Cross-Border Affiliate Payments: Banks, PayPal and Payoneer

Affiliate marketing is one of the pillars of modern ecommerce. Hundreds of independent networks, such as, MediaWhiz, Convert2Media and Media Shakers, connect affiliates with merchants, which drives traffic to the merchant sites and earns referral fees for the affiliates. But, actually paying those fees to affiliates in non-U.S. countries – especially underdeveloped countries – can be tricky.

What, Exactly, is Affiliate Marketing?

Before discussing cross-border affiliate payments, it’s a good idea to define the basic meaning of affiliate marketing. According to Wikipedia, affiliate marketing is “an Internet-based marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate’s marketing efforts.” More simply, a merchant joins a program that allows other sites to drive traffic to his or her own site and the merchant pays those sites for the referrals.

How Do Referring Affiliates Get Paid?

How a referring affiliate gets paid has a lot to do with which country the affiliate is operating from, but the first step is generally the same everywhere. Affiliate networks are responsible for charging the selling merchant and paying the referring affiliate, moving the funds, and providing an accurate accounting. Therefore, the referring affiliates generally must establish some type of depository account in order to receive payments.

Paying Affiliates via Bank Accounts

The problem, however, with non-U.S. affiliates is that many individuals in certain countries (e.g., Brazil, China and India) simply do not have bank accounts. This complicates the process of transferring money to them because they do not have a depository account in which to receive it.

Moreover, for affiliates in many non-U.S. countries:

  • The funds transfer process often takes up to a week, or longer.
  • Transferring foreign funds by wire can be expensive, quickly eating into the referring affiliate’s profits.
  • Transferring foreign funds into local banks requires import/export documentation in many countries.
  • Transferring foreign funds into local banks may trigger certain tax considerations in many countries.
  • Constantly changing international banking regulations can create administrative problems for payers and payees.
  • Once repatriated, the funds may not realize the liquidity of other currencies or funding methods.

Paying Affiliates With PayPal

To overcome this complexity, many merchants now use PayPal to pay affiliates across national borders. What makes PayPal such an attractive option is the sheer size of its worldwide customer base. PayPal claims a 150 million member base worldwide. This makes it easy for companies to pay their affiliates, and gives PayPal a notable edge in the worldwide payments distribution business, for the following reasons.

  • If both parties have a PayPal account, then transferring compensation is as easy as logging on to PayPal and sending an email.
  • Because PayPal knows the physical “ship to” addresses of most of its members, it is able to employ very effective fraud controls.
  • This solution also provides the recipient with significant liquidity, as the affiliate can use the funds in her account to make purchases for herself or her company from merchants that accept PayPal.

PayPal offers three options for affiliates to receive payments. In countries with viable banking systems, the funds can be deposited into the affiliate’s bank account. Or, banked recipients can also opt to receive a paper check, but this typically takes longer.

For those who do not have bank accounts or do not wish to use a bank account, PayPal will send a fully-functional prepaid PayPal MasterCard debit card. It can be used at over one million retail location and ATMs worldwide where MasterCard is accepted. The card can take up to several weeks to obtain. However once received by the affiliate, future payments can be loaded onto the card quickly.

Paying Affiliates with Payoneer

Payoneer empowers affiliate networks to issue their own, branded prepaid debit cards to pay affiliates. Branded cards can take some time to obtain, however once received, future payments can be loaded onto the card quickly. Other Payoneer considerations are:

  • Payoneer’s online system provides an end-to-end online payment solution that affiliate networks can use to register affiliates, issue cards, pay recipients and report back to the networks.
  • Proprietary fraud controls augment the already competent controls established by MasterCard, which Payoneer uses.
  • Operating independently, Payoneer eliminates the need for banks and intermediate payment providers.
  • Affiliates can also be paid for referrals from other networks using the Payoneer solution, and the universe of Payoneer networks is expanding rapidly.


The appropriate affiliate payment system depends on where you live, where your affiliates live and whether you belong to an affiliate network. If the affiliates live outside the U.S., the merchants who pay them should consider the PayPal and Payoneer debit card options. Both options do not rely on the affiliate having a checking account and, once the process is set up, it’s easy to administer.

Michael E. Shatz
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