Payoneer - the popular global payment platform widely used by freelancers and small businesses - has implemented a significant fee hike for Pakistani users.
The newly introduced 3% withdrawal fee, effective immediately, has caused concern among tens of thousands of freelancers and digital professionals who depend on Payoneer for cross-border transactions.
This change marks a 50% increase in withdrawal fees for non-local currency transactions and comes as a blow to the growing freelance industry in Pakistan, which has become a global hub for online workers.
What’s changed?
The new fee structure directly impacts Payoneer users who transfer funds to bank accounts in foreign currencies, such as US Dollars, Euros, and British Pounds. With Pakistan’s rapidly growing freelancer community, the timing of this change raises several questions about its long-term effects on the digital economy.
Key changes:
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Withdrawal to Foreign Bank Accounts: The fee for transferring funds to foreign bank accounts has increased from 2% to 3%.
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Transfers to Third-Party Bank Accounts: Previously free, this service now incurs a 3% fee.
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Internal Payoneer-to-Payoneer Transfers (USD, EUR, GBP): For amounts above 500 units, a fee of 0.60% will apply, while smaller transfers will incur a fixed 3.00 fee.
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Domestic Payoneer-to-Payoneer Transfers (USD, EUR, GBP): Now comes with a 3.00 fee, even for transactions between local Payoneer users in Pakistan.
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Receiving Payments: Payments under $100 are subject to a $1 fee, while payments equal to or exceeding $100 are subject to a 1% fee.
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Other Currencies (GBP, EUR, CAD, AED, AUD): Similarly, receiving payments in these currencies under $100 will incur a $1 fee, and amounts over $100 will be charged at 1%.
The most notable change is the imposition of the 3% fee for transferring funds to third-party bank accounts, which was previously free. This adjustment could significantly affect individuals and businesses that rely on Payoneer for cross-border payments.
Impact on Pakistani freelancers
Pakistan has emerged as one of the largest markets for freelancing in the world. According to Payoneer’s 2023 Global Gig Economy Index, Pakistan ranks among the top countries for freelancing, with over 3.8 million freelancers contributing significantly to the national economy.
The freelance industry in Pakistan is estimated to be worth over $1 billion, with thousands of professionals providing services across sectors like IT, web development, graphic design, content writing, and digital marketing.
Freelancers in Pakistan are now facing higher costs for accessing their earnings, which could discourage many from using Payoneer or force them to seek alternative payment methods. Many of these freelancers, especially those working with international clients, depend on platforms like Payoneer for receiving payments in a timely and cost-effective manner.
The new fee structure could erode their profits, affecting not only individual freelancers but also small businesses that depend on global transactions.
Why Payoneer made change
Payoneer’s decision to increase fees comes amidst a broader trend of rising financial transaction costs. As cross-border payment systems grapple with inflation, currency fluctuations, and rising operational costs, Payoneer has had to make these adjustments to sustain its services.
While the company has not provided specific details on why Pakistan was chosen for this fee hike, the growing number of online transactions and Payoneer’s dominant position in the Pakistani market make it a target for such changes.
The 3% fee hike is especially significant given the proportion of freelance workers in Pakistan who rely on Payoneer. According to Freelancing in Pakistan 2023, approximately 30% of freelancers use Payoneer as their primary payment platform. The impact of these new fees could discourage freelancers from continuing to use Payoneer, potentially driving them to explore other payment platforms like PayPal, Wise, or Skrill, though these alternatives come with their own limitations and regional restrictions in Pakistan.
For small businesses in Pakistan that rely on Payoneer to receive payments from international clients, this fee hike could lead to increased operational costs. As businesses scale globally, the ability to manage international payments effectively becomes crucial. This hike could lead to businesses exploring new payment gateways or even absorbing the extra costs, which may negatively affect their profitability.
