Payoneer CEO Says B2B Product Is Powering Platform Growth

Cross-border expansion is crucial to business growth goals, even for those FinTechs supporting international transactions.

This, as Payoneer Global executives told investors on the company’s fourth quarter and full year 2022 earnings call Tuesday (Feb. 28) that they remain “very optimistic and excited about long term growth of our B2B business.”

The FinTech focused on small and medium-sized business (SMB) said its B2B accounts payable (AP) and accounts receivable (AR) volumes increased 39% year over year, representing 12% of total volume in 2022.

“Payoneer is at a pivotal point in our evolution, and we are operating the business with a focus on long-term growth and operating efficiency. We are becoming the partner of choice for emerging market SMBs who need to manage their global financial activities in an increasingly digital world,” said John Caplan, co-CEO of Payoneer.

Caplan will assume the CEO role full-time Wednesday (March 1) as part of a transition announced last spring.

He added on the call that around 2 in every 3 of Payoneer’s B2B AP/AR product customers are new to the Payoneer platform.

“2023 is really the first phase of onboarding around B2B functionality for our B2B customers,” Caplan said.

PYMNTS research in the “Global B2B Payments Playbook” finds that businesses are examining new ways to optimize their cross-border B2B payments as they work to meet the challenges of making these payments as well as the shifting needs of their customers, partners and employees.

An On-Ramp to the Global Economy

“Payoneer is serving SMBs of all sizes from more than 190 countries and territories,” said Scott Galit, who Wednesday will step back from his role as Payoneer co-CEO to take on an advisory consulting role, per the announcement.

“We are penetrating into the $5 trillion [cross-border B2B] space that’s really dominated by legacy banks and checks and wires, and bringing our innovative solutions to the market,” Caplan told investors on the call. “People view Payoneer as a critical on-ramp to the global economy.”

He noted that Payoneer feels well positioned to grow its B2B product business as the company is mostly facing “legacy providers and analog solutions.”

Wire transfers and other payment methods are often ill-equipped to keep international vendors and other partners satisfied, as cross-border B2B transactions typically pass through multiple sequential financial institutions along their journey. International wire transfers can take as long as five days to arrive.

“We expect our high-value services, including B2B AP/AR, Commercial Mastercard, Working Capital, and Checkout, to continue growing faster than the overall business. And we intend to continue diversifying our geographic revenue mix to focus on high growth, high margin geographies,” said Bea Ordonez, deputy chief financial officer, who will also assume the CFO role full-time Wednesday.

See also: Payoneer Adds UK License to Its Global Regulatory Approvals

Ordonez highlighted how growth of Payoneer’s commercial Mastercard product tripled over the past year, and other Payoneer executives on the call shared their excitement around the opportunities that bundling that product with the company’s B2B AP/AR solution might bring.

Company executives also indicated a future focus on adding more credit and lending solutions to the Payoneer platform, as well as faster money movement capabilities.

“We are fine-tuning our products to profitably support our role as an end-to-end payment and financial services partner for SMB customers,” Caplan told investors on Tuesday’s earnings call.

The company’s strategic focus on diversifying geographically proved to be prescient and resulted in nearly 35% of 2022 revenue coming from Latin America, Asia-Pacific, and South Asia, Middle East and North Africa, compared to about 20% in 2018, per reported financial results.

“Payoneer reported record fourth quarter and full year revenue, generating more than 30% year-over-year growth for both periods,” Galit said.

“This is a global product with a global opportunity serving customers that are in every industry we could just about think of,” Caplan added.

There exists a significant space for innovative FinTechs to help underserved SMBs gain access to working capital and cross-border payments.

Just 23% of SMBs found their current cross-border payment solutions to be very or extremely satisfactory, according to “International B2B Payments: A Guide for Entrepreneurs and Digital Businesses,” a PYMNTS report.