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Payoneer is a payment platform that offers a way for businesses to pay and receive money, for a low fee. Payoneer believes that the total addressable market (defined as global e-commerce volume) is $26 trillion a year. Payoneer processed over $44 billion in 2020 alone.
Payoneer works with 9 of the top 20 most valuable companies. Alongside these big names, Payoneer also has 5 million+ marketplaces and businesses, across over 190 countries.
Payoneer also offers:
So, it is basically a bank that includes an accountant to help meet a business’ needs. The one product or feature that is missing is digital coins and no doubt they will be offering that soon, if anything they should make that a major priority.
Scott Galit - CEO of Payoneer, previously a senior VP at MasterCard. Serious financial services pedigree.
Michael G Levine - CFO of Payoneer, ex-City VP and ex-CFO of Maler Technologies. MBA from Wharton.
Betsy Cohen - Tons of finance related experience, including founding Bancorp. Should be able to give Payoneer great advice for future growth.
Payoneer has some big name clients, including but not limited to:
Weird right, they work with Ebay given Paypal does too. This is because they work with countries and specific clients that Paypal not accept into their platform. Investors need to understand that sometimes people have to use other platforms because they the Paypal’s or banks are NOT willing to take the risk. Sure the risk is probably higher but the amount of people that need access to capital or payment process is high when many banks in many countries do not approve people for such type of access.
Integrating, setting up, and teaching staff how to use a new payment platform can be time-consuming and expensive for businesses. Therefore, when a client is set up on Payoneer, it is unlikely that they will switch to another provider. This is best seen by the >100% volume retention that Payoneer has (i.e. customers stay and increase their payment volume).
Payoneer, from what I have seen, has a strong brand (though this is obviously a subjective factor). This idea is reinforced by the presence of their big name clients. Branding is really important in FinTech, businesses need 100% confidence when money and payments are involved. This offers not only stops entrants into their market, but should also facilitate future growth and customer acquisition.
Imagine company A is on Payoneer and wants to pay company B. Company A suggests payment through their usual payment processor, Payoneer. Company B now signs up to Payoneer and decides to do all their payments through it etc. This is the network effect that Payoneer enjoys. This is a very powerful barrier to entry - very difficult to overcome, while also hard to create yourself.
UNSUBSTANTIATED: Conversations on Reddit leads me to believe that Payoneer has a strong presence in Asia. If anyone has evidence, please put it in the comments.
If this is true, it should give Payoneer an edge in capitalising on the future growth of the emerging markets.
Payoneer has some institutional giants already invested, including Wellington Management, Dragoneer Investment Group, Fidelity Management and Research, Temasek, and Franklin Templeton.
What do I think the future holds for Payoneer? I actually think there are several exits for this company.
Bull Case: $26
Main Case: $21
Bear Case: $16
How did I get these numbers? Just educated guesses.
Disclosure I am long on the company (LEAP's and Shares)