This is an especially good week for payment service provider Payoneer which is announcing it has received the remaining $3M of a $4M Greylock investment , and a new deal with iStockphoto.
Payoneer offers Web-based businesses a method to pay their members/users/partners by way of prepaid debit cards. The fully-functioning debit MasterCards are issued to payees worldwide and can be used online, at points-of-sale, or at ATM’s for cash withdrawals in local currency.
The 800-pound payment service provider is PayPal of course. (PaidByCash is another competitor). However, while PayPal is the top online payment service when it comes to person-to-person transactions, it is far from perfect in other respects, especially when it comes to international payments. For payees residing outside the US, PayPal cannot match the ease and simplicity that Payoneer offers when it comes to receiving their funds.
PayPal requires a bank account to transfer funds internationally. To confirm the bank account, PayPal makes a micro-deposit (a few cents) into the account, and then has the payee report back the exact amount, thereby “proving” account ownership. The problem is that for this process to even take place, the banking institutions in the country where the payee resides must support EFT (Electronic Funds Transfer). Not all countries do. For example, India, China the USSR countries, and some Latin American countries don’t. (Incidentally, this wacky process is why I still don’t have a PayPal account… I’ve gone through it 4-5 times in the past few years… The micro-deposit doesn’t register in my account immediately and by the time I remember it, I’ve already made the purchase in some other manner).
On Payoneer, account verification—a PayPal staple—is a non-issue. Anyone worldwide over 13 can get a card and get paid. Cards require one-time shipping and are then loaded and re-loaded electronically by Payoneer. Convenience-wise, the hassles and high fees normally associated with Wire Transfer and Check payments are greatly reduced or, when a bank is involved in the process, averted completely.
Other than the expected back-office goodies, Payoneer offers its business customers a branding and retention tool in the form of a co-branded MasterCard (see examples right).
Payoneer is also announcing the addition of iStockphoto to its client roster. By the end of the year, iStock will begin offering Payoneer as a payment method to its 35,000 contributing artists who earn royalties on the sale of their images and videos. Among Payoneer’s 70 clients are oDesk, MetaCafe, Amie Street and Plimus.
Founded in 2005, Payoneer employs 25 and is headquartered in New York with R&D in Tel-Aviv, Israel. A $2M seed round was raised from Payoneer’s CEO himself, Yuval Tal and private investors including Zohar Gilon, Charlie Federman, Michael Loeb and Ilan Kaufthal. Greylock (Israel) added a total of $4M in Series A this year, with Moshe Mor the partner attached to the deal.
This is a pretty cool service as many uses of branded cards exist. I could see Affiliate payments being made this way. It provides name recognition for the provider and offers a cool factor too.
>>The micro-deposit doesn’t register in my account immediately and by the time I remember it, I’ve already made the purchase in some other manner).
But you could still verify the account so you don’t have to go through the “wacky process” again, though I don’t get what’s so hard about waiting 2 days the very first time you use it.
The 200 pound gorilla in the prepaid card space is Seqouia’s Green Dot & Netspend (acquired by Cap One for 700M).
Although neither focuses on dispersement.
I am responsible for the billing & payment platform at oDesk.
Payoneer has been great for our international provider base. Since launching the oDesk Debit MasterCard (powered by Payoneer) in June, nearly half of our individual freelancer providers have switched to Payoneer to withdraw their oDesk earnings.
It’s not just EFT - in many developing countries, PayPal is a non-option. Even if you can sign up for a PayPal account, you can’t get your money out of it! Which kind of defeats the purpose of money transfer…
In my opinion, Payoneer is the most convenient and lowest-cost way for an individual in a developing country to receive funds internationally.
http://www.odesk.com
What about Money Laundering and Know Your Customer laws? This sounds like a great way for drug traffickers and terrorists to move money around.
Is it possible to use a Payoneer Card to verify a Paypal account? Paypal accepts Debit Cards, and Payoneer is a MasterCard logo’d debit card. Anybody know?
I’m the founder of Metacafe. We’ve been working with Payoneer from day one since we launched Producer Rewards - The program which rewards producers for posting great videos on Metacafe. In less than a year we’ve paid out hundreds of thousands of dollars to producers and everyone is thrilled about the branded card and the ease of use. For us, it simply made a huge headache go away.
payoneer is definitely in the legal gray area when it comes to the patriot’s act, anti-money laundering, and a host of other laws around “know your customer”
We get asked about this often so let us address it for all.
Payoneer is meticulously compliant with all federal, state and MasterCard regulations, including AML, BSA, Patriot act, KYC etc. There is nothing grey about it. As a certified MasterCard Member Service Provider we undergo rigorous ongoing diligence related, among others, to our regulatory compliance level.
We employ multiple layers of checks and balances, both technological and human, so that we are able to minimize the hassle that users have to overcome to receive their payments.
As these regulations continue to evolve, we adapt our procedures accordingly to the changing needs.
can it be used for poker or other skill game sites to make payout to their users? all tournament players can have payoneer cards when they register and payouts are made on their cards.
I think that’s a great news for us non-USA customers.
being a citizen of a developing country, i can assert that, for years i looked for this solution. i just do not understand why it did not exist before. in Tunisia (my country) for example you simply can not have access to any currency, in any form, other than the Tunisian currency when you are not a company. it’s not the law that’s broken, it’s just the banking system.
but, Yuval, your order form still has only one choice for country : “USA”. i think you are missing the point.
People from all over the world can receive the card through one of our partners and have their payments loaded onto that card. We actually have cards just about any place you can think of.
The general site is intended for the ‘guy off the street’ and therefore limited to US only.
Payoneer has been good to me. Affiliates of Plimus have the option of receiving payment via Payoneer. I’ve always received payment on time, and I’ve never had a problem using the card anywhere.