Transferring funds within a country is easy: bank transfer, check or simply, cash. Transferring money between different countries is trickier.
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For instance, depositing a dollar check at an Israeli bank and converting it into shekels is no trivial matter. One has to open a dollar-denominated bank account, deposit the money in it, wait (often weeks) for the bank to clear the check and then ask the bank to convert the money into shekels. All this involves multiple fees.
Yet in a globalized economy, people need to transfer money internationally all the time.
"I established the company in New York in 2005," says Yuval Tal, Payoneer's founder, who served until 2011 as its CEO and now is its president and director of business development. "We began by serving American kids who come to Israel on programs like Taglit-Brithright, Hillel or with the Jewish Agency. We provided them with debit cards they could use to pay for things in Israel. "
Payoneer's client base has long since expanded far beyond this core group. Today its technology is mainly for people with a long list of payment recipients, or what is known in Internet parlance as affiliate networks.
"Our customers are companies like oDesk, One Hour Translation and Elance. They work with suppliers from around the world and need to pay them," says Tal. The three firms he mentioned are on-demand service providers that connect freelancer translators, programmers and the like to work offers. Payoneer solves the issue of how payment is done.
"These and international companies need to pay suppliers, contractors, freelancers around the world," says Tal. "We enable them to transfer to us the money and we handle its transfer to the recipient through a variety of means. We can transfer money through PayPal if that's what people want. We have local bank accounts in 95 countries to handle bank transfers in local currency."
Another option, he explains, is receiving a Mastercard debit card: They get the money directly to their card in dollars, euros or pounds. Payoneer today issues more cards than Israeli credit card issuers Visa-C.A.L., Leumi-Card and Isracard put together, Tal claims. "We can also transfer money through WebMoney, which is the Russian PayPal and Alipay, which is the Paypal of China."
Payoneer also has a product for very-small size service providers and a service that allows customers to open a virtual American bank account. This means that a small client in China can use Payoneer to offer their services on Amazon or another American website and receive payments to cover expenses, all in dollars.
"Our goal is to remove barriers to international payments, to save time, to reduce cumbersomeness and eventually increase business activity," says Tal. Don't think it's easy: "Among our 250 employees, about 50 work just on regulatory issues, to confirm that we abide by the laws of every country and that there isn't any money laundering," says Tal.
Payoneer is a mature startup. Some 180 of the company's 250 employees are located in Israel, with the rest working in the United States and Gibraltar. The company raised $22 million in capital in two rounds, the second in 2008. Payoneer hasn't needed external funding since. Tal claims the company's been profitable since 2010.
He's also optimistic about future growth. "Payoneer facilitates billions of dollars worth of transfers each year," says Tal. "The world of payments has an annual turnover of $1.1 trillion per year just in terms of fees. The sky is the limit."