a self-employed person, is a mandatory requirement for proper accounting, as the presence of an appropriate invoice allows you to confirm the source of origin or debit of funds. Moreover, the absence of an invoice for a certain transaction actually makes it impossible to recognize the payment as an expense of the company.
In this regard, Payoneer has implemented the so-called “Free Invoice Builder”, which allows you to automatically generate an invoice and send it to the client. At the same time, the received invoice contains mandatory details from the point of view of IFRS, namely: Date of invoice, Unique account number, Information about the company, Information for the client, Quantity and description of deliveries, Date and place of delivery, Total amount to be paid, and if the company is registered as a VAT payer, you can use a template that includes the appropriate fields for rates and tax values. In view of the above, on the basis of the invoice generated through the Payoneer system, it is possible not only to carry out transactions, but also to further use it for the preparation of annual financial statements, including audit ones.
Option of integration with trading platforms
For businesses operating in the e-commerce sector, one of the most popular payment system options is the ability to install direct payments on trading platforms. Payoneer offers such an option, namely, it allows you to connect payments with such global trading platforms as Upwork, ebay, Amazon, Patreon, Fiverr, AirBnb, Wish, Walmart, etc. This functional feature significantly simplifies the process of processing and receiving payments.
Does the Payoneer payment system have disadvantages?
It is worth noting that the question of the shortcomings of any payment system should be reasonably considered through the prism of a business request, for which it is necessary to open an account. After all, some functions that are not offered by this or that EMI may not have any impact on the user, due to the lack of relevant needs. At the same time, below we offer to consider those issues that in a concentrated form can be attributed to the shortcomings of the Payoneer payment system.
Fees. Yes, some users of Payoneer note a slightly increased commission of the payment system – up to 3% of the transaction amount. At the same time, under our affiliate program, Payoneer offers the option of assigning VIP status to the account. This offer is relevant for those customers who plan to make a turnover of 10,000 USD/month through their business account. After receiving VIP status, you can significantly reduce the company’s commission costs, reducing them to 2%.
Impossibility of receiving payments from individuals. For certain types of companies, which are primarily aimed at serving individual consumers, this disadvantage can be critical when choosing a payment system. Yes, Payoneer, according to its internal rules, does not allow receiving payments from persons who do not have the status of a business entity. That is, in fact, the specified payment system is primarily aimed at serving those types of business that are based on working with other business structures (companies, private enterprises, freelancers).
Alternatively, for those types of customers who plan to receive payments from individuals, there are a large number of EMIs that are targeted specifically at the specified type of business organization. The lawyers of Azola Legal Services will analyze your case, the existing documentation and offer those payment systems that will fully allow you to cover the relevant requests for the smooth conduct of business activities.
Prohibition of accepting clients with certain types of activities. It is logical that each bank or payment system, having the appropriate license to provide financial services, establishes a list of prohibited jurisdictions or types of business that they refuse to serve due to internal policy. Payoneer is a fully transparent EMI in this aspect and clearly regulates the above.
So, among the prohibited Payoneer types of business, along with the obviously inadmissible ones, such as the trade in weapons, animals, objects that violate intellectual property rights, there are also such legal activities as cryptocurrency (fully legalized in a number of jurisdictions), real estate sales, restaurant business, etc. It is not possible to open a Payoneer account with the specified types of economic activity. With this in mind, after analyzing your case, we can offer other payment systems for which acceptance of the specified types of clients is allowed.
How to withdraw funds from Payoneer?
To withdraw company funds to a current account, you need to go to the Withdraw, To Bank Account section in your Payoneer account. After that, you need to click the “Withdraw funds” option. Funds are thus credited to the company’s account opened in a bank or other payment system. It should be noted that Payoneer charges a withdrawal fee of 3% of the transaction amount (the fee may be reduced to 2% for VIP accounts). Similarly, funds can be withdrawn by transfer to the bank account of counterparties, business partners or company employees.
It is noteworthy that Payoneer, being an official partner of Privatbank and Monobank, offers the option of transferring funds from the payment system to a card of a Ukrainian bank (this option is most popular for IEs that have an open Payoneer account).
There is also a classic way of withdrawing funds – withdrawing cash from a Payoneer card. Usually, the ATM withdrawal fee is $3.15 per transaction, but some banks may charge an additional fee for using their ATMs to withdraw cash. This amount varies and depends on the policy of a particular bank.
Who is Payoneer good for?
Taking into account the above, we can conclude that the Payoneer payment system, taking into account the implemented functional features, on the one hand, and the existing limitations, on the other, will be optimal primarily for such a business as IT companies (both product and outsourcing), for trade activities (importers, exporters), e-commerce business, marketing agencies, startups.
At the same time, despite the prompt work of Payoneer managers in general and the compliance department of the payment system in particular, most customers have problems with opening an account. This is primarily due to the incomplete provision of the company’s corporate documents, an unclear or even controversial description of future activities, the absence of those documents on the final beneficiaries that must be presented to the compliance department for the successful completion of the verification procedure.
Our team can help you open a Payoneer account by conducting a so-called pre-check check of the existing package of documents, formulating a business proposal that would be attractive to the payment system in order to open a corporate account and register a business account “from scratch”.
