In this article I will talk about Payoneer versus Paypal and their currency conversion fee. You may think that Paypal doesn’t have a fee on currency conversion, but that’s a dirty Paypal trick…
The Reason for this article
The reason I’m writing this article is because recently I was talking to someone on a forum, and they truly believed that Paypal has no currency conversion fee, and that Payoneer does. I tried to convince them of the truth, but the person wouldn’t believe me. In the end I had to share screenshots to show the truth.
I found it amazing that somebody who uses both Paypal and Payoneer had this misconception, and I was a little angry that someone would put out false information like that. The guy didn’t do it out of malice, but out of ignorance. And that’s okay, I’m not hating on him for that. But people are losing money over this, and people need to know the truth!
How to do currency conversion?
A little while ago I wrote an article where I show how to do currency conversion on Payoneer. And I also wrote an article about how I did currency conversion on Paypal for many years, and I shared tons of screenshots in this article. I didn’t write an article where I show how to convert currency on Paypal, but I may at some point in the future.
In the articles above I also touched on the subject of currency conversion rates and fees, but that wasn’t the topic there.
Currency conversion fees and rates
The trick that Paypal pulls on people is that they don’t charge a fee for currency conversions. This is true, they don’t. But what they do is they give you a horrible currency conversion rate, which overshadows the fact that they don’t charge a fee. In this way you live your life thinking there is no fee, while at the same time they charge you more for those conversions than any other payment processor or bank.
On the other hand, Payoneer does charge a 0,5% conversion fee. For example, this comes up to a $5 fee for converting $1,000 dollars into another currency.
Look at the following screenshots:
Paypal
This rate is an estimate based on the current rate and includes PayPal’s currency conversion spread.
Payoneer
Transfer money between your currency balances to make payments in the currency you need.
These screenshots were taken on the same day, a few minutes apart. As you can see, Paypal has no fee, while Payoneer charges a 0.5% fee, amounting to $5 USD in this case.
But if you look more closely, you will see that for $1,000 dollars you will get €966 euros on Paypal, and for the same amount of dollars you will get €999 euros on Payoneer. So you just got €33 more euros on Payoneer than you would get on Paypal. That’s not a small amount. If you found €33 euros on the street, you would probably bend over and pick it up 😋
And this is the whole story. What Paypal does is they give you a low conversion rate by default, and what Payoneer does is they give you the correct current market rate, but they charge a tiny fee for the conversion. If you ask me, Payoneer is transparent and correct in how they do this, while Paypal is shady about it and hiding the truth.
Here is a video I made talking about this:
Conclusion
So now you know beyond a shadow of a doubt. Payoneer is the better choice when it comes to converting money between currencies. Personally, I consider Payoneer superior to Paypal in almost every way, not just this.
And on that point, pretty much every other payment processor will give you a better deal than Paypal on converting money between currencies, such as Wise…
Wise – How much do you want to convert?
Our fee | Total amount we’ll convert | Live rate
Set up an automatic conversion based on your desired rate
So, in the end, Wise is the clear winner between the three. They even allow you to set up automatic conversion based on your desired rate, which is cool. They also give you the fair current market rate, and their fee is even lower than Payoneer’s 😉
To finish this, only one thing is certainly true, and that is that every payment processor beats Paypal for most things.