Payoneer vs WorldFirst vs TransferWise
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Hot Update:
With effect from 7 August 2019, WorldFirst is revising their rates lower and their new pricing is much better for us!
The forex spread (aka exchange rate or "fees" if you wan to call it that) for international transfers starts from just 0.5% or less. If you transfer more, the rate is even lower! I am now paying just 0.25% for all my foreign exchange transfers, which is great!
In addition to using it for receiving your payouts or disbursements from Amazon, you can also use it for personal transfers such as transferring funds for your child's overseas education or property investment. The rate is much better than any bank can offer, even for premier, priority or privilege clients.
Have a look at the rate table below for the new pricing structure.
You can click the button below to sign up for a free WorldFirst account. There are no fees charged for account opening and no minimum balance to maintain, unlike some banks. WorldFirst only makes the 0.15% to 0.50% margin when you convert and send money through them.
With effect from 7 August 2019, WorldFirst is revising their rates lower and their new pricing is much better for us!
The forex spread (aka exchange rate or "fees" if you wan to call it that) for international transfers starts from just 0.5% or less. If you transfer more, the rate is even lower! I am now paying just 0.25% for all my foreign exchange transfers, which is great!
In addition to using it for receiving your payouts or disbursements from Amazon, you can also use it for personal transfers such as transferring funds for your child's overseas education or property investment. The rate is much better than any bank can offer, even for premier, priority or privilege clients.
Have a look at the rate table below for the new pricing structure.
You can click the button below to sign up for a free WorldFirst account. There are no fees charged for account opening and no minimum balance to maintain, unlike some banks. WorldFirst only makes the 0.15% to 0.50% margin when you convert and send money through them.
Best ways to receive payouts from Amazon
As an online seller based in Singapore but selling in the US and Europe, one of the first services needed was a payment solution to receive funds in the US and UK. For me, these include disbursements from selling on Amazon .com and .co.uk, and Amazon Associate affiliate payouts. If you are a US based seller wanting to sell in the UK you will also find WorldFirst useful. And UK based sellers wanting to sell in the US can consider both options.
Note: If you are a seller in the Eurozone, US, UK, Australia, New Zealand, India, Hong Kong or Canada, Amazon supports payouts directly into bank accounts in those countries (http://www.amazon.com/gp/help/customer/display.html?nodeId=200501140).
However if your payouts involve currency conversion, Amazon's conversion rates are very poor and the options here will help you maximize earnings.
Some possible options:
Note: If you are a seller in the Eurozone, US, UK, Australia, New Zealand, India, Hong Kong or Canada, Amazon supports payouts directly into bank accounts in those countries (http://www.amazon.com/gp/help/customer/display.html?nodeId=200501140).
However if your payouts involve currency conversion, Amazon's conversion rates are very poor and the options here will help you maximize earnings.
Some possible options:
- Incorporate a US company with a US bank account. Of the three options, this would be the most expensive and also require that you then file tax returns in the US (these could include corporate tax, income tax and sales tax). This also means you would have to hire a US CPA. However it is something to consider if you have considerable capital and revenue in the US or US tax rates are lower than in your local jurisdiction.
- Using a 3rd party currency exchange/transfer service, which is what this post is about. The options I use are:
- Payoneer
- WorldFirst
- TransferWise
Payoneer Review
I started with Payoneer in late 2013 as it was the only solution I could find (and also because Singapore has a Free Trade Agreement with the US so I do not have to pay double taxes on profits or income, and Singapore tax rates are among the lowest in the world so I'd rather sell as a Singapore registered entity). Essentially Payoneer allows you to receive ACH transfers from US companies and SEPA transfers from EU companies, directly to your Payoneer Account. Payoneer's fees are
The process of registering a Payoneer account is pretty simple. Just sign up online and upload documentary proof of your ID and address. Then wait 2-3 weeks to receive your Payoneer debit card which you will need to activate the account using the card number. You then go into Amazon or whatever company you want you receive payments from and fill in the Payoneer bank account details.
My strategy for using Payoneer from 2013 to 2015 was to use it for funds that I wanted to reinvest into inventory purchases for selling on Amazon US. This is because Payoneer is transacted in USD so if I receive Amazon US payouts and use that to pay for inventory purchases in USD, I avoid two foreign currency transactions. With Payoneer I would lose 2% in fees (1% to receive and 1% on expenses). If I transferred back to my local currency and then purchased inventory in USD with my local SGD credit card, total fees would be at least 4% or more due to 2x currency conversion.
Additionally, Payoneer comes with a debit card that is useful to pay suppliers who accept card payments in USD. But having a debit card has pros and cons, as explained in the next paragraph.
So I like Payoneer for reinvestment of capital. However something happened this week (Mar 2015) which made me dissatified with Payoneer's system. There was an unauthorized charge on my Payoneer card and Payoneer duly blocked the transaction and deactivated the card, which was good. However I have to pay $12.95 for a new card to be sent to me. This will take 2-3 weeks and in the meantime my account is completely frozen. Sure I understand that I cannot use the debit card, till the new card gets here, but I can't even receive payments that are made to the Payoneer bank account! I felt this was ridiculous and contacted Payoneer customer service. Apparently that's just the way it is - all functions are blocked till I reactivate the account by keying in the new MasterCard info which I will only have when the card arrives. That resulted in my last Amazon payout to Payoneer bouncing which is terrible for my cash flow and repurchasing. So a few thousand in the account is stuck and an incoming deposit bounced. That's over $10,000 in sourcing money stuck!
Since I also like to purchase only 1-2 months worth of stock at a time, that also means I am low on inventory! Lesson learnt? Use WorldFirst more together with local credit cards that give big cashback or rewards to offset the higher transaction costs for currency exchange.
Payoneer Pros:
- 1% of each payment received using the service
- 1% of each payment made using the Payoneer debit card
- 2% or lower foreign currency exchange rate to transfers/withdraw funds to your local currency
- $29.95 annual fee
The process of registering a Payoneer account is pretty simple. Just sign up online and upload documentary proof of your ID and address. Then wait 2-3 weeks to receive your Payoneer debit card which you will need to activate the account using the card number. You then go into Amazon or whatever company you want you receive payments from and fill in the Payoneer bank account details.
My strategy for using Payoneer from 2013 to 2015 was to use it for funds that I wanted to reinvest into inventory purchases for selling on Amazon US. This is because Payoneer is transacted in USD so if I receive Amazon US payouts and use that to pay for inventory purchases in USD, I avoid two foreign currency transactions. With Payoneer I would lose 2% in fees (1% to receive and 1% on expenses). If I transferred back to my local currency and then purchased inventory in USD with my local SGD credit card, total fees would be at least 4% or more due to 2x currency conversion.
Additionally, Payoneer comes with a debit card that is useful to pay suppliers who accept card payments in USD. But having a debit card has pros and cons, as explained in the next paragraph.
So I like Payoneer for reinvestment of capital. However something happened this week (Mar 2015) which made me dissatified with Payoneer's system. There was an unauthorized charge on my Payoneer card and Payoneer duly blocked the transaction and deactivated the card, which was good. However I have to pay $12.95 for a new card to be sent to me. This will take 2-3 weeks and in the meantime my account is completely frozen. Sure I understand that I cannot use the debit card, till the new card gets here, but I can't even receive payments that are made to the Payoneer bank account! I felt this was ridiculous and contacted Payoneer customer service. Apparently that's just the way it is - all functions are blocked till I reactivate the account by keying in the new MasterCard info which I will only have when the card arrives. That resulted in my last Amazon payout to Payoneer bouncing which is terrible for my cash flow and repurchasing. So a few thousand in the account is stuck and an incoming deposit bounced. That's over $10,000 in sourcing money stuck!
Since I also like to purchase only 1-2 months worth of stock at a time, that also means I am low on inventory! Lesson learnt? Use WorldFirst more together with local credit cards that give big cashback or rewards to offset the higher transaction costs for currency exchange.
Payoneer Pros:
- Quick, simple setup.
- Ability to receive funds from many sources and transfer to your foreign bank account.
- Ability to minimize foreign currency transaction fees if receiving funds in the US and using the Payoneer debit card to fund purchases.
- Inefficient system that does not separate functions. Once one goes down, everything goes down.
WorldFirst Review
After a year of using Payoneer only, I decided to also open an account with WorldFirst in Oct 2014. My reasons were:
As it turned out, I'm glad I have a WorldFirst account as my Payoneer bridge did get blown up and will take 2-3 weeks to rebuild.
I have 2 WorldFirst accounts, one in USD and one in GBP. Since Jan 2015, I have been alternating Amazon US payouts between Payoneer and WorldFirst. The former for reinvestment and the latter to pay myself and develop other income streams.
I also started selling on Amazon UK in the middle of 2014 and it is far lower cost to receive GBP payoutsto my WorldFirst GBP account then to my Singapore bank account vs having Amazon UK convert GBP to USD and payout to Payoneer at Amazon's conversion rate of about 4%.
The main thing to note about WorldFirst is that it specializes specifically in low-cost foreign currency transactions. WorldFirst only makes money through currency conversion when you withdraw funds into your local bank account. This has a number of useful applications for sellers like me who are not based in either the US or UK. It is also useful for a US based seller who sells in the UK or a UK based seller selling in the US.
Unlike Payoneer, there is no debit card facility. This has its pros and cons. It means there is only one function - receive funds in the US or UK, convert and transfer them to your local bank account. This keeps it simple and minimizes potential complications as happened to my Payoneer account. WorldFirst also is the lowest cost way I know of to receive my USD and GBP payouts into my SGD bank account.
- Lower foreign exchange costs (2 to 2.5%) vs Payoneer (1% + 2.75%). Update: WorldFirst has revised rates down, and the spread now starts from as low as 1% to 2.5%. I know because they just changed my rate to 1%! :)
- I started selling on Amazon.co.uk and wanted a more efficient way to transfer payouts to Singapore .
- I like to have multiple options so I have alternatives in case something goes wrong. As an ex-military demolitions sergeant, I always use the analogy of having more than one bridge so you are not trapped if one gets blown up.
As it turned out, I'm glad I have a WorldFirst account as my Payoneer bridge did get blown up and will take 2-3 weeks to rebuild.
I have 2 WorldFirst accounts, one in USD and one in GBP. Since Jan 2015, I have been alternating Amazon US payouts between Payoneer and WorldFirst. The former for reinvestment and the latter to pay myself and develop other income streams.
I also started selling on Amazon UK in the middle of 2014 and it is far lower cost to receive GBP payoutsto my WorldFirst GBP account then to my Singapore bank account vs having Amazon UK convert GBP to USD and payout to Payoneer at Amazon's conversion rate of about 4%.
The main thing to note about WorldFirst is that it specializes specifically in low-cost foreign currency transactions. WorldFirst only makes money through currency conversion when you withdraw funds into your local bank account. This has a number of useful applications for sellers like me who are not based in either the US or UK. It is also useful for a US based seller who sells in the UK or a UK based seller selling in the US.
Unlike Payoneer, there is no debit card facility. This has its pros and cons. It means there is only one function - receive funds in the US or UK, convert and transfer them to your local bank account. This keeps it simple and minimizes potential complications as happened to my Payoneer account. WorldFirst also is the lowest cost way I know of to receive my USD and GBP payouts into my SGD bank account.
TransferWise Review
I've started using TransferWise as a complement to World First in the last 2 or 3 years.
I like to use both for different reasons.
I use World First when the transfer involves a currency conversion, because World First has the lowest forex spread (exchange rate). World First can also be used to transfer USD to a USD account, such as to a supplier, where no currency conversion is involved. World First's fixed fee for USD-USD transfers is USD15.
TransferWise has a slightly higher forex spread of 0.4-0.6 compared to 0.15-0.50 for World First. However TransferWise fixed fee for USD to USD bank transfers is lower at USD1.40 when transferring to a bank account in the US, and USD4.60 when transferring to a USD bank account outside the US, such as a supplier's USD bank account in China, Thailand, etc.
Practically, I switch my Amazon payouts to deposit with World First when I want to transfer it back to my local currency, and to TransferWise where I keep an operating cash balance that's used to pay USD to suppliers.
I like to use both for different reasons.
I use World First when the transfer involves a currency conversion, because World First has the lowest forex spread (exchange rate). World First can also be used to transfer USD to a USD account, such as to a supplier, where no currency conversion is involved. World First's fixed fee for USD-USD transfers is USD15.
TransferWise has a slightly higher forex spread of 0.4-0.6 compared to 0.15-0.50 for World First. However TransferWise fixed fee for USD to USD bank transfers is lower at USD1.40 when transferring to a bank account in the US, and USD4.60 when transferring to a USD bank account outside the US, such as a supplier's USD bank account in China, Thailand, etc.
Practically, I switch my Amazon payouts to deposit with World First when I want to transfer it back to my local currency, and to TransferWise where I keep an operating cash balance that's used to pay USD to suppliers.
Conclusion: Payoneer, World First, or TransferWise?
I highly recommend World First and TransferWise. But if World First or TransferWise are not available in your country, then sign up with Payoneer.
World First reliable and has excellent service. In the countries where they operate, they typically have a local office and assign an account manager to each client (no matter whether you are a small client having made $0 transfers or a big client).
In Singapore where I'm based, World First is registered with the Monetary Authority of Singapore (MAS) and has an office that assigns a local account manager that can personally assist every person that opens an account here.
As with income streams, sources, sales channels, prep services, etc., I always like to have 2 or more options available. You never want your business to be completely dependent on any one stream - so I have both. But have hardly used Payoneer in the last 2 years.
World First reliable and has excellent service. In the countries where they operate, they typically have a local office and assign an account manager to each client (no matter whether you are a small client having made $0 transfers or a big client).
In Singapore where I'm based, World First is registered with the Monetary Authority of Singapore (MAS) and has an office that assigns a local account manager that can personally assist every person that opens an account here.
As with income streams, sources, sales channels, prep services, etc., I always like to have 2 or more options available. You never want your business to be completely dependent on any one stream - so I have both. But have hardly used Payoneer in the last 2 years.
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Best if you are in a country where World First or TransferWise is not available.
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Best for currency conversion due to low forex spread (exchange rate).
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Best for USD to USD transfers such as paying suppliers from your USD balance due to lowest fixed bank transfer fees (USD1.05 fee to transfer USD to a US bank account and USD4.60 to transfer USD to USD bank account outside the US such as China)
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