Payoneer Inc. CEO Scott Galit says a new partnership with online marketplace Fiverr illustrates how his company is positioned for providing payments services in a changing business world.
New York-based Payoneer will support multi-currency payments for Fiverr, which offers an online marketplace for millions of users to buy or sell products and services that start at $5 and go up to $500.
Payoneer will also provide the technology behind a revenue card that Fiverr, located in Washington, D.C. and Tel Aviv, Israel, will provide as a payment tool for its online sellers.
"Fiverr is a real sweet spot for us," Galit says. "It is an exciting company that is growing incredibly quickly and operates as a global freelance community."
Payoneer found its niche in the last seven years by providing payment services for companies needing to pay freelancers around the globe. Last month, Payoneer entered partnerships with three Latin American freelance marketplace providers as part of an expansion in that region.
By providing a "one-stop shop" tailored to delivering global payments in the e-commerce world, Payoneer has established various payment methods and processes that can handle different currencies, security measures and regulations, Galit says.
As such, a company using Payoneer services can deliver same-day or next-day payments to freelance workers in Japan, India and Germany as an alternative to international wire transfers or bank-to-bank transfers, Galit adds.
The payments industry is likely to see more participants in the specialized market that Payoneer operates in because many businesses rely on freelance help, says Scott Strumello, payments industry analyst for New York- and London-based Auriemma Consulting Group.
"You could say that eBay and PayPal already have this sort of setup with its online marketplace, but Payoneer differentiates itself with the relationships it has established with banks and other providers in the different markets," Strumello says.
Economic analysts say small businesses will be vital to economic growth in the U.S., and Payoneer has a "good position in that space" to provide payments services to those merchants, Strumello adds.
Payoneer supports payments via international checks, prepaid debit cards, bank transfers and digital wallets. The company handles payments in more than 200 countries and provides customer support in 35 languages.
When online sellers using Fiverr's marketplace need to be paid, Fiverr will alert Payoneer, and "Payoneer orchestrates everything from there," Galit says. Fiverr provides Payoneer with the data about its online sellers so that Payoneer can deliver the payments to the seller's revenue card, Galit says.
Payoneer has established a network of bank partners to help deliver payments worldwide. "Local banks have set up clearing systems for their local markets, and we have the ability to connect into those local methods," Galit says.
Such an arrangement allows Payoneer deliver payments faster and at a lower cost than through ACH transactions or wire transfers, Galit says. Typical cross-border payments go through various intermediaries that charge transaction fees and perform currency conversions along the way, he says.