“Moving beyond traditional definitions creates a significant opportunity to deliver smoother, integrated solutions”: Payoneer CEO John Caplan on driving growth through emerging markets

Global expansion is now becoming a goal for many businesses, but international payments remain a vital challenge to address.

At the recent Tearsheet Power of Payments Conference in New York, John Caplan, CEO of Payoneer,  outlined how Payoneer has adjusted its strategy to better meet the cross-border payment needs of businesses in emerging markets.

“Payoneer exists to make it easy for businesses anywhere to do business everywhere,” says Caplan.

Don’t be like a snowman, be a snowplow instead

Payoneer’s renewed focus on prioritizing businesses in emerging markets reflects Caplan’s vision, shaped by his experiences leading the company in the past year and a half. He believes “brilliance is evenly distributed, but opportunity is not.” 

The idea that, despite having 7.5 billion people on the planet, only some people have the resources or access to participate in the global economy fully felt like a problem Caplan was determined to address. This belief has guided him throughout his career, from his time at Alibaba, the fashion talent agency, Ford Models, to his leadership at About.com.

For Caplan, it’s all part of the same challenge: be the snowplow that clears the obstacles, enabling people to reach their full potential.

Tactical strategies implemented by the new Payoneer CEO

To tackle the critical challenges of payments and compliance for SMBs expanding beyond their home countries, Caplan introduced two pivotal strategies at Payoneer:

1. Compliance: As Caplan began steering Payoneer, his first decision was to double the firm’s compliance budget. He believes that trust is the foundation of the company’s business, and ensuring customers feel secure using the platform was a priority from the outset. He also agrees that building and maintaining this trust is an ongoing effort.

“We still have work to do to improve it,” he says.

2. Tech and collab: Caplan emphasizes the importance of technology and collaboration in the firm’s growth and providing better support to small businesses (SMBs). Growth, he notes, requires collective efforts involving fintechs, banks, regulators, and governments instead of limiting collaboration to similar entities.

“My goal,” he says, “is to turn conversations into opportunities for collaboration.” 

A case study of an SMB in an emerging market

To explain how Payoneer supports businesses in emerging markets, Caplan uses the example of an SMB in Vietnam.

Picture this: you’re a small business owner in Vietnam, creating handmade textiles that have become a local sensation. With your business booming, you decide to expand and set up an online store on Shopify, distributing your products through Amazon and Walmart. As sales start to grow, you have a new idea — why not export a full container of textiles instead of just a handful of holiday-themed items? You bring in more revenue, hire staff, and begin building a global team, adding employees in Mexico and Colombia to help you expand further.

But then, the problems begin. You start receiving alerts about issues with your payments. It turns out, the money from your international customers is stuck in limbo. Their banks, located on the other side of the globe, aren’t compatible with your local Vietnamese bank. On top of that, you’ve been charged hefty conversion and processing fees, which erode the profits from your overseas sales. To make matters worse, you’ve received two suspicious chargebacks that need your immediate attention. 

Suddenly, your hard-earned money is stuck in cyberspace, and you’re left dealing with angry customers, confusing fraud problems, delayed payments, soaring transaction fees, unfavorable exchange rates, complicated compliance issues, and an increased risk of falling victim to bad actors.

The entrepreneur in Vietnam who crafts textiles likely doesn’t have expertise in roles like CFO, treasury officer, or controller — skills that likely aren’t typically taught in her region.

These are the key areas where Payoneer is concentrating its problem-solving efforts, according to Caplan. The payments firm provides quick KYC (Know Your Customer) services besides compliant onboarding processes to help SMBs navigate these challenges as they scale, whether in managing sales or handling payroll. Other financial services include invoicing, payment cards, and in-network transfers to support their global growth​.

“We think borders shouldn’t hold businesses back,” he says. “This is sort of the essence of what fintech companies are doing compared to analog businesses.”

Caplan holds the view that fintechs are changing the speed of cross-border money flows, particularly in emerging markets, yet he also recognizes the key strengths that traditional institutions bring.

He views traditional and digital banks as distinct entities but believes they could greatly benefit from converging. Traditional banks bring local knowledge and expertise, while digital banks offer speed and innovation. Combining these strengths could result in unmatched service and value to customers.

“I think those things, as they fuse, create real value for customers,” notes Caplan.

The untapped potential in emerging markets

As a Manhattan native, Caplan shares that growing up, he viewed his hometown as the epicenter of the world. However, over time, he has come to realize that the world is far more expansive than just the US.

Research shows that emerging markets are home to 85% of the world’s population and 90% of youth, who are mobile and digital-first. Caplan sees emerging markets as crucial for global business growth. This demographic shift, Caplan notes, explains why digital banks like Revolut and Nubank are well-positioned to capture substantial market share from traditional banks in the regions in which they operate.

Providing an overview of Payoneer’s business growth in emerging markets, Caplan says that the firm’s business in India is growing faster than the country’s 7% GDP growth rate and even outpaces China’s GDP growth. “The real growth is happening in emerging markets, where exports of goods and services are propelling the global economy,” says Caplan.

In the US, many SMBs are less global-minded, as they can operate successfully within the local market. Research shows only 10% of US-based SMBs export, relying on demand along regional corridors like the I-95. However, he highlights that “most of the world can’t afford to ignore global opportunities,” as staying within national borders may limit potential. 

2 approaches used by Payoneer to grow in the future

Looking ahead, Caplan aims to expand on these 2 approaches to drive further growth at Payoneer:

1. Cultivating relationships like those seen in community banks: Caplan shares that a key factor in the growth of businesses like Payoneer is ensuring that “being customer-first” goes beyond just rhetoric. “It’s about thinking globally but acting locally — understanding the local needs of your customers,” he adds. 

This has traditionally been reflected in the role of local community banks, with relationship banking rooted in knowing the people they serve and recognizing their challenges. Payoneer aims to replicate this at a global scale, according to Caplan.

2. Adding an exclusive touch to make offerings shine: To illustrate Payoneer’s evolution, Caplan likens it to Jack Dorsey’s launch of the Square Reader. While point-of-sale systems had existed for years, Square redefined them by making them more modern and “sexy”, turning them into an entry point for selling financial services to customers. 

Payoneer intends to mirror this approach, leveraging the success of its marketplace payouts business, which grew by 17% year-over-year in Q3 2023. This YoY growth has laid the groundwork for Payoneer’s broader ambition to build a comprehensive financial service platform for SMB owners. 

Earlier this month, the payments firm reported strong figures for Q3 2024, with a 19% YoY revenue increase to $248 million and a 25% YoY growth in transaction volume to $20.4 billion. The company raised its 2024 revenue forecast by $20 million, now projecting a range of $950-$960 million​.

“The lines between what a bank is, what a fintech is, and what a software company is are increasingly blurry,” says Caplan. “There’s significant opportunity in not adhering strictly to traditional definitions but instead thinking outside those boundaries and delivering smoother, integrated solutions.”