Update: 31 May 2020
I have been getting a lot of reports from users about Skrill not allowing them to withdraw money.
You are allowed to deposit money using MasterCard but when you have to withdraw, the transaction is declined and they do not respond to any complaints.
This confirms that Skrill is not a trustworthy platform and you should avoid them or run the risk of losing your money.
With the availability of Skrill in South Africa, we looked into if it is a good option for an online payment gateway. Today we are getting more and more into online transacting. Whether you are buying products and services online or doing commercial transactions like selling goods or even selling shares, you need to be well-versed in at least a few payment processing systems.
Thanks to the internet, the whole world is your potential customer so processing global payments is important. For this we have companies like Skrill which you can use to send and receive payments from people around the world
What is Skrill
Skrill is an online payment platform that is used to store and transfer money. It was originally known as Moneybookers, and was used for gambling sites and other similar platforms. They rebranded from Moneybookers to Skrill in 2011 and have been growing rapidly over the past few years. Since then, it has grown into a payment platform with more high profile partners that offer it as a withdrawing option.
They offer a mobile wallet and you can sign up for both individual services and commercial purposes (as a merchant). The platform is very popular with online trading platforms and many who trade in online investing, like forex trading for example, are familiar with Skrill.
Summary Review of Skrill
Skrill is an online payment gateway similar to PayPal and Payoneer. It offers the same basic services as similar payment gateways. It developed from being a payment processing system for high risk investments like gambling and trading, but has developed to include other products and services. The offering is marred by high transaction costs that make Skrill stack up less favourably against its competition.
How Skrill Works In South Africa
You can sign up for Skrill on the website, and set up an account as you would by providing your personal details and other particulars. Once your account is set up, you will have access to a wallet where you can store money that you get from merchants that support Skrill as a withdrawal option, or for direct payments.
In South Africa, Skrill works with 4 of the 5 big banks, with the exception being Capitec. You can save your bank account details and then send the money to your bank. With Absa, which I tested it on, you will receive a notification after payment is made. This will provide you with all the details you need to know how to have the money released into your account. Standard bank is the one bank where it is reported that the money is released without much processing.
Depending on your preferred withdrawal option, there are different processing times for Skrill withdrawals. For EFT, it takes up to 5 working days while for VISA withdrawals, it takes up to 7 days.
Might have problems with other banks. It works with no hitches on Standard Bank.
Where things go wrong with Skrill is in the fees that they charge for transactions. Skrill has excessively high fees for using them, which do not make sense if you compare against other players in the industry.
The transaction fees that you are charged for using the digital wallet are 1.9% + €0.29. There is also not a lot of clarity with the conversion process.
The chargeback fee is €25. The problem with this is that there is a long history of Skrill not working well with South African banks like FNB. Because the format of the transfer on Skrill did not match that of FNB, users have had chargebacks, where their money is returned when they are trying to draw. The terrible thing is that people got charged exorbitant fees while still not getting the funds withdrawn.
I drew $240 only to get R2230. At the current exchange rate, $240 is equal to around R3400 so that is a third of the value of money lost to charges. Another reported issue is if you get paid in pounds, it might mark those as euros at a 1:1 conversion so you lose on the conversion from pounds to euros.
There are no maintenance fees, you only have to pay for transactions. But this does not make up for the loss that you make on transaction fees compared to other payment processing platforms. When you transfer your money from your Skrill wallet to a bank account, you have to pay 4 euros.
If you are a merchant, there is a €0.49 fee for any returns that your customers make. The competition make if for free.
Compatibility with Payoneer – You can draw your money from Skrill to Payoneer. This is unlike PayPal where you cannot send money from competitors.
Having another option – In South Africa where banks are often restrictive in terms of compatibility with global technologies, it is good to have more options. You can compare the advantages and disadvantages of different platforms and use the one that best suits your needs at that instant.
Less restrictive on partnering – If you are a merchant, Skrill is much easier to partner with than with a company like PayPal for example. The also support partnerships in higher risk industries so many industries that don’t get support from PayPal can partner with Skrill.
Exorbitantly high fees – The fees are much higher than the competition. The services are the same as other payment platforms, there are no extra benefits to using Skrill. So if Payoneer or PayPal are supported for a platform you are trying to use, there is no reason to go with Skrill. If you are using it for online trading from South Africa, Neteller is an alternative offered by some of the popular online trading platforms.
Limited support with local banks – It does not work very well with most of the banks in South Africa. The only bank that supports it locally without complicated clearances at the current moment is Standard Bank.
Questionable reliability – History of failed withdrawals where users would draw money and it would not reach their account and instead be sent back to Skrill. In this case, you would still be charged the fees which means that you lose a substantial amount without even getting your money. Some reports of deposited money not reflecting in one’s account.
Why You Should Use Skrill
Skrill is frequently used by people who use online trading platforms, online casinos, and similar services. If you have a skrill account, you will be covered for many of those platforms since it has a good number of partners in that space. This will save you from having to have many different payment gateways when you use different platforms. In short, Skrill is good for that particular sector of the online economy.
Alternatives to Skrill
When you choose options it depends on what the person is paying you allows as a way to draw your money. If they offer other payment gateways like Payoneer, I would recommend choosing to use those instead. This is because it is much easier to get your money into your South African bank account from Payoneer. Also, if you are in a different country where no bank supports any of the payment gateways, Payoneer stands out because they give you a MasterCard debit card. That is something that you can use anywhere in the world because every country has a MasterCard ATM or swiping points.
Skrill is not a good option at all for an online payment processing solution. It offers nothing special compared to the competition but the fees that are associated with transacting are insanely high. The only way it would make sense is if you are receiving money from high risk investments, banking, or if there is no other option to get your money. I don’t know of any county where Payoneer is not supported yet and that is a better service than Skrill. The only exception is if the merchant you are getting the money from does not offer any viable alternative other than Skrill. For that reason, I recommend you rather create a Payoneer account instead and use that to receive your money.
Stop Gambling Your Money Away With Forex
If you really want to make money online, you need to stop gambling on forex and learn to create a real business.
Check out Wealthy Affiliate.
It is completely FREE to try out and teaches you how to make money with any passion, whether sport, financial markets or whatever your passion is.
Best of all, you will be making making money in dollars.
Try it out and thank me later.