As the Web makes it easier for U.S. companies to hire workers from Bangkok to Berlin, figuring out how to pay them is an increasingly pressing issue. Payoneer, an Israeli start-up now based in New York, aims to fill this niche in the international money-transfer market.
Payoneer enables businesses to pay freelancers, contract workers or salaried employees with a prepaid MasterCard card that payees can use to withdraw cash from an A.T.M. and as a debit card in stores and online. Greylock Partners, Crossbar Capital and Carmel Ventures have invested $14 million in Payoneer.
“What we provide is a very simple way to get the money immediately at a very low cost and to use it in any way that you want, anywhere around the world,” said Talia Mendelson, vice president of business development for Payoneer. Customers include online freelance marketplace Elance, Getty Image’s iStockphoto and a trucking company that uses Payoneer to pay its drivers.
Other methods for transferring money abroad are used mainly for person-to-person transactions, like sending remittances to family members, or person-to-business transactions, like buying products from a foreign company. Businesses could also use these methods to pay workers but since they are not set up for that purpose, payers can face obstacles, hefty fees and lengthy delays.
Sending a check to a freelancer in India, for example, requires postage, waiting for the mail and perhaps waiting out the 30-day bank hold that foreign banks sometimes require to cash checks from the United States. Wire transfers often have high fees and require bank account numbers for both the sender and recipient. Services like Western Union and MoneyGram charge similar fees.
Competitor PayPal, a unit of eBay, works in 190 countries, but recipients can’t get the money as cash in every country and in some countries can only use their PayPal money to shop online. (As a PayPal spokesman pointed out, PayPal and Payoneer are not necessarily competitors, since a payee could theoretically deposit their Payoneer money into a PayPal account.)
Once a payee has a MasterCard from Payoneer, payments load as soon as an employer sends them. Payoneer can send money to any country not on the Treasury Department’s Office of Foreign Assets Control list. (Among the restricted countries are Iran, Syria and North Korea.) Unlike other money-transfer services, Payoneer does not require recipients to have bank accounts. That could expose Payoneer to fraud, but also helps in countries where many workers don’t have bank accounts.
Fees for each service vary, but Payoneer claims to be on the low end. There is a one-time activation fee of a few dollars, a $1 to $2 fee for loading money onto the card and a $1 to $2 monthly fee only if money remains on the card. In many cases, the employer pays these fees so the recipient never sees them.
There is also the currency-conversion fee, which Payoneer has negotiated down from the standard 3 percent with its issuing bank, First Bank of Delaware. And as with other ATM and debit cards, the user is charged a fee when withdrawing cash, and the merchant pays a fee when the card is used in a store.
In contrast, traditional money transfers can cost $10 to $15. PayPal does not charge the sender a fee and, depending on the type of transaction, charges recipients up to 4.9 percent of the amount received.
So far, Payoneer has helped 200 companies sending money to 120,000 cardholders, 85 percent of whom are outside the United States. Many of the companies that use Payoneer offer payees several options, like PayPal or wire transfer, and those who live abroad often choose Payoneer.
ODesk, a Web site that connects technology service providers with people who want to hire them, uses Payoneer to pay its own employees and as an option for providers on the site to get paid. One-third of them choose Payoneer — mostly people living outside the United States.
“The people outside of the United States like that it’s faster access to their money at a lower cost,” said Gary Swart, oDesk’s chief executive.
The online marketing firm MediaWhiz also pays its publishers via Payoneer. “The main reason I started working with Payoneer in the first place is because there are quite a few countries out there that PayPal does not work with. Therefore we were sending checks to these people in random places, and many of the checks were being returned to sender,” said Bill Fish, MediaWhiz’s chief financial officer.
By Claire Cain Miller on August 26, 2008, 9:40 am
Courtesy: http://bits.blogs.nytimes.com/2008/08/26/start-up-offers-a-way-to-pay-workers-abroad/
Payoneer enables businesses to pay freelancers, contract workers or salaried employees with a prepaid MasterCard card that payees can use to withdraw cash from an A.T.M. and as a debit card in stores and online. Greylock Partners, Crossbar Capital and Carmel Ventures have invested $14 million in Payoneer.
“What we provide is a very simple way to get the money immediately at a very low cost and to use it in any way that you want, anywhere around the world,” said Talia Mendelson, vice president of business development for Payoneer. Customers include online freelance marketplace Elance, Getty Image’s iStockphoto and a trucking company that uses Payoneer to pay its drivers.
Other methods for transferring money abroad are used mainly for person-to-person transactions, like sending remittances to family members, or person-to-business transactions, like buying products from a foreign company. Businesses could also use these methods to pay workers but since they are not set up for that purpose, payers can face obstacles, hefty fees and lengthy delays.
Sending a check to a freelancer in India, for example, requires postage, waiting for the mail and perhaps waiting out the 30-day bank hold that foreign banks sometimes require to cash checks from the United States. Wire transfers often have high fees and require bank account numbers for both the sender and recipient. Services like Western Union and MoneyGram charge similar fees.
Competitor PayPal, a unit of eBay, works in 190 countries, but recipients can’t get the money as cash in every country and in some countries can only use their PayPal money to shop online. (As a PayPal spokesman pointed out, PayPal and Payoneer are not necessarily competitors, since a payee could theoretically deposit their Payoneer money into a PayPal account.)
Once a payee has a MasterCard from Payoneer, payments load as soon as an employer sends them. Payoneer can send money to any country not on the Treasury Department’s Office of Foreign Assets Control list. (Among the restricted countries are Iran, Syria and North Korea.) Unlike other money-transfer services, Payoneer does not require recipients to have bank accounts. That could expose Payoneer to fraud, but also helps in countries where many workers don’t have bank accounts.
Fees for each service vary, but Payoneer claims to be on the low end. There is a one-time activation fee of a few dollars, a $1 to $2 fee for loading money onto the card and a $1 to $2 monthly fee only if money remains on the card. In many cases, the employer pays these fees so the recipient never sees them.
There is also the currency-conversion fee, which Payoneer has negotiated down from the standard 3 percent with its issuing bank, First Bank of Delaware. And as with other ATM and debit cards, the user is charged a fee when withdrawing cash, and the merchant pays a fee when the card is used in a store.
In contrast, traditional money transfers can cost $10 to $15. PayPal does not charge the sender a fee and, depending on the type of transaction, charges recipients up to 4.9 percent of the amount received.
So far, Payoneer has helped 200 companies sending money to 120,000 cardholders, 85 percent of whom are outside the United States. Many of the companies that use Payoneer offer payees several options, like PayPal or wire transfer, and those who live abroad often choose Payoneer.
ODesk, a Web site that connects technology service providers with people who want to hire them, uses Payoneer to pay its own employees and as an option for providers on the site to get paid. One-third of them choose Payoneer — mostly people living outside the United States.
“The people outside of the United States like that it’s faster access to their money at a lower cost,” said Gary Swart, oDesk’s chief executive.
The online marketing firm MediaWhiz also pays its publishers via Payoneer. “The main reason I started working with Payoneer in the first place is because there are quite a few countries out there that PayPal does not work with. Therefore we were sending checks to these people in random places, and many of the checks were being returned to sender,” said Bill Fish, MediaWhiz’s chief financial officer.
By Claire Cain Miller on August 26, 2008, 9:40 am
Courtesy: http://bits.blogs.nytimes.com/2008/08/26/start-up-offers-a-way-to-pay-workers-abroad/
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