Marketplaces are big business online and poised to get bigger. As more people transition to freelance and consulting, marketplaces are how small businesses find willing buyers all around the world. For an SMB getting off the ground, the opportunity is massive and sounds dreamy, but it's not a free ride —competing against so many other vendors, today's marketplace sellers have just a few seconds to convince potential buyers that they're a trustworthy trading partner.
Ecommerce firms like AirBnB, Etsy, and Amazon give small firms the ability to sell through to large audiences and across geographies they could never reach without using a marketplace. These ecommerce platforms have made transactions silky smooth for buyers, but it's still frustratingly hard for small businesses to get paid. There's a lot of friction around payouts, especially for international sellers.
Indeed, Payoneer moved into a space that seemed ripe for the taking. Marketplaces are seeing much stronger growth than general ecommerce. According to the Internet Retailer 2016 Top 500 Guide, of 26 retailers that disclosed their sales from online marketplaces, marketplaces brought in $455.5 million, or 14.4% of their total $3.17 billion in sales in 2015. That’s up 42.9% from $318.8 million worth of goods sold through marketplaces the year before.
It's taken Payoneer 11 years to hone its payments ecosystem. The firm has invested heavily in its banking and global compliance infrastructure — it takes years of planning and millions of dollars to expand into new geographies, like the company recently did in Japan. Payoneer handles 200,000 monthly applications from SMBs from 200 countries. “If an entrepreneur pitched me today to raise money for an idea like Payoneer, I probably would have said he's crazy,” joked Payoneer's Galit.
Bridging international payments between buyers and sellers
That's where Payoneer comes in — the NYC-based technology firm sees itself as an enabler of cross border trade, in particular for small businesses. The company helps sellers on dual-sided marketplaces like Amazon sell to buyers around the world and get paid in their local currencies. Payoneer opens virtual bank accounts for sellers in the countries that they're doing business. Sellers can then cash out by transferring cash to a Payoneer debit card or to a local bank account. Sitting in between the payments of marketplace sellers and buyers, Payoneer is almost like middleware for global trade. “There's been an incredible transformation, an opportunity for buyers and sellers to meet across borders, but what hasn't changed are the challenges in moving money around world,” said Scott Galit, CEO of Payoneer. “In a world where everything is digital, marketplaces were still kind of stuck with letters of credit, wires, and checks. We're building a digital b2b payment platform that brings together techology and a new global approach to selling and getting paid.”Marketplaces exhibit strong growth
Indeed, Payoneer moved into a space that seemed ripe for the taking. Marketplaces are seeing much stronger growth than general ecommerce. According to the Internet Retailer 2016 Top 500 Guide, of 26 retailers that disclosed their sales from online marketplaces, marketplaces brought in $455.5 million, or 14.4% of their total $3.17 billion in sales in 2015. That’s up 42.9% from $318.8 million worth of goods sold through marketplaces the year before.
It's taken Payoneer 11 years to hone its payments ecosystem. The firm has invested heavily in its banking and global compliance infrastructure — it takes years of planning and millions of dollars to expand into new geographies, like the company recently did in Japan. Payoneer handles 200,000 monthly applications from SMBs from 200 countries. “If an entrepreneur pitched me today to raise money for an idea like Payoneer, I probably would have said he's crazy,” joked Payoneer's Galit.