Small and medium enterprises (SMEs) are the backbone of economies worldwide, yet they face significant challenges when venturing into international markets. Payoneer has positioned itself as a critical financial enabler for these businesses by focusing on cross-border payments and financial tools that traditional banks often fail to provide.
In a recent interview with senior vice president Nagesh Deveta, he explains why traditional banks fall short in serving SMEs and how the company helps SMEs and entrepreneurs overcome trade barriers to expand globally.
Can you give us an overview of Payoneer’s mission and how it aims to support SMEs and entrepreneurs in the APAC region? What differentiates Payoneer from other digital payment solutions providers?
Let me start by explaining what Payoneer is and its origins. Payoneer traces its roots back to around 2005. From the beginning, we’ve focused on cross-border payments rather than domestic or consumer transactions. Our mission has always been to address the specific challenges faced by sellers and small businesses operating internationally.
Initially, we aimed to solve the friction between platforms like Amazon, Lazada, or Shopee and their sellers. These sellers could be offering goods or services and were often located in different parts of the world from the platform itself. The challenge was enabling these sellers to seamlessly receive funds for their products or services. For instance, a seller operating on one of these platforms might be based in a country far from their primary customer base, and receiving payments from cross-border sales was a significant hurdle. That’s where Payoneer stepped in.
Over the years, our focus has shifted increasingly toward the entrepreneur or seller—the cornerstone of our business. These sellers aren’t just working on platforms; they’re also selling directly to other businesses or reselling products and services. Our mission has been to empower these small businesses to overcome the unique challenges they face when expanding beyond domestic markets.
Think about a small business in Singapore—operating locally is manageable with the solutions already available in the market; however, the moment they decide to expand internationally, they encounter immense friction.
New markets mean dealing with different currencies, regulations, and logistical hurdles, which can be overwhelming for small businesses without the financial history or resources of larger, more established companies. Traditional banks often do not cater to these smaller entities, and the tools they need are typically out of reach. That’s where Payoneer comes in—to bridge this gap.
Our mission is to provide these businesses with the financial tools and access to payment infrastructures that are traditionally unavailable to them. Imagine you’re a small business owner who wants to sell goods in the U.S.—one of the first challenges is not just selling the goods but figuring out how to get paid. For instance, if you’re dealing with an aggregator or another business buyer, the process of receiving your money back in your home country can be daunting. This is where our solutions for collections and receivables play a critical role.
We facilitate the entire financial ecosystem—from helping small businesses collect payments to enabling them to pay vendors and suppliers. When we talk about Payoneer, we’re always framing it within the context of cross-border B2B transactions and the needs of SMEs. These businesses represent an underserved population that drives significant growth in most markets. SMEs are the ones creating new products and services and introducing them to different markets. Yet, despite their pivotal role, they often lack the support and tools necessary to thrive in international trade.
Globally, there are millions of SMEs engaging in trade, both importing and exporting. However, they face considerable challenges, and that’s where Payoneer provides value. We’re here to help them expand confidently, reduce friction, and unlock new opportunities in international markets.
This emphasis on enabling global trade and supporting SMEs underscores why Payoneer exists. It’s about creating solutions tailored to the unique needs of small businesses and entrepreneurs—the real engines of economic growth and innovation.
IMAGE: Payoneer
What are some of the unique challenges and opportunities you see for SMEs in this region?
The APAC region is both fascinating and challenging due to its diversity. While businesses across the region share common goals—such as expanding their operations, entering new markets, and reaching new customers—the specifics of how they achieve these goals can vary significantly. For instance, the industries or verticals a Singaporean business targets may differ from those of a Korean, Vietnamese, or Indian company. These differences shape the strategies and challenges that each market faces.
One of Payoneer’s key strengths is its ability to help businesses “look local” while going global. This capability is particularly valuable in overcoming barriers that might otherwise hinder cross-border transactions.
Take the example of a Pakistani customer selling to a U.S. client. A U.S. business might hesitate to send payments to Pakistan due to concerns about perceived risks or unfamiliarity with the process. This creates a significant obstacle for the Pakistani seller, regardless of the quality of their products or services.
To address this, Payoneer provides customers with virtual accounts, such as U.S. dollar accounts. These accounts come with all the necessary banking credentials, including an international bank account number (IBAN), that make them appear as if they are based in the U.S.. This arrangement not only lends legitimacy to the seller but also simplifies the payment process for the U.S. buyer. From the buyer’s perspective, the transaction feels like a local payment rather than a complex international wire transfer.
This solution helps both parties. The Pakistani seller gains credibility and reassurance that they can efficiently receive payments, while the U.S. buyer avoids the hassle and uncertainty associated with global transactions. By bridging these gaps, Payoneer enables businesses to expand their reach and operate with greater confidence on the global stage.
With technology and AI evolving rapidly, how are the needs of SMEs in APAC changing? How is Payoneer helping them leverage new technologies to remain competitive and grow their business?
Payoneer’s customer base is diverse, spanning various industries and verticals across different countries. While the names of these businesses may not be widely recognised due to their SME nature, the types of industries they represent provide a clearer picture of the markets Payoneer serves.
In the Philippines, for instance, Payoneer works extensively with business process outsourcing (BPO) companies. This includes call centres, providers of virtual assistant services, and even telehealth firms, which have seen substantial growth over the past few years. Meanwhile, in Korea, the beauty and cosmetics industry has experienced a significant boom, particularly in exports. Although this growth might not surprise local observers, it has garnered international attention as Korean cosmetics brands expand beyond Southeast Asia to reach global markets.
In Vietnam, trading companies, manufacturers, and mobile gaming and app development businesses form a substantial portion of Payoneer’s clientele. Pakistan showcases its strengths in textiles, garments and IT services, reflecting the country’s role as both a manufacturing hub and a growing player in tech services.
India’s IT services sector remains a dominant force, with many companies co-locating operations globally to enhance their international reach. Similarly, Japanese businesses are diversifying into collectibles, toys, and agricultural exports, such as bananas, meat, and fish. These industries are finding new opportunities to connect with customers worldwide, driven by platforms like eBay and the increasing globalisation of trade.
What’s particularly notable is the shift from domestic-focused operations to an international outlook. Businesses that once prioritised local markets are now exploring global opportunities as barriers to international trade diminish. Payoneer plays a crucial role in this transformation, offering solutions that reduce friction and instill confidence in SMEs to expand their horizons. For example, an Australian company that once targeted only New Zealand might now feel empowered to explore markets across APAC, Europe, and the U.S..
By simplifying cross-border transactions and providing the tools SMEs need to succeed globally, Payoneer enables these businesses to overcome traditional challenges. This support not only facilitates growth but also allows SMEs to take bold steps toward achieving their international ambitions.
When it comes to AI, Payoneer is actively exploring its potential to enhance business operations. While AI may not be a central talking point for the company compared to other organisations, it remains a critical area of focus. Payoneer is consistently evaluating how best to integrate AI into its systems, particularly in areas such as customer service and support. The goal is to leverage AI in ways that provide meaningful improvements and align with the needs of its users.
Regarding digital assets, Payoneer does not currently handle their movement. However, the company is closely monitoring developments in this space. As digital assets gain traction, Payoneer is continually assessing their relevance and potential applications within various industries and verticals. This approach mirrors a broader trend in the financial sector where organisations are exploring the next steps for integrating digital assets into their offerings.
By staying attuned to the evolving landscapes of AI and digital assets, Payoneer aims to position itself at the forefront of innovation while ensuring its solutions remain aligned with customer needs and industry trends.
Who are some of the partners Payoneer is working closely with?
When it comes to partnerships, Payoneer collaborates with a variety of platforms, particularly on the enterprise side. Some of the notable names include Amazon, Etsy, eBay, Lazada, and Shopee. While there are many more partners in their network, these platforms are among the most recognisable and highlight Payoneer’s longstanding focus on marketplace integration.
Payoneer’s partnerships can be broadly categorised into two types of platforms. The first includes platforms like Lazada and Shopee, which primarily deal with goods, catering to sellers involved in buying and selling physical products. The second type encompasses platforms such as Fiverr and Upwork, which focus on gig economy services. These platforms connect freelancers and service providers with clients that have specific project needs.
This dual approach reflects Payoneer’s historical strength in helping sellers seamlessly connect to platforms, whether they are selling goods or offering services. These partnerships form the backbone of Payoneer’s mission to empower businesses and individuals in the global marketplace.
Tell us more about the rationale behind Payoneer’s acquisition of Singapore-based Skuad.
Payoneer’s acquisition of Skuad HR, a payroll management company, aligns with its mission to support cross-border business operations. The rationale for this acquisition is not to address domestic payroll needs but to enhance capabilities for businesses dealing with cross-border employment and payroll challenges.
The COVID-19 pandemic highlighted a growing trend: businesses often struggle to find talent locally and are compelled to hire internationally. For instance, a U.S. company might need to hire talent from the Philippines. However, hiring internationally involves more than just processing payments; it requires managing employment contracts, compliance, and other administrative aspects. This is where Skuad HR’s infrastructure becomes invaluable.
With Skuad, Payoneer now offers solutions to help businesses hire and manage international employees. Whether it’s an IT professional, a virtual assistant, or a contractor, Payoneer can facilitate the process through employment of record services or other tailored solutions. This infrastructure enables businesses to test new markets without committing to the complexities of establishing full-scale operations in those regions.
For example, a business considering a presence in India can use Skuad’s services to hire a team without the immediate burden of setting up a physical office or navigating extensive local regulations. This flexibility allows companies to “put their foot in the door” and gradually build their presence in a new market.
In summary, the acquisition of Skuad enhances Payoneer’s ability to support businesses in accessing global talent, addressing the growing need for cross-border payroll management and enabling market expansion with reduced friction.
