Paypal vs Skrill vs Payoneer for Indian freelancers


I have been freelancing for about five years now! I remember being so confused during those days about which payment agency to choose for receiving my hard earned money! I had so many concerns: whether the money would safely reach my bank account; whether I'm getting the best deal in terms of fees; whether I have chosen the correct currency; etc.

I didn't have much guidance back then about these issues and so I took me a while to understand all the options available to me and judge which one is the best. Initially, we had only Paypal and Moneybookers (which later became Skrill) to choose from. However, recently, Payoneer has started offering its services and the fees and convenience that it offers are excellent and more competitive as of now.

Below I have compared various aspects of the three so that you can decide which is the best for you. I have also included some suggestions that may help you decide in case you are not sure about which options are suitable for you.




CURRENCY


SKRILL

You can have only one currency for your account in Skrill which you can NEVER change unless you request them to close your account in order to open a new one with a different currency. This is not a problem if you receive all your payments in a single currency, say, for example, USD.

However, if you are freelancing on multiple websites and each of them have a different payout currency, then it will lead to unnecessary currency conversion fees. Thus, if your account currency is, say, USD, and if you received payments in GBP, then Skrill will convert that money currently in GBP currency to USD currency after deducting currency conversion charges. The irony is that the money is again subjected to currency conversion charges (at the bank level) when you withdraw it to your bank account which is in another currency currency, say, INR.

It is also important to note that money transfers from Skrill involve the use of an intermediary bank which results in the imposition of an intermediary bank fee (around USD 25). This pushes Skrill into being a noncompetitive payment option as the other two agencies (Paypal and Payoneer) do not charge any such fees.

Let me cite some examples (assuming you are a freelancer based in India) showing the step-by-step procedure of the money being transferred to your bank account:

Scenario 1: Payment received in USD & Skrill Currency - USD

Payment received (USD) >> Skrill's Withdrawal Fee >> Intermediary Bank Fee >> Currency Conversion Fee charged by your bank (USD to INR) >> Money received in your account (INR)

Scenario 2: Payment received - GBP & Skrill Currency - USD

Payment received (USD) >> Currency converted from GBP to USD by Skrill (currency conversion fees charged) >> Skrill's Withdrawal Fee >> Intermediary Bank Fee >> Currency Conversion Fee charged by your bank (USD to INR) >> Money received in your account (INR)

Scenario 3: Payment received in USD and Skrill Currency - INR

Payment received (USD) >> Currency converted from USD to INR by Skrill (currency conversion fees charged) >> Skrill's Withdrawal Fee >> Intermediary Bank Fee >> Money received in your account (INR)


PAYPAL

Paypal allows you to hold multiple currencies from among its list of supported currencies. The image below will make it clearer for you:




























Thus, you may receive the amount in any currency (from the supported ones) and you can withdraw it to your bank account without having to pay for the needless multiple currency conversion stages to USD and then again to INR (as seen in Skrill above).

However, please note that your bank will have its own currency conversion fees and there is no way to avoid that. You will save on the intermediary bank fees though as I have never seen this kind of fees being charged by Paypal in all these years.


PAYONEER

As of now, Payoneer allows you to receive payments in three currencies - USD, GBP and EUR.




This, like Paypal, is another advantage over Skrill as you save on fees for the multiple currency conversion stages.

MONEY WITHDRAWAL


SKRILL

Ease of withdrawal: Quite easy and straightforward and you just have to follow the instructions on the website.

Speed of Transfer: Takes a bit of while as the money is transferred via SWIFT. Also, the inclusion of the intermediary bank increases the delay. Approximate time for the transfer to be completed can be anything from 5 working days to 15 working days.

Fees: Plenty of fees here with withdrawal fees, multiple currency conversion fees (if currencies don't match), intermediary bank fees and bank's currency conversion fees (if Skrill account currency is not INR).

PAYPAL

Ease of withdrawal: Quite easy and straightforward and you just have to follow the instructions on the website. However, you have to enter the purpose of receipt of payment in accordance with RBI rules. It is also mandatory to register your PAN with your account.

Speed of Transfer: Speedy as the mode of transfer used is NEFT. Amount is transferred within 2-5 working days.

Fees: Paypal's withdrawal fees and currency conversion fees (on the rare occasion if currency of money received is not supported by Paypal). There is no currency conversion fee charged by your bank as the amount received in your bank will always be in INR.

PAYONEER

Ease of withdrawal: Quite easy and straightforward and you just have to follow the instructions on the website. However, you have to enter the purpose of receipt of payment in accordance with RBI rules. It is also mandatory to register your PAN with your account.

Speed of Transfer: Speedy as the mode of transfer used is NEFT. Faster than Paypal. Amount is transferred within 1-3 working days.

Fees: FREE WITHDRAWALS and currency conversion fees (on the rare occasion if currency of money received is not supported by Payoneer). There is no currency conversion fee charged by your bank as the amount received in your bank will always be in INR.


ACCOUNT BALANCE


SKRILL

Skrill allows users to have an account balance which means that there is no minimum timeline within which you will have to withdraw the amount to your bank account. Thus, you can hold your balance until you feel that the exchange rates are the best and then you can withdraw the amount to get the best exchange rate.


PAYPAL

With Paypal, you shall have to withdraw your balance every single day failing which it shall be withdrawn automatically to the bank account that you have registered. Thus, you shall have to accept the exchange rate of the day. However, you can divide the money into multiple withdrawals to multiple bank accounts that you may have registered with Paypal.

PAYONEER

With Payoeer, the balance is withdrawn automatically to the bank account that you have registered. You have no control on when you want to withdraw the money. Again, like Paypal, you shall have to accept the exchange rate of the day.

Another thing to note is that Payoneer allows you to add only one bank account and, unlike Paypal, you cannot divide your withdrawal money among mutiple bank accounts.


VERIFICATION PROCESS


The verification process of Paypal is much easier and hassle-free as compared to Skrill. All you have to do in Paypal is to provide your bank details and they shall deposit two small amounts in your account which you shall have to enter correctly during the bank account verification process. However, in Skrill, you shall have to perform the task of uploading money to a certain account in a foreign bank.

Skrill also requires that the users have a bank account in a branch which has a SWIFT code. It is an international bank identification code and is required for transactions involving foreign exchange. If your branch doesn’t have a SWIFT code then you might have to go and talk to your bank’s officials and ask for their advice on what action to take.

Paypal asks for no such code – just the IFSC code which every single bank branch in India possesses. This makes it easier to complete the verification process with Paypal while that of Skrill may seem lengthy and might prove to be slightly inconvenient.

There is no such verification process for Payoneer  for adding bank accounts as of now. Thus, the process is quite simpler in case of Payonner.


VERDICT

From the above positives and negatives, I would say that it would be beneficial for you to choose either Payoneer or Paypal. If you receive payments only in USD/GBP/EUR then I would suggest that you use Payoneer because of its much lower fees and faster transfers. Also, the account opening procedure of Payoneer is much simpler and hassle free as compared to Paypal and Skrill.

If you receive payments in currencies which are not supported by Payoneer, then you have limited options and I would suggest you select Paypal. Skrill has become very costly and I see no benefits arising out of using Skrill for getting freelancing payments.