Greetings my dear readers. Today I am going to review Payoneer’s Virtual US Bank Account offering. A while back I was invited by one of their representatives to beta test this new service offering and after a fairly extensive period of usage I am glad to report that finally I have enough info and experience to write a review, so here it goes.
Virtual Bank Account you say? Yes, that’s right. It’s quite an innovative solution in my opinion. Payoneer’s Virtual US Bank Account product is extremely well suited for cash payout needs, such as affiliate programs, dispersing commissions, and various other payment needs. Don’t let the label “virtual” fool you though. The account is quite real. We will get into the details of how it works and all that fun stuff a bit later on, but first permit me to educate you a bit about the Payoneer company.
(quote from their website):
Payoneer allows organizations to pay large numbers of people around the world, efficiently and securely directly to their Prepaid MasterCard® cards, avoiding the delays and heavy surcharges of more traditional methods such as bank transfers and international checks. Payoneer is a privately-held company and a registered MSP with MasterCard.
Committed to meeting the highest standards in service, security, and privacy, Payoneer has partnered with the First Bank of Delaware. Payoneer utilizes, and continually invests in, top-of-the-line secure technology and adheres to stringent regulations for customer privacy, authentication and identity verification. Payoneer complies with the required KYC (Know Your Customer), BSA (Bank Secrecy Act), AML (Anti-Money Laundering) procedures and OFAC (Office of Foreign Assets Control). Read more about Payoneer’s privacy policy.
Founded in 2005, Payoneer employs 55 people, including a team of experienced financial and technology professionals, and is headquartered in New York with R&D offices in Tel-Aviv, Israel. Payoneer is backed by private and venture capital investors including Greylock Partners, Carmel Ventures, and Crossbar Capital.
I can confirm that indeed they have a business relationship with the First Bank of Delaware as I’ve had a few people send me ACH payment and if you know anything about such payments you’d know that the sender’s bank asks for and verifies the receiver’s bank.
Why do I need a Virtual US Bank Account?:
Good question, and here is the answer. The cool thing about Payoneer is that it allows people that live outside the US to receive direct Automated Clearing House (ACH) deposits/payments without the necessity of actually having a US bank account. I know you can technically open up a US Bank Account, but for foreigners it’s more difficult and cumbersome as they have to actually travel to the United States to do so. Payoneer allows you to have your very own US Bank Account with minimal effort.
How does it all work?:
The way in which their Virtual US Bank Account offering works is quite simple really, and I wonder why there aren’t many similar offerings out there. Payoneer maintains a series of sub-accounts under its main account, which is held with the First Bank of Delaware (click here to find out more about this bank) When an ACH transfer is initiated, each of these sub-accounts is referenced using its own routing and account numbers. When the funds are credited to one of these sub-accounts, Payoneer loads the funds to an associated “prepaid debit” card. This debit card will have YOUR name on it. Essentially what they’re allowing you to do is to “rent” their bank account.
So like I said you will get a MasterCard prepaid debit card to go along with your US Bank Account. Here an picture of the welcome letter debit card I received (click on the thumbnail to view the full image):
For me the sign-up process was very simple, and I imagine it will continue to do so for everyone once this product is available to the masses. Once I signed up and one of Payoneer’s account representatives approved my account I patiently waited to have the debit card mailed out to me. When I received it I went to Payoneer’s website and activated the card and I was up and running. The whole process was painless and smooth.
What can I use Payoneer’s Virtual US Bank Account for?
The primary purpose of this service is to allow you to receive ACH (direct bank to bank) payment from anyone in the United States. It is a perfect payment collecting solution for receiving secure payments from anyone with a US bank account. When you wish to receive a payment you simply give your bank account details to whoever is supposed to send you funds and they just go to their bank (or log online) and make the payment – quick, secure, but best of all, fraud proof.
Also since you’re getting a prepaid MasterCard debit card along with your Virtual US Bank Account you can load money into your account via Western Union and withdraw it anywhere in the world. This is perfect if you don’t want to carry cash or a credit card with you. This is just like using your bank’s debit card. And since this is a MasterCard debit card you can use it to pay for purchases wherever MasterCard is accepted.
Can I link my Virtual US Bank Account to my PayPal account?
You betcha! Non US residents will for sure agree that this is one cool feature. I bet you now have a big grin on your face. If you live in a country where you can open a PayPal account but can’t link your local bank account to your PayPal account then Payoneer’s Virtual US Bank Account is exactly what you must have. After you’ve linked your US Virtual Account to your PayPal account you simply withdraw money to your US bank account and then you can withdraw it at any ATM in the world.
However there is one limitation that you must keep in mind. YOU CANNOT WITHDRAW money from your US Virtual Bank Account into your PayPal account. In other words the flow of money must go in only one direction, from your PayPal account into your Virtual US Bank Account. Please DO NOT attempt to withdraw money from your Virtual US Bank account into your PayPal account because Payoneer’s bank will refuse this attempt. But it what is worst is that PayPal will notice the rejected transfer and disable and PERMANENTLY BLOCK your Payoneer US Virtual Bank Account. That means that you won’t EVER be allowed to add this bank account again.
There is a way you can contest this by sending proof that you own this account, but trust me you don’t want to go through that hassle. I accidentally made the very mistake I’m warning you not to make and in spite of me sending all the necessary proof they asked for they still did not reinstate my US bank account. Yeah, I know, PayPal is a royal pain the backside sometimes. So make sure you don’t make the same mistake I did.
Pricing & Fees
I found Payoneer’s fees to be fairly reasonable. Here is a table that outlines all their fees:
| Card | |||
| Card activation – US | $9.95 | Per card | One time – when card is first loaded |
| Card activation – Non US | $19.95 | Per card | One time – when card is first loaded |
| Loading of payoneer payments | $2.00 | Per card | Each time card is loaded |
| Monthly account maintenance | $3.00 | Per card | From available card balance each month |
| Transfer funds from card to bank account | $ 00.00 | Per Trx | Each time a transfer in being made |
| Replacement card – within US | $9.95 | Per card | One time – when issuing replacement card |
| Replacement card – outside US | $19.95 | Per card | One time – when issuing replacement card |
| ATM Cash Withdrawals or Transactions or Transactions | |||
| ATM withdrawal – US | $1.35 | Per Trx | When withdrawal is requested |
| ATM withdrawal -outside US | $2.15 + upto 3% of transaction amount | Per Trx | When withdrawal is requested |
| Declined ATM withdrawal | $0.90 | Per Trx | When withdrawal request is declined |
| Purchase Transaction within US | $0.00 | Per Trx | When card is used for purchases |
| Purchase Transaction outside US | $0.00 + upto 3% of transaction amount | Per Trx | When card is used for purchases |
Is their website easy to use?
I found their website interface to be very easy to use. The interface is clean and functional without any clutter. When you log into your Payoneer members section you’ve got everything you need to manage your debit/US virtual bank account in one section. All transactions on your account will be plainly visible on the main members page. There you can also change your debit card’s PIN code, print out an image of a “void check” which you can give to your employer or anyone from whom you expect to receive recurring ACH payments.
Is this service safe?
I believe it is. The money is sitting in a bank account with a reputable and FDIC (US Federal Deposit Insurance Corporation) insured Bank. I received hundreds of dollars in payments to my Virtual US Bank Account and withdrew all of that money without a hitch. I just leasurely walked on over to the nearest ATM, inserted the debit card, punched in my PIN code and withdrew cold hard cash in my local currency. The whole process took me not even ten minutes.
Other items of interest
I’d really like to commend the Payoneer staff for their excellent customer service. During my whole beta testing period I received absolutely stellar support from their customer service department. I mostly dealt with one gentleman by the name of Aryeh. Whenever I ran into a snag he always promptly responded to my e-mails. Aryeh, I know you’ll be reading this review sooner or later, so cheer mate, and thanks for your support! Best of luck to you and your company!
Conclusion
In conclusion I’d like to state that I am very satisfied with my Payoneer US Virtual Bank account and I’m definitely going to continue to make use of it. Now if only I can convince PayPal to reinstate the link between it and my Virtual US Bank Account I’d be in heaven.
Currently Payoneer’s Virtual US Bank Account service is not available to the masses, only to selected Payoneer prepaid debit card holders. So the first step you’d have to take if you want to have your very own US bank account is to get a Payoneer debit card. Then you can request of Payoneer to activate the US bank account feature. Unfortunately you cannot request a debit card directly from Payoneer. Instead you have to sign up for a card from a Payoneer partner website. Payoneer lists a few partners at the following section of their website:
http://www.payoneer.com/CS.aspx
One last thing, please bear in mind that you will have to comply with Payoneer’s KYC (know your customer) regulations!
For any other details, info, questions, inquiries, etc please visit the Payoneer homepage at:
Cheers,
Alan
http://alansmoneyblog.com
(Post revised Nov 20,08)