Payoneer

In this series of posts, I’ll be talking about what I call the “The Creator Financial Toolkit” Business Bank Accounts.  The toolkit is a set of financial products and services that a creator entrepreneur should have. International creators will find these products and services beneficial, as they enable quick payments with minimal charges.

The Creator Financial Toolkit

With the US dollar being the currency standard for worldwide trading. It is not surprising that companies outside the US make payments in US dollars. However, others make payments in euros.  For creators that live in a country with a currency other than US dollars or euros, this creates a problem.  With a multi-currency business account, you can minimize charging fees for receiving payment for your creative services on platforms like YouTube, DistroKid, and X.

From here on, creator platforms refer to platforms and services like YouTube, Dribbble, music aggregators like DistroKid, Tunecore, Ad Networks, affiliate programs, etc.

These charges include currency exchange fees of between 0.4% to 0.5% above the exchange base rate of the exchange amount. Exchanging 100 US dollars for British pounds would cost $0.40. Other charges include cross-border and payment service fees. Therefore, as a result, you could end up paying three different charges before your money goes into your bank account.

Getting Paid

The standard form of payment into business bank accounts is a wire transfer. However, a wire transfer can also be the form of payment with the highest charges; this is due to your own bank’s and the intermediary bank’s charges. It is also worth noting that many creator platforms outsource payments to platforms like Payoneer.  So finding the route with the lowest charges, while having the funds deposited into your business bank account can be challenging.

With most of the creator platforms based in the USA, the natural currency choice for pay-outs is US dollars. For a creator who lives outside of the USA, this can be a problem. I wouldn’t want to be charged when paying money I had earned into my local bank account. Unfortunately, there is often no way of getting around these charges. This is where having a financial toolkit comes in.

Payoneer

As mentioned before, platforms use payment services like Payoneer to make payments to clients. These platforms include Ezoic, Dailymotion, Fiverr, ShareAsale, and others.

Payoneer offers multiple solutions depending on specific business needs. Payoneer can operate as a global payment service for global businesses needing to make payments to clients around the globe. For this post, I will concentrate on Payoneer services that benefit the creator entrepreneur.

Creators are required to have a Payoneer account for businesses and marketplaces to make payments to creators. Upon opening a Payoneer account, creators have access to a variety of services. One of the first things to do is connect your local bank account to your Payoneer account.

You should activate a U.S. dollar-receiving account within Payoneer.  This gives you as a creator a U.S. bank routing number, allowing you to be paid in U.S. dollars. Payoneer-receiving currency accounts are available in US dollars, euros, British GBP (£), Australian dollars, Canadian dollars, Singapore dollars, Japanese yen, and Hong Kong dollars. Creators can have a total of three accounts in different currencies. One of these currencies should be in your local currency, which I will explain later on.

Business Bank Accounts: Withdrawals

Method 1: Location, Location, Location

Your U.S. dollars will require conversion into your local currency if you, like me, reside in a country other than the U.S. and receive payments in U.S. dollars. Payoneer charges up to 2% when a UK-based account holder withdraws US dollars to a UK bank account. In my case, that currency would be GBP (£).

Converting U.S. dollars to GBP, Payoneer would charge me 0.5% above the market rate. A £1.50 is charged to transfer my converted GBP into my local UK-based bank account.

The process would be the same if I lived in a country that supported Payoneer receiving currency accounts, which are US dollars, euros, British pounds, Australian dollars, Canadian dollars, and Singapore dollars.

1. The platform pays into my Payoneer account in the currency used by the Platform.
2. Convert payment currency into local currency with a 0.5% charge above the market rate.
3. Transfer funds into your local bank account at a fixed rate of £1.50 or the currency equivalent.

Method 2

Payoneer-integrated platforms and marketplaces enable direct deposits into your local bank account.  Suppose your local bank account is the same as a Payoneer receiving account. Thus you pay a set fee rather than a percentage of your payment.  The platform sets the fees, which are typically under 30 USD.

Method 3

Things get a little more complicated if the currency you receive is a currency other than your region’s currency. An up-to–2% charge will be added to the total amount transferred to your local bank account. Plus, there may be charges from your bank and an intermediary bank.

Intermediary Bank: Explained

Example

1. Payoneer has a bank account at Bank A.
2. I have a bank account with Bank B.
3. For Payoneer to pay me, Payoneer Bank A needs to have a relationship with my bank, Bank B.
4. However, if Bank A doesn’t have a relationship with Bank B, it will find a bank it has a relationship with that also has a relationship with Bank B.
5. This bank, which we will call Bank C, becomes a middleman.
6. Bank A transfers my payment to Bank C.
7. Bank C applies charges and transfers the remaining funds into my account.

Business Bank Accounts: Payments

You can make payments to contractors or suppliers from your Payoneer receiving account balances. Like withdrawing funds from your local account, the rules and fees are the same.

1. Free if the entity has a Payoneer account
2. Fixed fee if the entity is located in the same country as you and paid in local currency.
3. Up to a 2% fee if the entity is not local in the receiving account country.

Freelancer

Revolut or Wise Business Bank Accounts would be a better alternative for paying clients who do not have a Payoneer account if you are a creative freelancer.

Part 3: