Online payment systems like PayPal have been game-changers for freelancers. They have opened a new world of global business opportunities, making it easier to work with foreign clients from any part of the world, including Ukraine.

The world’s most popular service, PayPal, however, only partly works in Ukraine: it lets you send money abroad — not receive it. And as the niche was open, many look-alike services popped up such as Wise, MoneyGram and Payoneer.

Payoneer is the most popular among Ukrainian freelancers — about 30% of them use the American service, according to experts. These are mostly tech specialists, who typically work with foreign clients and need to get transfers fast and cheap.

Payoneer processed more than $44 billion in payments last year. In 2021, it plans to generate $430 million in revenue from its service. The company is profitable, but it doesn’t disclose its results.


Igor Kovaliov, Payoneer’s general manager in Ukraine and Belarus, believes that Ukrainian tech freelancers are conquering the world and that Payoneer is here to “empower” them to do it.

“We help Ukrainian entrepreneurs create more jobs and contribute to the booming digital economy,” Kovaliov told the Kyiv Post.

In PayPal’s absence

When GlobalMoney launched Ukraine’s first-ever online service to transfer money without having to open a bank account in 2013, freelancers were among the first to use the service, according to the company’s commercial director Alexandr Turkevich.

Since then, the online payment market in Ukraine has been “actively developing,” Turkevich said. The prospects for future growth are even brighter. But while a variety of services exist to transfer money domestically, including GlobalMoney, international payment services “aren’t very developed,” he added.

Many anticipated PayPal to come, but the company has never rolled its service out in Ukraine.

Ilia Kenigshtein, the founder of the coworking chain Creative States and initiator of the movement to bring PayPal to Ukraine, said the National Bank’s restrictions and oligarchs block PayPal’s arrival.


“The Iron Curtain that we installed for ourselves,” Kenigshtein describes the situation.

Ukraine is not a priority for PayPal but Xoom, a PayPal’s subsidiary that allows users to send money directly to banks and cash pick-up locations abroad, entered the Ukrainian market in 2018.

The San Francisco-based company’s service here is limited. According to Kenigshtein, Xoom users can only withdraw payments from the United States at cash pick-up locations, which includes banks like Oschadbank, PrivatBank and UkrGasBank.

Ukraine is by far not the only country where PayPal’s full service doesn’t exist. Other post-Soviet countries like Azerbaijan, Armenia and Belarus fall under the same pattern. PayPal also bailed out of Russia last year and only offers cross-border payments there.

The rise of a new era

Luckily for local freelancers who sell their services abroad, there are other options. As the demand appeared, online services have popped up to satisfy the needs. One of them was the American financial services company Payoneer.


Payoneer provides a virtual bank account to accept and send money worldwide. It has partnered with thousands of digital marketplaces, including Upwork, a website that matches clients and freelancers.

After freelancers complete a job through the Upwork website, they receive payment on their Upwork accounts. Then, they transfer it to their Payoneer account.

Though the commission to withdraw money from different online platforms or networks may vary, the transfer process from Upwork to Payoneer costs $1 no matter the sum, typically taking two days. But there is also an instant option available for $2.5.

Once the money is in the Payoneer account, users can send the money to their local bank accounts for a 2% commission.
Payoneer offers multiple ways to get paid online but it’s only meant to be used for sending or receiving business payments.

Rising competitors

Wise, formerly known as TransferWise, also offers a business account for transferring money abroad.

Wise users can make international payments without money ever leaving the country of the currency.

First, they transfer the amount from their local bank account to the Wise account. Once the money is deposited, Wise will exchange the currency at the average market rate and provide the equivalent amount from its account where the recipient is located to complete the payment transfer.


The London-based financial technology company has accounts in many countries and in over 50 currencies to avoid high bank exchange fees for their customers.

If the transfer amount doesn’t exceed $140,000 to a recipient in Ukraine, the commission takes a small fixed fee of $0.25 and 2.23% of the transfer. The conversion calculator available on the site will count up the exact cost of the money transfer to the designated currency.

Moneygram is also a popular choice when making international payments. The American money transfer company bases fees on the amount for the transfer and which payment method is used.

There are two ways to send money to Ukraine — cash pick-up at any MoneyGram agent location or directly paying to the recipient’s bank account.

If a sender was to transfer $1,000 to a recipient in Ukraine, the fee is $14.99 (about 1.5%) for cash pickup and $12.99 (about 1.3%) to a bank account.

Western Union, one of the largest and oldest money transfer providers in the world, has over 9,000 branches in Ukraine, where it works with Ukrainian banks like PrivatBank and Raiffeisen Bank Aval. Unlike Payoneer, Western Union doesn’t allow freelancers to open local receiving accounts in the currency of their employers. (Kostyantyn Chernichkin)

Global virtual accounts

While there are many other options out there, freelancers said they like to use Payoneer because it is convenient to have all the payments in one place.

Payoneer account holders can also register for the Global Payment Service that allows them to have local receiving account details in different currencies, which they can share with clients when requesting a payment.

The receiving accounts in certain currencies work as if the users had real local bank accounts, enabling them to get payments from clients and marketplaces through local bank transfers. The money transferred this way goes directly into the base Payoneer account.


Oleksandr Slobodskyi, a design freelancer who’s been using Payoneer for seven years, said some sites like Amazon require a U.S. bank account to receive money and many customers prefer simple bank transfers.

Slobodskyi said the Global Payment Service can be “very convenient” when working with several international clients.

“For clients, it looks like a quick and cheap local bank transfer,” Slobodskyi, who writes blogs about payment systems, told the Kyiv Post.

The U. S. financial service company also offers an option to order a physical bank card to any part of the world. It’s linked to the Payoneer account, which can be used at ATMs, in stores or online — anywhere MasterCard is accepted.

The prepaid cards are issued for free as long as the user has earned the first $100 in the Payoneer account. It takes approximately 2–3 weeks to get to Ukraine, and the annual card maintenance fee is $29.95. There’s also a 3.5% fee for any transaction made in Ukraine.

Freelance finance expert Oleg Bilous said the debit card is not very useful in Ukraine because of the high currency conversion rate, but having a Payoneer account still helps him save money by avoiding taxes.


Like most freelancers, Bilous is registered as a private entrepreneur. His classification requires a tax rate of only 5% (if he earns under $253,000 a year). To remain eligible for the reduced tax rate,

Bilous makes sure not to go over the limit by leaving the excess amount on his Payoneer account.

Many freelancers, he said, take advantage of Payoneer, avoiding taxes altogether by transferring small amounts that don’t get noticed.

The growth in freelancing from Ukraine, however, is noticed. Ukraine ranked fifth in the world in freelance income growth. It’s an attractive destination because of a large number of specialists at a relatively low cost, according to Konstantin Rudenko, product manager at Freelancehunt.

Processing payments that freelancers receive from abroad, Kovaliov from Payoneer noticed a trend — the Ukrainian freelancers are “conquering international markets” and it is “impressive.”

Popular U.S. payment system PayPal only partly works in Ukraine (people can send but not receive money), which leaves a vacant niche for similar services like Payoneer, Wise and MoneyGram.
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