When I last covered payment service provider Payoneer, the company had announced the collection of $3 million more in funding and the addition of iStockPhoto to its client roster. Today, the company is announcing the initial rollout of “Payoneer Virtual US Account,” a new offering that simplifies payment cash out for international payees.
The new offering allows Payoneer card holders that live outside the US to receive direct Automated Clearing House (ACH) deposits/payments without the necessity of actually having a US bank account.
Here’s how it works: Payoneer maintains a bulk of sub-accounts under its main account, which is held in an American bank. When an ACH transfer is initiated, each of these sub-accounts is referenced using its own routing and account numbers. When the funds are credited to one of these sub-accounts, Payoneer loads the funds to the associated card.
Contrary to their name, these accounts are not virtual at all. Payoneer’s thinking here is to call them virtual accounts because they only serve as channels for loading money onto their cards. The accounts cannot be used for wire transfers, they don’t bear interest, etc. I may be splitting hairs, but the name could be a bit snazzier.
The Payoneer Virtual US Account might not seem all that exciting to some, but I assure you, this is a huge deal if you are an international payee. Take the following scenario as a case-in-point:
Let’s say you’re an affiliate marketer living in Russia and you’ve just had your monthly commission deposited to your PayPal account. With Payoneer, it works like this now: you can perform an ACH transfer directly from your PayPal account to your Payoneer Virtual US Account. The funds will be immediately available on your Payoneer Debit MasterCard balance, ready for cash withdrawal from an ATM in Moscow, or available for charge at any MasterCard point-of-sale station (department stores, supermarkets, etc.).
Payoneer’s Virtual US Account program is still in pilot mode and only available to a select group of cardholders, for whom Payoneer can accurately verify the source and destination of funds.
While the program is clearly valuable to international payees, things are a bit stickier with the PayPals, LinkShares and iStockPhotos of the world whose “blessing” is necessary for the program to take off. The crux of their concern is a fear of issues related to money laundering compliance. They would prefer to avoid the matter completely rather than risk getting themselves into hot water. Their “blessing” is necessary because they may already (or can easily in the future) update their terms and conditions to stipulate that ACH transfer to payees from certain countries are barred.
The fact that Payoneer’s systems and methodologies are designed to deal head-on with international compliance issues should help it on this front. If Payoneer has been given the green-light to broaden its offering to include Virtual US Accounts, it has probably handled compliance issues to the satisfaction of its bank, which must have kept a particularly close eye on it from day one.
Many, if not most, Internet startups focus on the American market and its users. Often times this leaves international users without the access to products and services that US users find common-place. So it’s good to see a company like Payoneer simplify payments and cash outs for international payees. It might not be easy, but the rewards could be substantial.
I like this idea, it is a kind of a new paypal
Nath
http://www.themostpowerfulcompany.com
Is this an alternative for paypal payment ? Or just another payment service?
Before 9/11, non-US citizens were able to open bank accounts in the US. This policy is no longer in place — according to US law, you must be a citizen or a legal alien in order to open a bank account.
So, was Payoneer’s solution approved by the proper authorities? Isn’t that ‘money laundering 2.0′?
James- It’s not a real bank account, it’s just a number that links the transferred money to the card. Also I’m sure that Payoneer monitors the money going into these accounts just like they do the payments going into the card regularly.
Great find! Incidentally, I’m an affiliate marketer who is currently considering relocating to Moscow away from the luxury of Geneva, Switzerland, so it could be a real life-saver when it comes to receiving payments for my online work.
Ben,
Do you know what exactly is being monitored? I could not find anything on their web site that talks about compliance, and this is not the best practice I expect to see on a bank’s website.
Do you think that a small startup that is doing whatever it can to grow their revenues, is going to say no to a 3.5% card loading commission, if the source is unknown.
http://www.payoneer.com/Pricing.aspx
Hi James,
Just to clarify:
A - this is not a bank account but a method of payment using ACH.
B – not related to the discussion here but non-US citizens are allowed to open bank accounts in the US.
C – Money laundering involves money from illegal sources, since we verify the source and destination of the funds and we open this service only to selected card holders this is not the case.
–Tomer
Payoneer
It seems that Paypal can easily prevent this service interacting with Paypal accounts. The minute that Russian hackers start loading Paypal accounts with fraudulent transactions in order to quickly cash out through a new payment system, Paypal will prevent it.
Paypal doesn’t offer service in parts of the world for a very good reason.
The cards are being funded by US corporations. The source of funds is well known this is why it is not considered money laundering. It is no differnet than a US corporation mailing a paper check.
Hi
PayPal does not provide service to Pakistan so we miss a lot on online transactions , affiliates etc. Will PAYONEER work that service for Pakistan.
Thanks.
Payoneer card and services rock, I’ve been using them for the last year and I’m very happy, number one solution for international payments.
Russian residents have no ability to _receive_ money to their PayPal accounts, only to make payments to other accounts.
Peru is also banned from receiveng funds. I sell leather journals and would like to know if anyone happens to know of other 2checkout way of getting paid online?
Thanks and great article.
I forgot to mention in my previous comment that Payonner has a patent pending for its CIP (customer identification process) and KYC (know your customer) technology.
Lots of our R&D resources are spent developing technology to deal with user identification and compliant issue related to international payments, we take these challenges very seriously and are dedicated to continue developing the best technology for a best practice in international payments.
Tomer
Payoneer
Hi, we have that kind of services in France too, for example Flouss.com . It seems to be very similar to payoneer : you have technical accounts in France and you reload a banking card which is abroad and you can withdraw the money from any ATM. You may also use SMS to send the reload instruction.
10:50pm on the 10th, the site is down with a “server is too busy”.
Should I be concerned that this is the message I’ve been receiving for the last 5 hours?
I’m not sure how comfortable I am going to feel with financial transactions going over Twitter-sized servers.
Payoneer is having tech issues on my daughters prepaid mastercard is not working. She’s in Israel (with no access to money) and I am in the U.S. This has been going on for 3 days. Payoneer should get their technology working correctly before marketing additional services.
Where do you think most spyware/malware authors live ? spammer networks ? Now that the authorities have started to crack down on egold payments they need a new way to get their payments.
“C – Money laundering involves money from illegal sources, since we verify the source and destination of the funds and we open this service only to selected card holders this is not the case.”
What if it’s not illegal to spam in the country the money is being sent to ? How are the source and destination verified ? And what happens if a US/European agency comes knocking ? It would be nice to have these questioned answered on a website.
Hi Asad,
Payoneer will only issue cards if the users asking for the card registered to get the card from one of our partners , we only work with US corporation paying users worldwide, we don’t serve walk-ins, among our partners you can find companies like iStockPhoto, 2Checkout, Elance, oDesk, etc hence we always verify the destination of the funds are coming from one of them. Regarding the website, that for the feedback, stay tuned for upcoming updates
Thanks
–Tomer
Payoneer
Hi Tomer!
I am very interested Payoneer Virtual US Account. When this will work?
I know that some customers have already offered Payoneer use such accounts. How can I become such a user? I have 2 cards Payoneer.
Thank you!
Payoneer is great, I just figured out that people can load in money to me from another credit or debit card. It’s almost like a bank account
where to create a new payoneer account??
I am from Pakistan ! Does Payoneer work in Pakistan ?
BTW when the fuck is PayPal coming to Pakistan ?
I think they all are missing billions of dollar of e-commerce transactions in Pakistan.
I second you Ghaus! Paypal surely does lose quite a business here!
Payoneer card and services are excellent, I’ve been using them for the last year and I’m very happy, number one solution for international payments. Only wish that the cuurecny could be changed as i get hammered with dollars to euro conversion.
In this climate i also worry about the company going bust so i like to get my money out quickly
The new offering allows Payoneer card holders that live outside the US to receive direct Automated Clearing House (ACH) deposits/payments without the necessity of actually having a US bank account.
For me thats great !
* Some ATM like machines such as Metro Ticket machines which accept Visa/Mastercard and debit cards did not accept the Payoneer card to purchase a Metro Ticket etc.
We believe Payoneer should review their “wrong PIN” policy to ensure card holders are not charged extra fees just because they are used to their hand movements. Of course we agree that you should better type by numbers, but if you watch yourself typing next time you might just notice that you enter your number by remembering moves instead of actually typing in your secret PIN number
Well I have been using these cards for almost four months now and mostly used them online for shopping in US$. Once I tried to withdraw funds from a local ATM but the transaction was declined stating Contact the Bank which issued the card. I do not know what was the problem.
Strictly speaking instead of Master Card Payoneer should provide both Master Card and Visa Debit Cards. This would be great. What do you think Allan or Tomar
1- Is it possible to load the card with Paypal funds?
2- Is it possible to pay less than 3% for withdrawal in Turkey? What are the factors which determine this percentage? Because http://www.payoneer.com/CardholderFees.aspx says that “$2.15 + UP TO 3%” for each ATM withdrawal outside US. What do you mean by “up to”?
3- What is the fee if I use it at a Point of Sale outside of US?
I know my USD money in my card will be converted to my national currency when I withdraw and shop. Where can I see the current rates actually being applied at this moment especially the rate of USD / TRY ?
Thanks.