I.
Payoneer Launches Capital
Advance Services for U.S. Sellers
i.
Payoneer a B2B online
payment platform for e-commerce launches its Capital Advance service for
domestic sellers.
Global payment platform provider Payoneer said it is rolling
out its “Capital Advance” service for domestic e-commerce sellers, which will
allow e-commerce merchants instant access to working capital with the “click of
a button” — easing the burden of the resource-constrained seller and allowing
them to grow their business operations.
The service expands on a previous iteration developed in
2017 and will introduce flexibility in repayment terms, with new offers
allowing repayment up to 90 days later for Amazon, Walmart and Tophatter
sellers.
Some $178 billion of revenue went through Amazon.com last
year alone, based off of a report surveying 1,200 Amazon sellers by Feedvisor.
Also in the report, 36 percent of seller respondents planned to sell through
Walmart in 2018, up from 29 percent in 2017. Wherever the seller sets up shop,
with other choices being eBay, Shopify and Jet.com, the consensus is the same
on challenges faced.
Already subject to marketplace fees, high storage fees and
other complications, the access to working capital sits at the forefront of
sellers’ biggest concerns. As addressed by Scott Galit, chief executive officer
of Payoneer, access to working capital is “perhaps the most difficult challenge
facing e-commerce sellers looking to grow their business.”
E-commerce sellers seeking to expand their business without
traditional limits by bank loans may be benefitted by “low-cost” and “low-risk”
access to capital. Requiring no collateral, every payment cycle, sellers can
receive offer amounts which are judged from a merchant’s prior sales records.
Often denied or faced with high rates, the “simple and
straightforward” capital advance service is “there when you need it,”
reiterated Iain McNicoll, country manager for the U.S. at Payoneer, in an
interview with WWD.
The access to working capital is a top constraint for
marketplace sellers looking to grow, and with capital advances the hope is to
have the money when it’s needed.
II.
New York Based Payments
Platform Payoneer Re-Enters Indian Market
Payoneer, the New York-based cross-border payments platform,
has re-entered the Indian market with its local bank transfer services. The
company is initially targeting Mumbai and Bangalore, and will be opening its Indian
office in one of these locations.
The entry further aims at expanding its product offerings to
Payoneer users in India to send payment requests to their customers, and
receive funds into their Payoneer account via multiple methods of payment
(credit card, wire, e-cheque, etc.).
i.
Payoneer’s Journey In India
So Far
Till 2011, Payoneer was offering its Debit Master Card
services to Indian users. This allowed them to not only secure payments from
international clients but also to withdraw money from any ATM in the country.
However, due to certain RBI directives, Payoneer had to close these services.
Currently, it is providing local bank transfer services in
India which allows a Payoneer user to receive funds in multiple currencies
(USD, GBP, EUR and JPY) in their Payoneer account. The funds are then sent in
INR to user’s local bank account within 24 hours.
For instance, if you are a small business operating in
India, being a Payoneer user you will get a bank account with UK, Europe and
Japan, wherein you can pay globally with your local bank account in each of
those markets. This provides even the small businesses a global banking
relationship at a much lower cost than international wires.
Recently, Payoneer has set up a liaison office and has had
roadshows in four cities in India, which saw 10,000 small businesses sign up.
However, the company has to customise its products as per local rules by RBI.
“Given the regulatory limits, we are not likely to see large
companies that will be invoicing a $50,000 purchase. For starters, we would
probably be looking at companies with a maximum per transaction limit of
$10,000,” said Scott Galit, CEO at Payoneer . The company has also partnered
with IndusInd Bank to launch the service after receiving central bank approval.
ii.
Existing Market Opportunity
In 2015 alone, B2B transactions worth $20 Bn were done in
India. The total online cross-border spending in India is estimated to reach
$15 Bn in 2016, a 78.5% increase from $8 Bn last year. The potential drivers
for this growth counts are increased connectivity, rapid development of B2C and
B2B ecommerce marketplaces, and availability of global infrastructure &
cloud based software tools.
Citing the reason for why it is the right time to enter the
Indian market, Scott told Inc42, “We see India as not only a large country in
terms of population, but we see it as a country build with smart, technically
sophisticated, hard working people.” He further added, “In many respects we see
India going along the lines of China.”
He also mentioned about how China started as the
manufacturer of rest of the world products. However, since the last decade,
Chinese companies have started coming up with new ideas and are actually
becoming meaningful drivers for global businesses. He believes that a similar opportunity
is seen to be coming from India.
“With Indian government pushing Made In India campaign,
driving more entrepreneurship, more creation, more ownership of new ideas and
new businesses, we just think that the world is moving in the direction of India
and we are moving in the direction where the world is moving. We really think
that India offers a strong position and have an important role in global
economy,” said Galit.
iii.
Talking about 3 T’s:
Targets, Talent, Trends
As per Scott, Payoneer team is currently targeting small businesses in India such as
export businesses, manufacturers and service providers. They see a tremendous
opportunity for those who are technically sophisticated and those who are able
to use digital channels at some point to connect with the rest of the world.
“We see a lot of activity coming out of India, and a rapidly
growing global market, where talented
Indian professionals and businesses are selling their services globally. We
want to make an easier as well as a faster, digital and more reliable process
for them. We think any small Indian business that is thinking about going
global is a great target and we think there is more opportunity for any Indian
business to go global at that point,” added Scott.
The company is
working to finalise its finances, and have got an extended product
offering which they will be bringing to the market soon. Also, they are
engaging with local business partners and is finalising its local market strategies and efforts.
Scott further added, “It’s a very very meaningful long term
opportunity and we are very excited about the path we are on. In long term,
India would make it an important destination for us. That means with right kind
of people and right type of product, we will really be able to show Indian
entrepreneurs the opportunities they have to grow their business globally. We
want to help them grow and be their partner in their global growth. So, in next
year, we really hope to make that foundation built.”
In terms of talent acquisition, Payoneer has plans to
recruit more than 250 people for its global business, out of which a large
portion will be focused on India. Recently, they have hired a country manager
in Bangalore and more hiring is in the pipeline.
As far as trends in digital payment segment are concerned,
Scott is of the view that there is a one way train moving towards more digital
infrastructure. In coming years, there will be tools available which are
faster, more secure, and more legally acceptable to all—whether it is for a
person in small village who hasn’t had any way to connect yet, or financial
services or small businesses who really don’t have good tools available—the
kind of tools that are available to support grow and manage a global enterprise
that is radically different. “Our goal is to make those tools available to even
the small businesses and we see that is exactly the kind of trend that is
happening overall, and making its way to help boost economic development,” he
added.
iv.
Competition: Payoneer Vs
PayPal Vs Local Banks
With world going local, businesses are getting opportunities
to extend their footprints all over the world. With virtual payment platforms
like Paypal and Payoneer , not only the payment processes are getting simplified
but are also making even small businesses play a bigger role in development of
global economy.
A recent analysis conducted by Let’s Talk Payments (LTP), an
international FinTech content and research firm, compared the differing methods
and costs of transferring B2B payments from the US to India.
The report findings included that direct bank transfers are
done usually within a day but levy high currency conversion fees of 2.6% and
wire transfer fees of 35%. It further analysed that Paypal, took 3-5 business
days to transfer the funds, and charges 2.5% currency conversion fees. Also, a
receiver fees of 4.4% (+ 0.3 cents) is charged. For instance, in India it would
be charged to Paypal India by Paypal US. Both of these methods reduce the final
amount transferred considerably, putting the end receiver at loss. Payoneer , on
the other hand, charges only a 2% currency conversion fees and completes
payments within 2-4 working days.
Payoneer thus get an edge over others with its free
collection service, low conversion rates and real time money transfer
facilities.
Paypal, on the other hand, has already deepened its roots in
India over the last few years. It has recently announced seller protection
programme for intangible items like event tickets or travel services, to combat
instances of online fraud. It has also appointed Anupam Ahuja, as the Managing
Director and Country Manager for India. He was earlier working as India MD for
SumTotal Systems, a leading global e-learning company. Thus, getting ready to give all it’s competitors
a major blow.
Apart from these, the other alternatives available for
cross-border payments in India include Skrill, 2Checkout, and Selz.
If talked about the overall digital payment landscape of
India, in last 10 years, there has been seen a considerable shift from cash to
card to just a tap on the smartphone.
The growth in ecommerce market has also led to the growth of
payment gateway market in the country. This market is now expected to reach $40
Bn by the end of this year. It is currently driven by banks such as ICICI,
HDFC, SBI, etc. and third party vendors such as CCAvenue, BillDesk and ECS.
The approval of payments bank licences to major companies
such as Paytm, Airtel, etc., is projected to drive growth in digital payments
inclusion in people’s day to day life, eventually aiming towards a cashless
society.
Launched in 2005 by Yuval Tal and Ben Yaniv Chechik, Payoneer currently has 3 Mn users across 200+ countries and provides
transactions in 150+ currencies. It has a global team of 700 people. On one
side, it works with large global companies, such as Google, AirBnB, etc., and
on the other side it gets 2000 applications a month from small businesses. Till
date, it has raised $54 Mn from 14
investors including Greylock Partners, Crossbar Capital, Carmel Ventures,
83North, Wellington Management, and more.
III.
Payoneer: Taking Prepaid
Debit Cards to the Next Level
The growth of e-commerce and the continuing expansion of
outsourcing and the remote workforce are fueling a new approach to paying for
services. Internet-focused companies are replacing traditional online payment
transactions with prepaid debit cards.
Payoneer : Taking Prepaid Debit Cards to the Next Level
Payoneer is a startup firm that is pushing this concept of
prepaid debit cards to leverage more Web payout services through the use of
reloadable debit cards. Its CEO sees a strong demand for a new approach to
handling business transactions over the Internet.
Some industry watchers predict that online payment options
such as debit cards will take off this year. For example, analyst firm Celent
predicts alternative payment methods such as debit cards will more than double
by the end of 2008. These new transactions, known as Web payouts, now comprise
26 percent of all transaction volumes, while credit card volumes decline.
"A real need exists for a low-cost, worldwide payment
solution with responsive customer support tailored for online businesses,"
Yuval Tal, CEO of Payoneer , told the E-Commerce Times. "The payment
process from Internet companies to individual payees is unique and requires
many adjustments compared to the typical check-cutting process."
Tal started Payoneer to provide a new type of payment
channel for e-commerce companies and workers. His goal is to solve problems in
other payment methods, such as checks and wire transfers for international
payroll.
i.
The Need
More traditional payment methods for online transactions and
remote per-project workers are costly and cumbersome.
"Paper checks get lost or stolen overseas often, and
banks overseas can hold funds for up to 30 days and charge high foreign
currency exchange rates," Tal said, adding that wire transfers are costly
and lock recipients into costly bank fees.
Traditional money transactions through PayPal often are
cumbersome for obtaining cash abroad, or they require a minimum three-day hold,
he explained.
ii.
The Problem
Take the case of 2Checkout.com, a reseller for thousands of
online businesses. That company was drawn to Payoneer debit card solution to
better navigate international banking barriers.
"We are a worldwide company, so some banking services
are not easy to work with. We found a huge difference [with Payoneer ] to using
PayPal," Geno Arce, business development specialist for 2Checkout.com,
told the E-Commerce Times.
oDesk, which runs an on-demand global workforce, faced
similar payroll issues with its international clients. The company enables
buyers of services to hire, manage and pay technology service providers from
around the world. oDesk serves as the management arm for hiring remote workers
registered in its database on a per-project basis and handles all billing and
payment services for firms using its manpower.
"Making payments to our customers in 60 countries, we
struggled to pay the workers in their own locales. It was expensive to wire
money and use different banks worldwide," Gary Swort, CEO of oDesk, told
the E-Commerce Times.
iii.
The Solution
Payoneer provides prepaid Visa and MasterCard accounts to
its affiliates that choose them. Also, Payoneer handles payment processing/clearance
services. The company lets card holders view account balances and transaction
histories.
Some customers see the approach to Web payout options that Payoneer provides as better than cash. In 2CheckOut.com's case, Payoneer 's
prepaid debit card, which carries the 2CO logo, lets that company pay its
vendors by depositing the money due directly to the account of the person
issued the card.
"The challenge we had was how could we do this
internationally. We haven't found any company to do this at this price,"
Swort said about oDesk's experience with Payoneer . "It's very
cost-effective. We don't want a lot of fees."
iv.
The Product
Payoneer 's approach to solving the Web payout dilemma
involves an option to pay revenue shares to their partners by giving them a
reloadable prepaid debit card from a major credit card bank instead of sending
a paper check or wire transfer handled through existing online payment services
from PayPal, Google and others. The new payment methods also make doing
recurring business online and paying remote workers more convenient, Tal
explained.
Companies can upload payments securely and swiftly. The
prepaid cards make funds available to affiliates anywhere in the world that the
Debit Visa or MasterCard is accepted. The money is available to the payee in
U.S. dollars or is converted to the local money standard using the credit card
company's exchange rate. Transactions under US$10,000 are almost always far
more favorable than the foreign exchange rates of a bank, according to Payoneer .
Once cards are mailed to affiliates, funds can be accessible
within two hours after a quick online verification. Payoneer also has an
arrangement with MasterCard so with MC approval, a company can place its logo
on the physical plastic Debit MasterCard cards that the affiliate sends to its
employees and partners.
v.
The New Challenge
Using debit cards to pay instead of writing checks is
nothing new. Neither is the idea of using prepaid cards for transactions in
stores and online.
However, the idea of using reloadable branded debit cards as
a payment option is. So is the notion of handling recurring employee incentives
and payment to international workers by debit card.
Several large credit card vendors are offering similar
services. So are a number of Internet banking firms.
"There is definitely competition developing in this
space domestically," Tal said. "Developing a market for prepaid debit
cards was definitely a strategic move by Visa and MasterCard. It was one of
their top five things to do."
vi.
High Hurdles
Early on, Tal had to solve regulatory and compliance issues
that government banking agencies put in place to prevent abuses in handling
online money transactions.
"The prepaid space is very new with e-commerce,"
he said.
Within the e-commerce industry the goal is to replace the
use of paper checks, according to Tim Sloane, director of Mercator Advisory
Group's Debit and Prepaid Advisory Service.
"There is multiple opportunity in this space. Online
payments in 2006 was $11.6 billion, so it is a well-established segment. It is
still growing at 60 percent a year, but I expect it to grow faster now,"
Sloane told the E-Commerce Times.
vii.
New Goals
Now that Payoneer 's concept of reloadable prepaid payment
cards is established, Tal's next goal is to expand this service
internationally. He plans to begin this phase in the second quarter of this
year.
"The real challenge we face now is moving into the
international payment space," he said. "Educating foreigners is a big
task."
U.S. workers and businesses have already carried the use of
multiple credit cards and debit cards to the extreme, but for workers in other
countries, it is common for many to not have a single card, Tal explained.
"For many, this is the first deal. It is a big deal to
get a card," he said.
IV.
Payments without borders
Helping businesses trade with other businesses across
borders is the mission of Payoneer , a global provider of payment-processing
technologies. The New York City-based company was started in 2005 by Yuval Tal,
an Israeli entrepreneur who helped start other technology and e-commerce
payments companies before Payoneer .
The company helps facilitate global commerce by connecting
businesses, professionals, countries and currencies. It does business in over
200 countries and counts Airbnb, Amazon, Google and Upwork among its customers.
CEO Scott Galit has said that Visa and MasterCard have local collection capabilities
around the world that can help consumers with cross border payments, but that
businesses were not offered that same solution. Now, the global payment
processing market for businesses is white-hot with Payoneer competing with
other growing companies such as Adyen, Bluesnap, and PayU.
In October, the company raised $180 million from Technology
Crossover Ventures to bolster its product development and technical staff,
bringing its total raised to $234 million. It has also opened offices in India,
Japan, and the Philippines, over the past year, fueling speculation that the
company will soon be ready to file for an IPO.
V.
Marketplace Payments
Specialist Payoneer Signs Rakuten.com
New York-based money transfer service Payoneer has signed
with e-commerce player Rakuten.com, formerly known as Buy.com.
Payoneer doesn’t enable purchases on the platform, but
rather enables Rakuten to compensate its suppliers, who may be located anywhere
in the globe, particularity East Asia. “We’re a bridge between marketplaces and
sellers,” said CFO Michael Levine.
“We don’t participate in consumer remittance,” Levine told
Bank Innovation. “We’re in a quiet corner of the space that is much, much
bigger.” That quiet corner is of course business-to-business payments, where Payoneer serves companies such as Airbnb, Shutterstock and Fiverr. These
marketplaces have complex webs of users supplying products or services, and
paying each of them one at a time, in different currencies and different
geographies, would consume enormous resources.
Payoneer covers this much ground with a patchwork of
solutions. In its most important markets it has bank partners, but sometimes it
employs an “ecosystem approach” to reach its clients. Banks have little to fear
from Payoneer , Levine said, because Payoneer works with banks and brings them business.
“Banks want to become our partners. We’re middleware, we’re not trying to
displace the banks,” Levine said. “Not much has changed in international
payments — you still have wires running over a correspondent banking system,”
Levine said. “Banks love to work with us. We’re paying fees to use that
infrastructure.”
What Payoneer does offer is a decade’s worth of compliance
and onboarding expertise. Payoneer brings in small business customers far more
cheaply and efficiently than a bank could do. “Our business is very different,”
Levine said. “We’re online, very efficient, so we can be cheaper and more
transparent.”
Payoneer can also move funds faster than banks because it
relies on automation. Ultimately, the time funds can take to arrive depends on
the market and financial infrastructure there. It can be same day or it can be
a few days, but it’s “usually quicker than the wires,” Levine said.
Payoneer was founded in 2005 and has approximately $90
million in financing, according to Crunchbase. Year-to-date volumes have grown
57% and revenue has grown 75%, Levine said.
VI.
Payoneer Adds Financing
Tool For Amazon, Walmart eSellers
Payment platform Payoneer is launching its Capital Advance
service, the company announced on Monday (Feb. 25).
Designed as a solution to support cash flow management for
online commerce companies, Capital Advance provides access to working capital
financing for businesses selling online. Payoneer is offering 90-day payment
terms, which can be extended even further for businesses using Amazon, Walmart
and Tophatter to sell their goods online.
Payoneer struck a partnership with Amazon in 2015 that
allows sellers on the Amazon platform to offer Payoneer as a payment solution
when doing business across borders.
Capital Advance is an extension of Payoneer ’s Early Payments
solution, which rolled out in 2017 as the company’s first step into seller
financing. According to the company, current financing offerings are not always
adequate to analyze risk and underwrite loans for eCommerce business models.
The Capital Advance tool does not require collateral, with financing amounts
based on previous sales performance.
“We understand that access to working capital is perhaps the
most difficult challenge facing eCommerce sellers looking to grow their
business,” said Payoneer CEO Scott Galit in a statement. “Payoneer ’s Capital
Advance service provides merchants with instant access to the capital they need
to reinvest into their business.”
The company pointed to areas of opportunity that online
sellers can access as a result of the financing solution, including expansion
into new geographic markets or product categories, and investment in marketing
or additional inventory to prepare for seasonal fluctuations.
Payoneer said its existing marketplace clients are also able
to extend financing to their own clients without taking on the risk.
In December, Payoneer announced a partnership with employee
time-tracking company TopTracker, which is now working with Payoneer to enable
employers to more seamlessly compensate their freelance workers, including
across borders.
VII.
France: Cdiscount
integrates with Payoneer
French online retailer Cdiscount is now integrated within
the online payments company Payoneer `s platform.
Founded in 1998, the company markets a range of beverages,
jewelry, computers, software, furniture, mobiles, sports products, household
appliances, televisions, video games, gardening equipment, telephony and
automobile accessories. Its marketplace arm, “C le Marché”, is the hub for 3rd
party sellers to offer their products to Cdiscount’s customer base. In 2015,
Cdiscount registered EUR 2,741 million in gross merchandise volume.
Payoneer empowers global commerce by connecting businesses,
professionals, countries and currencies with its cross-border payments
platform. Payoneer enables millions of businesses and professionals from more
than 200 countries to reach new audiences by facilitating cross-border
payments. In March 2016, the company acquired Armor Payments, an
escrow-as-a-service payment company.
VIII.
In The Philippines,
Payoneer Helps Lift Rural Poor
Digital payment fintech Payoneer is helping working-age
people in the Philippine countryside—many of them without a college degree,
access to financial services, or transportation—secure gainful employment with
companies outside the country.
Since opening its hub in Manila four years ago, Payoneer has
helped millions of local freelancers and small businesses tap into the global
economy, enabling them to send and receive hundreds of millions of dollars in
payments between different countries. Such transfers, the company says, offer
better rates on foreign exchange and lower commission fees than most
conventional banks.
Payoneer’s goal now is to extend its partnerships with
freelance marketplaces such as Upwork and Fiverr, as well as government
programs such as the Rural Impact Sourcing Technical Training Program, “so that
we can bring these opportunities to rural areas in the Philippines,” says
Miguel Warren, the company’s Philippines country manager and regional head.
That model seems to be working, helping customers like
Marvin Espina, who says he went from making $3 an hour as a freelance call center
agent to grossing $300,000 a month as a small business entrepreneur. From his
hometown in the small Philippine fishing village of Sogod (population: 44,000),
Espina now runs two ecommerce stores on custom merchandising platform Shopify,
where he sells apparel, watches, and sunglasses to consumers in the US, the UK,
Canada, and Australia.
Espina uses Payoneer’s global platform to transfer consumer
payments, and then he uses Payoneer’s prepaid MasterCard to pay his suppliers,
renew his Shopify subscription, and buy Facebook ads. “Payoneer has helped me
really scale my business,” he says.
Like Espina, millions of entrepreneurs are entering the
digital “gig economy” each year, pushing the transaction value of global
digital payments to more than $4.1 trillion in 2019, estimates Statista, which
forecasts the market to grow to $6.7 trillion by 2023.
Competing with Customer Service
While the digital payments sector includes many players,
Espina singles out Payoneer’s customer support. “When I have concerns, I can
easily reach the Payoneer team,” he says. “On other platforms, I’ve had to wait
on hold for up to an hour.”
Marge Aviso, CEO of business process outsourcing firm
Telework Philippines, echos Espina’s sentiments. As a full-service
telemarketing and tech support call center serving mostly US-based startups and
midsize businesses, “we need to be able to receive cross-border payments
instantly, without having to fill out long verification forms or pay exorbitant
fees,” Aviso says. Payoneer’s dedicated account manager usually responds within
a couple of hours. “This kind of fast and reliable customer support is the #1
reason we chose to grow with Payoneer,” she says.
Payoneer’s customer care team, led by vice president Natalie
Margolin, employs 320 people who support 4 million customers in 70 languages
and 150 different currencies from service hubs not only in the Philippines, but
also in the US, China, and Israel.
Using Oracle Service Cloud's knowledgebase, Payoneer’s call
center agents match thousands of different service scenarios with customers’
account data, and then offer step-by-step instructions to help them set up
automatic payments from a virtual retail marketplace or provide them with links
to self-service how-to videos and FAQs.
With the application’s intelligent routing capabilities,
“customers can just log in to their account, submit questions via email, and
Oracle Service Cloud automatically replies with help tips or offers tailored to
the customer’s exact service need, subscription level, region, and local
language,” Margolin says.
If for any reason the customer’s question still isn’t
answered via email, custom business rules within Oracle Service Cloud route the
question to an agent who not only has the needed expertise, but can also
communicate in that customer’s preferred language.
Before upgrading to the Oracle service in 2014, Margolin had
just 30 people in her department, all in one office, yet they used four
different service applications: one for knowledge management, another for chat,
another for internal instant messaging, and another to manage its customer
contacts. But after Payoneer entered several new markets, on-boarded hundreds
more reps, and acquired millions more users, “we needed one platform that could
handle everything,” she says.
Because of the Oracle cloud application’s search,
multi-language help, customizable business rules, and intelligent routing
capabilities, Margolin says, “we’re able to provide a more personal, localized
experience to our customers and scale our business.”
Southeast Asia, which is among the top gig economies in the
world, is a key market for Payoneer and among the fastest-growing geographies
for the company. Since 2015, the New York-based fintech, founded in 2005, saw
its volume grow more than 1,000% in the Philippines, 907% in Vietnam, 789% in
Thailand, 736% in Indonesia, and 407% in Malaysia.
IX.
Payoneer announces increased
investment in US business community
Digital payment platform Payoneer has launched new service
for US businesses of any size to send international payments.
The new service allows SMBs to send payments to vendors,
suppliers, and contractors anywhere in the world rapidly at low cost.
Businesses in the US can send payments to any of their
suppliers, establish recurring payments to pay regular retainers, send batch
payments when needed to pay several recipients at once, and track the
transactions.
Payoneer has unveiled several partnerships to simplify
financial management for US businesses.
The company has partnered with commercial card startup Brex
to facilitate international business payments to contractors.
Payoneer VP, regional head of Americas Iain McNicoll said:
“These new capabilities and partnerships fuel our mission to empower businesses
to grow.
“More than ever, we’re focused on the US business community,
and are making investments in helping them address the challenges of a digital,
global world. By giving them access to the tools they need to expand and
streamline operations, we continue to be the partner for growth for US
businesses.”
The new services and partnership allow Payoneer to extend
the range of tools available to US businesses seeking to compete on a global
scale.
Payoneer said its digital platform streamlines global
commerce for millions of small businesses, marketplaces and enterprises from
200 countries and territories.
X.
Payoneer Offers Payment
Services To U.S. SMEs; Unveils Brex Partnership
Digital payments platform Payoneer has today announced
further investment into the U.S. business community, providing payments
capabilities to businesses of all sizes and allowing SMEs and enterprise
organizations alike to expand globally with the new international payments
service.
This news comes after the Transferwise competitor raised
$270 million in fundraising and will build on the success of its existing
offering that enables payments for giants such as Amazon, Airbnb, Google and
Facebook, but now SMEs will get a piece of the Payoneer action.
SMEs will be able to send payments to vendors, suppliers and
contractors across the world cost efficiently and at a rapid pace, via credit
card, local bank transfer and echeck. Xiaohui “X” Wang, the Founder of
eCommerce email marketing company Essence of Email, said that Payoneer's
service has been a game changer for his company.
“As a US-based remote company, it can be very challenging to
pay our contractors and employees in Europe. Transferring payments to banks
around the world was slow, complex, and costly. Other digital payment providers
used by our staff had little transparency in terms of transactions and fees,
and required me to maintain several systems.
"Now that we are working with Payoneer, the entire
process is replaced with one click. We’ve reduced our work load and fees with
an automated procedure that takes just a few minutes per month for our
employees. Most importantly, our employees are very happy with the new payment
service.”
Payoneer, now the preferred payment method for four million
freelancers and SMEs, has also revealed a partnership with corporate card
pioneer Brex, another addition to their rapidly growing ecosystem of
collaborators.
“These new capabilities and partnerships fuel our mission to
empower businesses to grow,” states Iain McNicoll, VP, Regional Head of
Americas, Payoneer. “More than ever, we’re focused on the U.S. business
community, and are making investments in helping them address the challenges of
a digital, global world. By giving them access to the tools they need to expand
and streamline operations, we continue to be the partner for growth for U.S.
businesses.”
Brex’s plans to replace and improve traditional startup bank
accounts with their new product Brex Cash have dominated fintech headlines this
week. According to TechCrunch, the company has built core banking from scratch
to avoid processing fees and their partnership with Radius Bank will allow
customers to send payments quickly and easily.
Brex also plans to reward users with cashback, travel and
air miles in addition to 1.6 percent yield on deposits. Co-Founder and Co-CEO
Henrique Dubugras told TechCrunch: “Our idea is that new businesses —the new Y Combinator companies —we hope a big percent of them never open a bank account.”
XI.
This is why a single global
currency (like bitcoin) won’t happen, says online payments company CEO
One world, one currency?
Certainly, one global currency would eliminate problems like
intentional manipulation of currency values and it could make pricing
transparent and eliminate foreign transaction fees. In fact, the benefits of a
global currency is one of arguments for bitcoin by its proponents.
But as logical and desirable as the idea sounds, it’s
unrealistic.
In particular, there would be no tangible benefit to the
U.S. government to transition to a single global currency.
That’s according to Scott Galit, the CEO of New York
City-headquartered Payoneer, a global payment processor start-up named one of
CNBC’s most disruptive companies of 2018.
“Despite the interests of lots of people out there in the
Internet world who love the idea of frictionless commerce and frictionless
money and avoiding fiat currencies, I don’t see it,” Galit tells CNBC Make It
of the idea of a future single global currency.
First, Galit says it’s unlikely the U.S. government will
ever allow people to pay their taxes with something like bitcoin, because that
would mean the government’s money would be subject to the exchange rate
fluctuations of that digital currency. For example, by December, bitcoin had
lost about two thirds of its value since the beginning of 2018, according to
CoinMarketCap. If that happened to government money, it would not be able to
meet its financial obligations, according to Payoneer.
“Now you could have a debate whether taxes are fair or
unfair or whatever but they are a reality. There are going to be taxes because
governments need revenues,” Galit says. “Countries actually need tax revenue in
order to fund services for their residents.”
But at least when it comes to state government, some
attitudes may be shifting. Ohio has become the first state in the country to
allow certain tax bills to be paid with bitcoin, but payments still need to go
through the website OhioCrypto.com, which converts bitcoin into cold hard cash,
which the government then receives, highlighting Galit’s point. Arizona,
Georgia and Illinois have bills in the works that would allow bitcoin to be
used to pay tax bills in a similar way, according to the Wall Street Journal.
In addition to taxes, Galit says the U.S.’s Federal Reserve
System is a hurdle.
The Fed exists to ”[promote] the stability of the financial
system,” and “to minimize and contain systemic risks through active monitoring
and engagement in the U.S. and abroad,” among other tasks, according to its
website. Its most powerful lever on the U.S. economy is its federal fund
interest rate, or the rate at which it lends money to banks. If the Fed raises
the interest rate, borrowing money becomes more expensive in the U.S. economy,
thereby putting a damper on growth. If, on the other hand, the Fed lowers
interest rates, borrowing money becomes cheaper, thereby accelerating the
economy.
If a nation’s central bank does not have the ability to
control the currency for the people in its own nation state, then it is largely
rendered impotent. And most countries have their own central banks too.
“Central bankers are there to actually help manage the
economies and provide kind of stewardship for those economies,” Galit says.
“Part of that is actually managing currency in the interest rates [for lending]
and in exchange rates. If you don’t actually have any control over a currency
you’ve lost one of the major policy tools that you have, so what do you do?”
While the Payoneer system is free, the company helps clients
receive payments from more than 200 countries around the world and it makes
money charging fees to make withdrawals in different currencies (as well as
offering other financial services), so it has a stake in the currency game. But
Galit is not alone in his skepticism. Other experts agree a single currency is
impractical and unlikely to happen any time soon.
However, there are dissenters. Twitter CEO Jack Dorsey said
in March that he expects bitcoin to become a single universal currency within a
decade, “but it could go faster,” he told the Sunday Times newspaper.
And Apple co-founder Steve Wozniak at least hopes that’s the
case. “I buy into what Jack Dorsey says, not that I necessarily believe it’s
going to happen, but because I want it to be that way, that is so pure
thinking,” Wozniak told CNBC on in June.
For Galit’s part, he’s firm: “Practically, there are going
to be limitations and constraints that are in the very, very, very hard for
folks to overcome,” he says.
XII.
Payoneer Is Said to Hire FT
Partners to Explore Deal Options
Payoneer Inc., which developed a platform to facilitate
cross-border payments, hired FT Partners to explore options for expansion,
including a private funding round, according to a person familiar with the
matter.
The New-York based financial technology startup is
considering acquiring smaller companies or raising funds the person said, who
spoke on condition of anonymity as the discussions were private.
Founded in 2005, Payoneer has raised more than $265 million
from investors such as Technology Crossover Ventures, Susquehanna Growth Equity
and Viola Ventures. The company employs 1,200 people across the U.S., the U.K.
and Asia. The firm plans to open offices in Latin America this year.
Payoneer’s technology moves money for businesses in one
country working with those in other countries and handles the regulatory and
currency issues that come with international transactions. While many payments
startups rely on the existing credit card infrastructure, Payoneer has built
its own connectors directly into banks, allowing recipients to get money
deposited in their accounts and avoiding the transaction fees that come with
plastic.
The company services over 4 million customers, including
many of the biggest internet marketplaces such as Amazon.com Inc., Airbnb Inc.
and Google, according to its website. Payoneer raised $180 million from
investors in 2016, and is reportedly valued at over $1 billion.
Rivals to the traditional players in cross-boarder transfers
have been attracting high valuations. Transferwise Ltd., which provides
low-cost international money transfers, is one of Europe’s most successful
fintech companies, valued at $3.5 billion following a secondary share sale in
May.
XIII.
Payoneer Will Do Anything
to Partner With Libra, Says Founder
i.
Yuval Tal spoke Monday at a
fintech conference held in Tel Aviv by Calcalist, Bank Leumi’s tech banking arm
LeumiTech, and accounting firm KPMG
“I really want Libra to work,” said Yuval Tal, founder and
president of Israel-based online payment company Payoneer Inc. Speaking Monday
at a fintech conference held in Tel Aviv by Calcalist, Bank Leumi’s tech
banking arm LeumiTech, and accounting firm KPMG, Tal said that while it might
not be Libra but another digital coin that eventually makes it, Libra is a
“beautiful initiative.”
Facebook has its WhatsApp, and its Instagram, and they
realized that if it is possible to transfer a video, they can transfer money as
well, Tal said. “The system is broken,” he said, adding that there is no reason
why an entity like Facebook shouldn’t be the one to fix it.
Choosing the terms blockchain and crypto is smart, Tal said,
as bitcoin is an anarchist venture against banks, while Libra is a venture set
up with the intention to work together with the banking system. A possible
obstacle is how countries will view it, Tal added. “If it is seen as a threat,
or regulatory demands will be used to make it cumbersome, it can hinder
success.”
The decision to fix Libra’s valuation according to leading
currencies and not the dollar could pose a threat to less stable countries,
where a sudden and widespread shift to Libra could hurt a country’s monetary
flexibility, Tal said. But it will not happen to countries like Israel, he
added.
Payoneer will do anything to partner with Libra, especially
when it comes to converting Libra to local currency, Tal said, pointing out
that Facebook is already a company client.
While the local payment industry has seen some innovation in
recent years, Tal believes Libra could serve as a growth engine for Israel.
“Libra’s open source software will enable a lot of local entrepreneurs to take
part, and a lot of companies will create value for shareholders around Libra,”
he said. The Israeli fintech industry has a very healthy relationship with the
regulator and the fact that one of Libra’s key people, Tomer Barel, is based in
Israel means Israel could export innovations worldwide, Tal said.
While he does not discount the risks of giving Facebook even
more power, Tal said that Libra is meant to answer a real need, offering a way
to transfer payments to anyone in the world, in real time, without paying a cut
to multiple middlemen. “At the end of the day, I am not concerned over
countries,” he said, “you can always limit a company using court orders.”
Speaking about Payoneer’s future, Tal said the company is
now focusing on providing users with added value. As part of the payment
revaluation, the fees paid to transfer funds are decreasing, as a global trend,
he said. But as the industry becomes more complicated, there are fewer and
fewer banks that can manage such services on a global scale, and that’s where
companies like Payoneer come providing their services to banks, Tal said.
XIV.
Online Payment Company
Payoneer Looking to Raise Money in 2019
i.
The company has recently
held several meeting with bankers and has already chosen an investment bank
with whom to discuss the different options
Israel-headquartered online payment company Payoneer Inc. is
considering several ways of raising capital in 2019, among them a U.S. initial
public offering or a private issuance, according to one person familiar with
the matter who spoke to Calcalist on condition of anonymity. The company has
recently held several meeting with bankers and has already chosen an investment
bank with whom to discuss the different options, that person said. The company
is aiming for a valuation of over $1 billion, that person said.
Following Calcalist’s report, Keren Levy, the chief
operating officer of Payoneer Inc., has confirmed in a Monday email to
employees that the online payment company has contracted an investment bank to
look at various financing options for 2019. The company has nothing to announce
to employees at the moment, Levu wrote, adding that Payoneer intends to
carefully consider all its options and take steps that will help the company
meet its goals and continue to grow.
Pioneer employs around 1,000 people, 600 of them in Israel.
The company raised $245 million to date, $180 million of the sum in 2016 when
shareholders, including founder Yuval Tal, sold part of their stake. Investors
include China's largest insurer, Ping An Insurance Group Co of China Ltd.,
Beijing-based CBC Capital, and Menlo Park-based private equity firm TCV.
In a previous interview with Calcalist, Tal stated most of
the company's revenues originate in emerging markets like China, Malaysia,
Brazil, India, Nigeria, and Bangladesh.
XV.
Payoneer Releases Automated
Tax Form Service
Payoneer, a cross-border payments technology company, has
released an automated tax form service to its mass payout offering.
Payoneer clients can now automatically collect beneficiary
information via an online wizard that supports all relevant W-8 and W-9 forms;
create 1099 & 1042 forms for IRS submission with full SSN and EIN
validation; and automatically hold payments until the form is completed by the
beneficiary. For businesses such as ecommerce and freelance marketplaces, ad
networks and vacation rental platforms already disbursing money to their
beneficiaries through the Payoneer platform, this Tax Form Service provides an
end-to-end mass payout solution.
“Payoneer has previously provided a tax form service on a
one-off basis for a couple of clients, but this is first time we’re bringing it
to the full ecosystem in automated way,” company CFO Michael Levine told
Accounting Today. “Not only do small- or mid-size businesses have payment
burdens to contractors or freelancers, but now when they reach a threshold of $600
paid to a payee, they have 1099 or 1042 filing requirements with IRS when
paying contractors. This is a huge burden on companies.”
Payoneer’s platform only withholds payments when a
beneficiary reaches the $600 IRS threshold. The goal of the company’s tax form
service is to enable companies to more easily onboard small suppliers,
especially in emerging markets, by ensuring they’re not overlooked due to the
cost of traditional tax form administration.
“The whole goal is to provide an automated solution that’s
flexible so we create as little challenge as possible,” Levine added.
Payoneer Global payment platform
Reviewed by bsm
on
December 12, 2019
Rating:
Reviewed by bsm
on
December 12, 2019
Rating:
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