Employees at the Payoneer are still trying to understand what hit them: the Israeli startup company has faced a wave of unwanted publicity after Dubai police claimed that suspects in the assassination of Hamas commander Mahmoud al-Mabhouh used its credit card technology.

Payoneer provides prepaid credit cards, which means holders can fill them with money and use them, without the card being tied to a standard bank account. Thirteen of the 27 suspects used prepaid MasterCards issued by MetaBank, a regional American bank, in order to purchase plane tickets and book hotel rooms, said the Dubai police. The police then tied MetaBank to Payoneer.

It is still not clear how bad the publicity is. One source close to Payoneer said: "All such publicity hurts," but added that customers were unlikely to be deterred from buying the company's products.

Of course, what everyone wants to know is whether Payoneer knew, or even helped. Most people think there is no chance the company had anything to do with the affair, since the Mossad - if the Mossad was indeed responsible for Mabhouh's assassination - does not tend to reveal the details of its secret operations to Israeli startups.

If the hit team actually did use Payoneer technology, as the Dubai police claim, then the suspects bought the credit cards like any other customer would have.

Payoneer is a privately held New York-based company, with a research and development center in Tel Aviv. It has received funding from Greylock Partners, Carmel Ventures and Crossbar Capital, and has raised about $14 million so far. Its last fund-raising round was in July 2008, and the company is considered to be in good financial shape.

American authorities, and the banks named by Dubai, are reported to be cooperating with the Dubai police, including regarding the credit cards.

Complicating matters even more is the fact that Payoneer CEO Yuval Tal was a commentator for Fox News during the Second Lebanon War, and described himself as a former Israeli special operations soldier.

Tal told the Wall Street Journal last week that the company was very surprised by the news, but refused to comment on his service in the IDF.

"We are aware of the news reports," said Mary Kae Marinac, a spokeswoman for Payoneer. "We are cooperating with the bank and the authorities to explore the matter," she added.