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High transaction fees can be a serious problem for online workers and stores. Shelling out cash just to accept a payment can eat into profit margins. PayPal, the online shopper’s favorite payment method, earns over 4% per transaction. Surely there’s another way.

Skrill, known in another life as Moneybookers, advertises fees and commissions that are often much lower than PayPal’s. The company is aggressively pursuing the EU market and has gained over 30 million customers so far.

Beyond the fancy banner ads and sales copy, Skrill likes to keep extra clauses and fees  out of the spotlight. Their services very often trump PayPal’s but at what cost? Switching to Skrill is worth it for some, but not for others. Find out which side of the fence you should sit on.

Debit Cards To Access Cash

PayPal and Skrill offer Debit cards to their customers, which enable instant access to funds. Using a debit card is safer than carrying cash or your own credit cards when abroad. It also means you don’t have to wait the few days for the company to transfer funds to your real bank account. I also find debit cards help manage spending Amber Money: Manage Your Personal Finances On Your Android Smart Device Amber Money: Manage Your Personal Finances On Your Android Smart Device Read More . Unfortunately, PayPal only offers this service to US users, while Skrill offers debit cards worldwide. This is what initially attracted me to Skrill.

PayPal Skrill Mastercard Debit

PayPal’s debit card for private users isn’t attached to your PayPal account directly, meaning you have to transfer funds from your PayPal account to the card.  However, for business accounts the debit card is attached directly to the account. ATM withdrawal fees (promoted as an alternative to transferring funds to your bank which can take days) cost $1 and purchasing from a foreign merchant online yields a 2.5% fee on top of the currency conversion fees PayPal already charges. Ouch.

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Skrill’s card on the other hand presents a much more straightforward approach. An annual fee of €10 is paid along with a €1.80 (~ $2.40) ATM withdrawal fee. All other day-to-day activities on the card are free.

Skrill Multiple Currencies

Although the more expensive option (particularly if using ATMs), Skrill’s card has a trick up its sleeve. To avoid currency conversion fees, you can get your card in Euro, USD, British Pounds, or Polish Zlotys regardless of where you live. Skrill is the cheaper option by a mile when you make an online purchase in a different currency or spend while traveling. This is particularly true if you’ll only be using the card to pay in-store, rather than withdrawing cash from ATMs.

So, if you’re a business user in the US it’s PayPal. Otherwise the world-wide availability of Skrill and the functionality of their card makes Skrill the better option.

Payment Gateways for Stores and Online Workers

For European users, Skrill can seem like the best option. Their 2.9% commission and €0.25 transaction fee trumps PayPal’s 3.4% and €0.35 fee. To receive €100, Skrill is €0.60 cheaper. If you plan on spending your funds via your debit card, then Skrill is the cheaper option. But if you withdraw it in cash or send it to your bank account, the extra €1.80 Skrill charges (as opposed to PayPal’s free withdrawals) obliterates any savings.

Skrill Merchant Services

Most merchants will net over €100. Skrill becomes the cheaper option when you break the €350 mark. The €1.80 withdrawal fee is eclipsed by €1.85 savings on commission and transaction fees.

Both PayPal and Skrill offer online payment gateway services, which are easy to integrate into e-commerce sites How To Easily Turn Wordpress Blog Into An E-Commerce Site How To Easily Turn Wordpress Blog Into An E-Commerce Site Read More . Unfortunately, Skrill again jacks up their fees by charging a €20 merchant fee (along with the normal receiving fees) per month in stark contrast to PayPal’s free gateway software.

What About Skrill’s Bad Reputation?

In its past life as Moneybookers, Skrill earned a bad name for itself around the Internet. Googling the company’s name quickly unearths forum posts and blog articles criticising the company’s charges. Regulated by the FCA in the UK and bound by EU monetary directives, Skrill is no “scam” as is often claimed online.

Skrill Bad Reputation

Every charge they can apply to your account is listed on their website, albeit in hard to find or easily overlooked places. Common grievances I found were:

  • If you stop using your account for a period of 12 months, €1 will be deducted monthly thereafter. Why? I have no idea. It seems like a sly way of slowly draining forgotten accounts for no good reason.
  • A refund fee. With PayPal, a seller can refund a customer. They receive their commission back too, but not the 35c transaction fee. This seems reasonable enough to me. With Skrill, transaction commissions are not reversed and the seller is charged an additional €0.49!

PayPal has its flaws, but it also has world-class security and insurance features as well as transparent fees. Their brand is certainly the most recognized and trusted for sending or receiving money online. This brings with it a certain degree of inherent trust among potential customers.

So, Should You Switch to Skrill?

For business owners, it is only worthwhile to switch to Skrill if your business has a high enough turnover to save money on Skrill’s cheaper transaction fees in order to compensate for their higher withdrawal and payment gateway charges. Fortunately, Skrill’s background fees are not so high for small to medium sized eStores also.

For private users, Skrill can be advantageous in one aspect. It’s free to receive money and spend it via their debit card. PayPal is lagging behind with offering EU users a debit card, but perhaps that’s because they’re focusing on PayPal Here, their real world mobile payment system PayPal Launches "PayPal Here" For Mobile Payments On-The-Go [Updates] PayPal Launches "PayPal Here" For Mobile Payments On-The-Go [Updates] Read More , launched last year.

As an EU citizen who gets paid in USD, I am often annoyed by PayPal’s fees Why You Don’t Have To Use PayPal For Online Transactions: 5 PayPal Alternatives Why You Don’t Have To Use PayPal For Online Transactions: 5 PayPal Alternatives Online shopping and online purchases have grown into something so important in many of our lives that it’s strange, at least for me, to think of a world where it doesn’t exist. PayPal is one... Read More . Nevertheless, their system is straightforward, has a good reputation and is almost universally accepted online. Notwithstanding exceptional circumstances (such as in India where their central bank severely limits PayPal’s functionality), moving to an alternative to PayPal 6 Online Payment Alternatives If You Hate PayPal 6 Online Payment Alternatives If You Hate PayPal Read More will likely be a costly endeavour, despite cheaper rates advertised in big print. I advise independent online workers and small stores to continue using PayPal if they are comfortable with it.

So, tell us which side of the fence you are on? Have you used Skrill for any transaction or does PayPal remain your trusty go-between?

Image Credit: Eurogears via Pixabay

  1. Arnab Sanyal
    September 3, 2016 at 6:20 pm

    I think withdrawing funds to primary account is costlier in Skrill with a fixed fee of Eur 3.95/per transaction in India. For Paypal it is 4.3 % of the transaction amount and is cheaper while receiving small sums.

  2. Dave
    August 4, 2016 at 12:05 pm

    I had been using PayPal for over 5 years and had a cordial relationship with the company until all hell broke loose. They wanted my personal details with the threat of limiting my account which I reluctantly gave and thought I was done (there have been a lot of scams). Even after giving them my personal documents nothing changed. They have an absolutely DEAD customer service and all your grievances fall on deaf ears. After about three months of haggling I switched to Skrill. Haven't had a problem yet. Even the verification process takes mere hours. The biggest advantage is perhaps that I can easily get my money to my mobile wallet in less than a minute. I don't think am switching back any time soon.

  3. Adri
    May 11, 2016 at 6:09 pm

    Paypal limits accounts for no reason,just because they suspect you are doing something "wrong" which ,they state ,violates their rules.Iknow a lot of e bauers who had their accounts limited definitively,as it happended to me,and it is better for every paypal user to find and test an alternative service ,because often it is not a "if they limit your account" but actually "when" it happens,,,Iam still not sure which alternative.

  4. Neena
    March 9, 2016 at 9:03 am

    I tried using Skrill as my client advised they have lower charges than PAYPal but i find out its much much more.
    They converted my USD Payment to EURO for no reason at a very very bad rate and then charged Rs.291/- as fees to remit it to my account in India.
    In the end I paid 6%+ fees to Skrill.
    Besides this, there's NO autowithdraw option - this entails more work. Also, the remittance is scrutinized by my banker which entails further delay. To top it up, my bank charges me a service tax and cess.

    I think its time to switch back to PayPal.

  5. David daviD
    June 26, 2015 at 1:33 am

    Skrill pros: Wide variety of payment methods

    Skrill cons: Freezes customers' cards sometimes, probably because it is often used for gambling. Also, if you want to close your Skrill account, good luck. They hold a large reserve, and don't like giving your money back, even after a month.

  6. Saib
    May 20, 2015 at 2:49 pm

    I used both Skrill and paypal as a business receiving payments for software sales
    Skrill pros: Many payment methods (but reports don't show what method your customer used, so you won't know if this is a benefit)
    Skrill cons: No Amex in USA, often refuses to accept payments, sometimes freezes customers' credit cards
    Paypal: Few payment methods, but more reliable, and faster/easier to set up

    I complained to Skrill about them freezing my customers' cards sometimes. They replied, but did not change anything. Seems like Skrill is used for gambling a lot, so they are more careful than paypal.

    So I use paypal now.

  7. CadeLewis
    April 20, 2015 at 10:07 pm

    Im Sri Lankan, and we have problem that we cannot receive money. so i tried to get some money using changing the country in my paypal. but its risky. so after few payments received i canceled it and moved to skrill. Wow its Fast, law cost service. never had a problem with that.
    sometimes it takes time to verify your account after that you are free as sky

  8. Collin
    March 27, 2015 at 4:30 pm

    I know one thing, If a company has a slightly better customer service than Paypal, it is worth trying it out. Dealing with them was very difficult when I encountered problems with my account. I am currently trying out an alternatives and will switch from Paypal as soon as I find a better service.

  9. Ben
    February 2, 2015 at 2:41 pm

    Hi guys and gals, thanks for the great comments.
    Question please, I am starting a new e-commerce site, based on a reacquiring monthly subscription.
    The monthly subscription fee per client is about $29 and we expect to bill some 500 clients per month ( $14500 per month total).

    Clients will be worldwide and not just a single location such as the EU.

    I'm unsure whom to use between Paypal and Skrill, any advise is welcome.

    Thanks
    Ben

  10. Dentoo
    February 28, 2014 at 1:01 pm

    easy solution to the question paypal or skrill: I use both ;) why limit yourself to one payment gateway?

  11. Erwin
    February 3, 2014 at 1:36 pm

    Always used Moneybookers without any problem but since it went over to Skrill, fees have been exploded. Transaction of $253 cost now $17, just losing money here!
    Closed accounts from Skrill today since bank transfer is cheaper now. Too bad the good service from moneybookers is history.

  12. Roy
    January 30, 2014 at 2:36 pm

    I'm from India and I must say both paypal and skrill have their pros and cons when it comes to receiving money in India. But of late, I have been noticing that Skrill is charging hidden costs during withdrawals. This makes paypal the better alternative over skrill because at least we can be sure of the amount that will be deposited in our bank accounts; with skrill it seems more like a lottery - you might get the whole amount that you are supposed to get or you might not! I have a small blog where I have compared paypal and skrill, especially for Indians. Do check it out - http://www.tipsforfreelancers.com

  13. Kendra
    January 24, 2014 at 12:47 am

    Do Skrill offer the customer insurance that they will receive what they believe they are buying?

  14. Anita
    December 21, 2013 at 9:28 pm

    I don't like Skrill since there are features that I use a lot on paypal that have no equivalent on skrill. Invoices are needed in my business and skrill does not have them. Also you cannot send money to other online banks which sucks.

  15. Akash
    November 14, 2013 at 6:52 am

    I am using skrill(moneybookers) for more than 6 years. Their transaction fees are not transparent and their customer service never answer a query related to transactions. I feel like cheated and they are not giving any response to my tickets. All my hard earned money were going to someone else pocket. Which is not fair. I have now planed to move to paypal. And i haven't used paypal before, lets see how things go with paypal. If someone from skrill reading this please atleast response to queries related to transactions.

  16. Rhomeo
    November 6, 2013 at 2:12 am

    Last month my uncle's account got frozen with $150 balance on paypal. They said they will hold it for 6 months. That was his hard earned money by working at Odesk. Sure thing after that incident he had a lot of troubles because that money is supposedly for the monthly expenses,he got 5 kids to feed. Now i created an account and my client paid me $50 and same thing happens to me. I was able to withdraw the first payment but with the 2nd payment from my boss they freezes my account. We both provided the necessary documents for us to retrieve our money but still they take hold on our accounts. I am sending e-mail and their response was automated. We are very disappointed with paypal,my uncle has been using their service for 5 years with no hassle.Now their service is not good for us, we hope we will not have the same problems in Skrill!

    • Rath
      November 27, 2013 at 10:36 pm

      Bro, i can help you get your uncle money back today! Email me. I got my money back right away

    • Rath
      November 27, 2013 at 10:36 pm

      I was in the same boat. I'm with skrill now.

    • Rhomeo
      November 28, 2013 at 1:20 am

      How did you do it?

  17. Matthew H
    September 16, 2013 at 8:05 am

    Brilliant article. As I'm sure you know, Paypal has a propensity to arbitrarily freeze people's accounts for no clear reason. Given that they aren't a bank, they are often in a position where they don't have to release the funds in a timely manner or answer to an ombudsman. As someone who gets paid by Paypal, this is a huge concern for me. I might give Skrill a go! Cheers!

    • Dean Sherwin
      September 16, 2013 at 12:00 pm

      Cheers Matt!

      I've had funds frozen by PayPal too. It was a few years ago so I can't remember the full details. Something about my client accessing his account from two different countries so they thought we were involved in laundering or something.

      Understandable to a certain point but I was left in the dark for quite a while with very little contact from their customer service dept.

      - Dean

  18. spoonshot
    September 14, 2013 at 8:51 pm

    Ah...Is their name "SKRILL" an acronym for something?...Some one's last name perhaps..? something...anything?....I mean it's not a pleasant sounding word..it just ...like something sneaky or bad is happening...maybe it's cause..shill is a word used as such...or that it spells kill....hell man I've no idea...I just find that name is is nasty ..(and quite poss. in league with Satan!.... ;v).......

  19. Lawrence
    September 14, 2013 at 6:48 pm

    Log into your PayPal debit card account. go to were it says my account then to were it says pricing plan.

  20. Lawrence
    September 14, 2013 at 4:57 pm

    PayPal charges a fee for their debit card now at 4.95 a month

    • Joel L
      September 14, 2013 at 5:17 pm

      I've had a PayPal debit card for nearly a year and I've never heard of a monthly fee. Source?

  21. James B
    September 14, 2013 at 7:22 am

    Actually, PayPal UK does have a debit card - I have one. It's possible you weren't offered it if your account activity was less than whatever threshold, but that seems unlikely if you're getting paid there. Unfortunately, it only works with GBP balance, and there's a fee for paying in foreign currency, which is the only reason I applied for it in the first place (Tesco reward credit card also charges an internation). So it's useless to me and I've never used it.

    Unrelated, but good to know: Halifax credit card doesn't charge fee on international purchases, and no annual fee. I've now diverted all my hosting fees in USD to charge on that, and anything I buy from China. Saving hundreds year in fees!

    • Dean Sherwin
      September 14, 2013 at 6:59 pm

      Hi James,

      I can't find much on a UK debit card from PayPal - although it does seem to exist. Good find. But I wonder why they keep it hush hush...

      I'm in Ireland so I guess that's why I can't avail of one. I'd love a PayPal debit card in Euro. Looks like your fellow Europeans will have to do without! :P

      Thanks for the info!

  22. Steve
    September 14, 2013 at 4:52 am

    I had a very bad experience with Skrill recently, after years of using Moneybookers with no major problems. I had been using a merchant account with Moneybookers, which recently became Skrill. On July 15th of this year, they simply stopped processing credit card payments. No warning, no explanation. In addition, they are still holding a portion of my account balance as 'reserve' and won't release it. My requests for an explanation have gone ignored by their support team. For that reason, I am now advising people to stay away from Skrill.

    • Dean Sherwin
      September 14, 2013 at 6:57 am

      That sounds odd. Although there are similar tales about them.

      Perhaps your next step should be an email to the FCA in the UK who regulate Skrill.

  23. Some Coward
    September 14, 2013 at 4:06 am

    Dwolla > PP & Skrill combined - get with it dude...

    • Dean Sherwin
      September 14, 2013 at 6:55 am

      Thanks. I must check that out! :)

  24. Howard B
    September 14, 2013 at 2:34 am

    PayPal has one thing that no other "money service" has...its parent company, eBay.

    • Dean Sherwin
      September 14, 2013 at 6:55 am

      Very true.

      The insurance when making eBay purchases can be a big plus.

  25. Andre
    September 14, 2013 at 12:38 am

    I've been using both Skrill qnd PayPal for more than a year and the first thing I want to say is that Skrill's debit card is NOT available worldwide but only to EU citizens. But Skrill does support worldwide money transfers while PayPal has a list of supported countries.
    The other thing is Skrill is supported by very few websites. So for me the solution is to use both services. For example you may use Skrill to receive money if PayPal doesn't allow money transfers to your country, and PayPal to buy things on the online stores that don't support Skrill.

    • Dean Sherwin
      September 14, 2013 at 6:54 am

      It's give and take for both services. PayPal is quite restricted in some countries for one reason or another. The different world currencies available for Skills' debit card can be a big help to dome, but for most PayPal is fine.

  26. Sebastian S
    September 13, 2013 at 10:10 pm

    I've had awful experience with moneybookers in the past. Even though I had to verify my UK address 4 times and was never told why I had to do it so many times, I purchased from somebody with a verified UK address and it turned out they didn't live in the UK and that moneybookers had not made them verify their address even once.

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