Transferwise, Payoneer and PayPal – handling international freelance earnings

usd currency

Most of the money I’ll make this year wll be in USD. The system I freelance under currently only pays out via Paypal or Payoneer. Both of these carry fees for receiving cash.

With an international Paypal account, the transaction fee is 2% with a maximum of $20.00 USD per payment, or the foreign currency equivalent of $20.00 USD.

With a Payoneer account, the transaction fee is $3 fixed per transfer.

However, a US PayPal account just has a fixed transaction fee of 2%, which is capped at $1 per payment.

Therefore the desirable option was to set up a US PayPal account. This wasn’t without its struggles: luckily I had an ITIN, which allowed me to do this pretty seamlessly. For those without an ITIN, it is still possible to set up a basic US PayPal account to receive funds and direct them straight to your bank account upon receipt.

If you want to open a Transferwise Account, please do me a favour and let them know I refered you by using this link. Thank you!

Sarah Eaglesfield

Then from PayPal, I transfer the payments without any fees to my Wells Fargo account in the USA.

Then the question is, what is the most cost effective way to move USD money from Wells Fargo to GBP money in my bank account in the UK?

Transferwise

Transferwise fees on a $1K USD transfer to GBP

The fees for using Transferwise work out at slightly over $9 to transfer my USD balance to my GBP balance. They have good rates, and I particularly like their currency card management features, but they are not the best on the market for ongoing money management.

Payoneer

Payoneer’s fees depend on how you move the money around their accounts internally before doing a transfer. The fees for withdrawing a USD balance straight to a GBP bank account are 2% – so on a $1,000 balance, that’s $20.

Payoneer fees to withdraw direct from USD balance to GBP Balance

However, if I conver the money from USD to GBP in Payoneer, the fee is 0.5% of the total amount.

Then, if I withdraw GBP to my GBP account, the fee is a flat £1.50.

Therefore the cost of withdrawing $1K fron Payoneer is around $7. Or, it would be – but Payoneer don’t allow you to transfer to your home currency, whch ruins the process.

On the plus side, Payoneer’s currency conversion rate is 2% over the mid-market exchange rate. Obviously exchange rates constantly change, but it turns out that Transferwise has a very handy page to see what you will get from various currency exchange services.

Comparing them all

This was the exchange rate on the 2nd January 2020 and is not accurate as of this date

Transferwise haven’t included the Payoneer comparison here. However, as we know that the transfer fee is 2% and they exchange at 2% above the Mid-market exchange rate, (0.77598948 as of 2nd January) the amount you would receive with a Payoneer transfer would be £760.46 – putting them slightly ahead of the competitors. However, my Freelance company would need to pay me directly into Payoneer, as they do not accept payments from individuals.

I will keep investigating the best way to move money from USD to GBP. It may be that there are some trading platforms or similar where you could vastly reduce the fee. For now, I want to get the money out as quickly and simply as I can, so I’ll stick to Transferwise – but my choice may change in the future. It takes WellsFargo forever to send money, it’s not the instant transfers we’re used to in the UK. Scheduling to keep on top of cashflow is very important, and not something I want to spend too much time worrying about in the future.