Payoneer Carves Out Niche for Escrow in B2B Online Payments with Acquisition
March 17, 2016
New York City-based Payoneer has acquired a Silicon Valley company that will enable the online payments provider to offer businesses conducting B2B cross-border online purchases the option of using an escrow service to complete transactions safely. Employing a trusted intermediary to hold funds in financial transactions until both parties are satisfied has almost as long a history as money itself. Leveraging the practice in online transactions is growing in popularity as well. Alipay, the preferred payment method of the world’s largest e-commerce retailer—Alibaba—was based on the concept of escrow.
Payoneer said its acquisition of Armor Payments enables it to address a gap in the B2B transaction market between $500 and $1 million where neither credit cards nor letters of credit are suitable. Scott Galit, CEO of Payoneer, said the deal allows the company to serve a global proliferation of online marketplaces that has arisen in many specialized verticals to facilitate connections within industries among buyers and sellers who very often do not know one another.
“Small businesses all over the world now have access to international trading opportunities they never did before, both through marketplaces and directly,” Galit told CardNotPresent.com. “Armor Payments created a trusted intermediary relationship where an online buyer feels confident sending a payment because they know the seller can’t get it until the goods are delivered. And the seller knows they can ship the goods because they buyer has already put the money into a trusted and secure repository. The buyer and the seller can trade with more confidence.”