And just like magic, Udemy has switched on a new method of Payment for Udemy instructors: Payoneer. Now we have the option between PayPal and Payoneer. Which is better?
Well, if PayPal is not available in your country, well there is no question. Having another payment option will be rejoiced by many.
This might depend on where you live, so I’ll do the calculation based on where I live (Canada). If you have more information that is local to you, feel free to leave a comment.
So to receive money into my PayPal account, PayPal charges me nothing. If someone sends me US$1,000, I have US$1,000 sitting there in my account. Payoneer also claims to have no fees to receive money.
PayPal is accepted at many only e-commerce merchants, and I often have a chance to spend my PayPal funds there. I pay my web host from PayPal for no fees. I have not noticed merchants that accept Payoneer. So one can conclude that Payoneer if you wish to spend some of your money online without bringing it into your bank account.
A big problem for me is the cost of foreign currency exchange. PayPal charges 2.5% for currency exchange, so on that US$1,000 withdrawal to my bank account, PayPal is keeping $25 for itself. That’s quite expensive. I could use that $25 for something useful.
Apparently, Payoneer charges 2% for bank transfers and 3.5% to put the money on a MasterCard. Then the MasterCard would charge currency conversion on top of that!
XE.com exchange rate: $1,000 USD = $1,292.06 CAD (mid-market rate, *actual)
My bank exchange rate: $1,000 USD = $1,251.70 CAD (*actual)
PayPal exchange rate: $1,000 USD = $1,255.87 CAD (*actual)
Payoneer exchange rate: $1,000 USD = $1,272.06 CAD (*estimated)
So on the surface, it might be a little advantageous to use Payoneer over PayPal. But you have to weigh that against the risks of using a smaller payment provider.
It also seems that Payoneer is asking for a lot of tax information from instructors and will be withholding the US government’s 30% deduction. So that might be a downside for some.
I won’t be switching just yet. But I’ll keep an eye open for other instructor’s experiences.