1. MAY 19 - 23, 2014 visit paymentweek.com
EBay
Contemplates
Accepting Bitcoin
Make Payments With
Voice-Activated
Options Through
Google Glass
ALSO INSIDE:
Underground
Economy Goes Main
Street –
Implications
GLOBAL PAYMENTS FOR ALL
5

2. 2
F E A T U R E D A R T I C L E S
Felix Shipkevich
FOUNDER
Jason Mongiello
DIRECTOR OF MARKETING
GRAPHIC DESIGNER
Kevin Xu
EDITOR
CONTENT STRATEGIST
Andrew Barnes
MANAGING EDITOR,
EMERGING PAYMENTS
Jenn Roberts Ma
CONTRIBUTING WRITER
Gregory Sweet
CONTRIBUTING WRITER
Kyle Dowling
CONTRIBUTING WRITER
Jane Genova
CONTRIBUTING WRITER
Michael Foster
CONTRIBUTING WRITER
Helen Wallis
CONTRIBUTING WRITER
David Cross
CONTRIBUTING WRITER
Monique Zami
CONTRIBUTING WRITER
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65 Broadway
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Week should be directed towards our
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M A R K E T P L A C E
T E C H
E M E R G I N G P A Y M E N T S
Exclusive Q&A with Payoneer’s Scott Galit:
Global Payments for All
Scott Galit, CEO at Payoneer, tells us what it’s like
to build a global network, working with Airbnb
and MasterCard, and the need for new players in
payments.
S P O T L I G H T A R T I C L E
4 - User Privacy is the Next Big Thing in Payments
3 - Make Payments With Voice-Activated Options Through
Google Glass
I N D U S T R Y V O I C E S
6 - EBay Contemplates Accepting Bitcoin
M A Y 1 9 - 2 3 , 2 0 1 4
7 - As PayPal Tests BLE Payments, Consumer Readiness Questioned
8 - KakaoTalk Prepares Money Transfer Service
9 - Apple Stores Prepare For NFC Payments
10 - Why Europe Will See Mobile Payments Success Before the U.S.
15-ExclusiveQ&AwithPayoneer’sScottGalit:GlobalPaymentsforAll
13 - Underground Economy Goes Main Street – 5 Implications
11-TheWorstCasesofInflationinHistory–CurrenciesDoubling
Overnight

3. T E C H
3
Mobile
Make Payments With Voice-Activated Options Through Google Glass
By: Daniel Cross
G
oogle Glass has been at the forefront of
emerging technologies and it’s latest
addition is no exception.
Working in tandem with its proprietaryGoogleWallet
mobile payment platform, users can now manage
payments using voice-activation technology.
Google Glass is essentially a pair of glasses that
can be controlled by voice commands or by touch
through a panel worn over the right ear.
The inventive new device is still in its infancy with a
limited release and the payment option will only be
available to users in its corporate network.
A simple voice command like “send money” will
allowusers to transfer funds via Google Wallet.Gmail
already offers a peer-to-peer lending service by
allowing users to send funds as email attachments.
Hands-off payments systems are becoming more
mainstream however and Google Glass is taking
advantage of the possibilities.
Other companies are quickly hopping on board as
well. Startup Eaze recently released a beta version
of its bitcoin payment app for Google Glass with
Nod to Pay.
Even larger companies like LevelUp and MasterCard
are working with merchants to enable payment
methods using Google Glass. Google Wallet is
looking to get a retrofit as well in order to better
support the growing need for mobile payments and
hands-on technology.
The integration with Google Wallet is a natural fit
as new Google Glass wearers are required to set up
an account in order to purchase the product. Each
monetary transaction through the device will net
Google 2.9% or $0.30 cents, depending on the value
of the transaction.
Image credit: Giuseppe Costantino

4. 4
T E C H
4
Security
User Privacy is the Next Big Thing in Payments
By: Gregory Sweet
D
uring this month’s CeBIT
2014 event at Sydney’s
Olympic Park, Director of
the US Cyber Consequences Unit,
Scott Borg, asked businesses and
governments to make online
privacy a top priority.
The CCU is an independent, non-
profit research institute that
assesses strategic and economic
consequences of cyber-attacks.
Borg believes consumer privacy
online is on the verge of becoming
a huge issue. He says too many
businesses consider privacy a
nuisance or compliance issue,
and notes this is “profoundly
wrong and dangerous.”
Sacrificing Privacy For
Convenience
Borg is worried by comments
from multinational CEOs that
privacy protection is obsolete
in today’s online environment.
Google and Facebook’s CEOs
have been quoted making similar
statements. The sentiment seems
to be “use our free service and
we’ll provide you targeted ads
and promotions to match your
preference.”
While information sharing has
ballooned through social media,
Borg argues personal privacy
should not be compromised for
improved user experience.
The handling of this collected
intelligence has the potential to
completely wipe out privacy.“The
challenge is to maintain all these
economic advantages, while still
protecting privacy so we still
have these engines of economic
innovation,” said Borg.
Info Gathering Done In Mobile
Payments
In a typical credit card transaction,
the involved parties get an
incomplete view of the sale.
Data collection is fractured so that
only limited private information
is transferred to the merchant,
payment provider and bank.
Why? Under the current structure,
merchants only collect “Level 3”
data: purchased items and the
customer name.
Level 3 data is usually not shared
with other participants in the
transaction. Merchants can’t
identify the customer by name or
obtain contact information.
Image credit: g4ll4is

5. T E C H
5
Payment providers (Visa,
MasterCard, American Express)
receive the account number,
transaction amount,and merchant
identity but no information about
the item purchased.
The banks involved also typically
receive limited information: the
total amount of the purchase,
where the purchase was made and
the customer’s unique identity.
However mobile payments
could allow merchants to collect
personally-identifiable contact
information from consumers and
transfer Level 3 data to payment
providers. This new scenario
could allow all involved parties
(merchants, payment networks
and banks) to attain complete
consumer contact information
and specific purchase information.
This enhanced information
could then be shared to solicit
promotional emails and offers to
the consumer.
“Would you like to receive
coupons or have your receipt
delivered via email?”
A 2013 study shows 81% of
Americans objected to sharing
their telephone number with
a store where they purchased
goods. 15% would probably allow
it, while only 3% would definitely
allow it. 33% would be willing to
share their email address, 51%
stated they definitely would not
and 16% said they probably would
not allow it.
Americans value their privacy
at the point of sale. Merchants
and payment providers should
consider mobile payment models
that protect consumer privacy to
ensure consumer expectations are
respected. A possible compromise
for all parties would be a uniform
regulation for handling point-of-
sale information.
California laws preventing
merchants from requesting
addresses and other consumer
contact information provides a
favorable model for a universal
policy.
An opt-in standard on a per-
transaction basis could empower
consumers to share where they
feel appropriate but block this
information collection and
sharing by default.
Procedures To Protect Privacy
Scott Borg recommends drawing
a line between machine access
and human access to data.
Consumers are less concerned if a
computer program is sifting data
and displaying ads, but a human
tracking their activityis a different
ballgame.
Borg believes giving added access
to machine tracking would lessen
human monitoring of our online
presence. He proposes a two-
step authentication process and
threshold where a list of criteria
would have to be satisfied by
machine before human eyes could
access anyone’s data.
Rather than looking strictly at
security, Borg stresses businesses
need to address storing data
differently.
Customer data and personal
information should never be
stored in a single location,
but broken up into separate
components and stored in
separate locations–both virtually
and geographically. This provides
enhanced protection against
security breaches and ensures
company staff cannot intrude on
a complete personal profile.
Consumer information is a touchy
subject. Businesses must cater to
America’s sensitive perception
of their personal data. Creating
a transparent and fair privacy
policy will be a huge step towards
a universal adoption of mobile
payment systems.

6. 6
E M E R G I N G P A Y M E N T S
6
Digital Currencies
EBay Contemplates Accepting Bitcoin
By: Jenn Roberts Ma
E
Bay CEO John Donahoe revealed the company
is considering adding bitcoin as a payment
option at its annual shareholder meeting on
May 13.
“We think bitcoin will play a very important role in
the future,” Donahoe said during a question and
answer session.“Exactly how that plays out, and how
we can best take advantage of it and enable it with
PayPal, that’s something we’re actively considering.”
Donahoe’s remarks signal a major shift in the
e-commerce giant’s attitude toward bitcoin. In
annual regulatory filings, eBay held that bitcoin
platforms are potential competitors to PayPal, which
serves as its payment processing service. PayPal is
a major profit generator for eBay, representing 41
percent of its revenues last year.
Notably, PayPal President David Marcus pronounced
the division was not ready to integrate bitcoin late
last year at the LeWeb conference in Paris.
“Whenever the regulatory framework is clearer, and
the volatility comes down, then we’ll consider it,” he
said.
Unlike traditional currencies,bitcoin is not regulated
by any government body and enables near-
anonymous transactions.
Consequently, it has gained a reputation for
facilitating illegal activity—including the notorious
Silk Road scandal.In October 2013,the FBI shut down
the underground website Silk Road for enabling
drug transactions using bitcoin. As a result, the
currency has sparked widespread concern among
governments and financial regulators.
Nonetheless, as bitcoin continues to grow in
popularity, small businesses around the world are
increasingly accepting it. In early January, Overstock.
com became the first major retailer to join the
bitcoin market.
Bitcoin offers unique advantages for consumers
that may bolster its public appeal. For instance, the
processing fee for bitcoin transactions on PayPal
would be less than the typical 2–3 percent because
banks and clearing houses lack involvement.
Donahoe’s remarks on bitcoin—which he calls “a
new, exciting and emerging technology”—may have
significant implications for the currency.
PayPal is a global leader in digital payments,
processing $125 billion in total payment volume in
2013 alone. If adopted by PayPal and eBay, bitcoin
could improve its reputation and gain broader
recognition as a legitimate currency.
Image credit: Stuart Isett/Fortune Brainstorm Green

7. E M E R G I N G P A Y M E N T S
7
7
Card Solutions
As PayPal Tests BLE Payments, Consumer Readiness Questioned
By: Kevin Xu
U
S Consumers aren’t so open to new payment
technologies, as we’ve seen with the slow
adoption of NFC checkout and mobile wallets
in general.
Bluetooth lowenergy(BLE) beacons are a frictionless
solution that may gain traction, but a recent survey
shows that consumers aren’t yet comfortable with
the idea.
PayPal is currently testing its Beacon checkout
system in Palo Alto, California.
PayPal mobile app-using customers can shop
at retail locations and walk out with goods and
merchandise after name and facial confirmation
from the merchant.
This means that a customer has to check-in to a
store with their phone, but never has to take out
their wallet since PayPal completes all steps of the
transaction.
While this payment method will allow for a faster
turnaround and the promising incentive for loyalty
rewards and consumer data on the merchant side,
are customers open to shopping with Beacon tech?
A study conducted by Retale, a weekly shopping
circular and deals aggregator, shows that consumers
just aren’t ready.
Location tracking is one of the main benefits for
merchants that choose to enable BLE at their retail
locations.If your phone communicates to the beacon
that you’ve been standing at the LED-tv section for
a while, you may receive an offer on that product to
try to get you to purchase it.
71 percent of respondents do not want to be tracked
while they go about their shopping.
Only 29 percent are onboard with being tracked
through the store, but this number may increase if
location tracking is explicitly incentivized.
What about the deals and offers that promise
customer engagement and an increase in sales?
Half of iOS users do not want to be sent push
notifications for these incentives. Nearly 62 percent
of Android users feel the same.
These results show that consumers are clearly
concerned with privacy, and that push notifications
are seen as an annoyance, rather than a benefit.

8. 8
E M E R G I N G P A Y M E N T S
8
Card Solutions
KakaoTalk Prepares Money Transfer Service
By: Monique Zamir
T
he lure of the promising mobile payments
industry is expanding into social networking
companies as the popular Korean messaging
service KakaoTalk prepares to launch a small-sum
money transfer service in June (up to 100,000 won
or $97) in cooperation with local banks.
KakaoTalk has higher aspirations: one high-ranking
banking official commented, “Once security
problems are resolved so that payments and
transfers over 100,000 won are possible and local
banks expand the payment infrastructure via smart
phones, we will live in an era where all we need is a
smart phone when we leave home.”
While we’ve heard this near technotopian call for a
world of digital wallets before, the move to bring
globally popular social networking service (SNS)
companies into the burgeoning mobile payments
realm is a powerful move, bringing the vast swaths
of users to a simple, in-house mobile payments
system.
The potential is there, since KakaoTalk reports
having 100 million users.
KakaoTalk isn’t the only SNS company developing a
money transfer service.
Facebook is in the midst of preparing a money
transfer service in Europe. More specifically, the firm
seeks regulatory approval in Ireland for “e-money”
status,enabling it to issue digital credits convertible
into cash by its recipients.
Facebook has also just acquired the extremely
popular messaging service WhatsApp (for a hefty
$19 billion), and according to a conference call with
Mark Zuckerberg, Facebook isn’t looking to drive
revenue from the app, instead he said, they are
focusing on growth.
The potential for SNS services to influence and drive
mobile payments is enormous, when one considers
the fast ways social networks spread information
and gain users, combined with the convenience of
a money-transferring service included in a SNS app.

9. 9
M A R K E T P L A C E
9
Industry Leaders
Apple Stores Prepare For NFC Payments
By: Daniel Cross
A
pple has announced plans to accept NFC
payments in its stores very soon.
Employees at Apple will receive card readers
provided by VeriFone Systems that will allow them
to accept chip-and-PIN payments.
An installed NFC reader will let workers and
customers exchange information at the point of sale.
Apple products do not currently support NFC
capabilities and the new roll-out is unlikely to
change that. EasyPay is Apple’s signature mobile
payment application which takes EMV chip-and-PIN,
as well as mag-stripe payments.
Payments made from Apple gift cards that are loaded
into a customers iPhone or iPad are also accepted
thanks to an update to EasyPay in 2012.
Near Field Communication, the ability to send and
receive data by proximity alone, has been around for
a while but its application as a payment method is
relatively new.
The technology has already been implemented in
places like urban metro systems while mobile wallets
make it readily available to the public.
While iPhones do not support NFC right out of
the box, mobile wallet provider, Isis, adds NFC
capabilities to iPhones with its Incipio Cashwrap
sleeve.
Apple may be targeting a more elegant payment
system of their own through Bluetooth low energy
“iBeacons,” which have been enabled in their US
stores for push notifications and location tracking.
There hasn’t been any solid evidence whether or not
Apple will incorporate NFC,but whatever technology
they go with (or don’t go with) will have a profound
impact on mobile payments.
Image credit: Matt Buchanan

10. 10
M A R K E T P L A C E
10
O
nce the world’s innovator
and creator of the
internet, the U.S. has
fallen far behind both Europe and
Asia when it comes to accepting
and using financial technologies
and making banking more
efficient.
While checks are a thing of the
past in Scandinavia, Germany,
and East Asia, they remain the
standard way to send money
for millions of Americans. Even
if they’re slow, frustrating, and
susceptible to fraud, they remain
the default in the U.S.
While there are obvious benefits
to checks getting replaced with
a more efficient payment system,
the powers that be are slow to
change the status quo.
Electronic transfers still take days,
not seconds, to process, because
regulators worry about upgrading
the infrastructure that processes
inter-bank payments. As NPR
discovered, the payment system
currently in place dates back
to the 1970s, and there is little
motivation to upgrade it.
Unsaddled with old infrastructure
and more open to innovation and
progress, nations like Finland,
Sweden, and Germany offer
instantaneous transfers between
banks—and unlike wires in the
U.S., these transfers are free or
cost very little.
European nations have also
implemented EMV and chip-
and-pin standards that replaced
the old magnetic strip system
that’s still the order of the day in
America.
While the transition was not
seamless, it completed years ago
and all credit cards in the EU
come with an embedded chip that
makes fraud more difficult.
This leaves Europeans scratching
their heads at why the Americans
are a decade behind Europe,
and mobile payment usage will
likely to take even longer than
acclimating to new credit cards.
All of this means that mobile
payments will stay small in the
U.S., even if they are growing at
an incredible rate internationally.
Back in 2012, experts said we
could see mobile payments
reach scale by 2020, and since
that survey was released, mobile
payments have more than
doubled to over $25 billion.
While that sounds impressive,
e-commerce accounted for $364
billion in the U.S. and $1 trillion
worldwide in 2012. Since mobile
payments include bank transfers
as well as e-commerce, this means
mobile payments still account for
far less than 2.5% of total online
transactions.
Global & Local
Why Europe Will See Mobile Payments Success Before the U.S.
By: Michael Foster
Image credit: iZettle

11. 11
M A R K E T P L A C E
11
Global & Local
TheWorstCasesofInflationinHistory–CurrenciesDoublingOvernight
By: Hellen Wallis
I
magine sitting down for dinner
and before you finish the meal,
the price literally doubles.
In the United States there’s a
growing concern over the value of
the dollar; however, when looking
back at history, there have been
plenty of situations throughout
the world where the economy has
been far worse.
When hyperinflation occurs,
prices can change so rapidly that
money could be rendered useless
overnight. This has happened
before on many different
occasions throughout the last
century.
During the 20th century,
there were seventeen cases of
hyperinflation in Europe and
Central Asia.
While the United States was never
a victim, it came very close during
the Revolutionary and Civil War
when the government printed
more money to pay for them.
However, in both circumstances
inflation never exceeded 50
percent. While this is still a
significant increase,it’s nothing in
comparison to some of the world’s
worst cases.
Hungary 1946
During 1946, Hungary suffered
from the most horrifying inflation
in history. Prices literally doubled
every 15 hours, which resulted in
a 13.6 quadrillion (13, 600, 000,
000, 000, 000) percent increase
each month.
Despite efforts to stabilize the
currency after World War II, the
only measure to correct the issue
was to replace the currency into
the forint, which had a direct
conversion rate to gold and could
be measured against other world
currencies.
By the time the currency was
replaced in August 1946, the
total price of every Hungarian
bank note in circulation was one
thousandth of an American dollar.
Zimbabwe 2008
During November 2008, inflation
in Zimbabwe reached a high of
79 billion percent. Prices doubled
every 24.7 hours due to Mugabe’s
land-redistribution program.
Put into perspective, a loaf of
bread cost roughly 35 million
American dollars.
At the time, banks issued a $100
million bill; then a $200 million
dollar bill; and then capped
withdrawals at $500 million,
which was the equivalent to 25

12. 12
M A R K E T P L A C E
12
cents.
Eventually shops began to refuse
the official currency and accept
South African Rand and US Dollars.
When the Reserve Bank stepped
in to restructure the currency in
accordance with the US dollar, the
inflation came to an end.
Yugoslavia 1994
Between1993and1994Yugoslavia
suffered from an extreme case of
hyperinflation that reached an
all-time high during the month of
January when prices rose to 313
million percent during the month.
This was a 64.6 percent increase
per day. Throughout the whole
period, prices increased 5
quadrillion percent.
Eventually businesses began to
refuse the dinar and accept the
German Deutsche Mark.
During the following years
the Yugoslavian government
struggled to restructure the dinar
and had difficulties maintaining
the social structure of the country
over the residents’ refusal to pay
bills knowing that they would be
re-valued so rapidly.
Germany 1923
During October 1923,
hyperinflation reached 29,500
percent.
The German papiermark was
introduced in 1914 when the
country’s gold standard was
eliminated and started with an
exchange rate of 4.2 US dollars.
When the hyperinflation occurred
residents started to suffer from a
psychological condition known
as “Zero Stroke” – which is a dizzy
feeling caused by counting too
many zeros.
The government responded by
issuing a redenomination and
replaced the papiermark with the
rentenmark, which eventually
stabilized the currency.
According to Arnold Hill, inflation
is inevitable and you should look
to source a financial expert to
assist your business so you don’t
suffer. While you don’t need to
worry about hyperinflation on this
degree, making good financial
plans is certainly good practice.

13. 13
M A R K E T P L A C E
13
Global & Local
Underground Economy Goes Main Street – 5 Implications
By: Jane Genova
T
he U.S. “underground
economy” has gone
mainstream and has grown
to about $2 trillion annually.That’s
the number university researchers
Richard Cebula and Edgar L. Feige
calculated in their recent study of
unreported income.
Underground economy
participants now include regular
everyday people..
Gone are the days when it was
dominated by Tony Soprano types,
criminals, and illegal immigrants.
Currently, housewives, laid
off middle managers, college
students, trade school graduates,
lawyers and artists seem to feel no
moral ambivalence and little fear
about “working off the books.”
The reasons for this growing trend
are many. There is a shortage of
“real” jobs. The stigma attached
to not having traditional types of
employment went with the burst
of the housing bubble. All that
matters is income. Employers are
more willing to pay off the books
in order to duck regulations,
including Obamacare.TheInternet
makes it easy to operate a shadow
business and the implications are
huge.
Here are five.
Lost Taxes
Estimates, such as by Cebula
and Feige, are that the federal
government recently has missed
out on about $500 billion a year
in taxes. With that revenue,
visionaries might have been
able to be more innovative with
national tax policies. There is
also lost tax revenue to state and
local government. Those added
revenues could have prevented
increases in property taxes and
funded better public education.
Misleading Labor Statistics
Some economists keep saying
that X percentage of the labor
force has given up looking for a
job. The reality might be that they
are employed, only what they
are doing for income does not
show up in any official reporting
system – not an employer’s,
not their own tax return. The
actual unemployment rate might
be lower than the 6.3% the
Department of Labor reported for
April 2014.
Keeping Consumer Economy
Rolling
The U.S. GDP might be higher
and growing faster than what
government agencies have
calculated. What if that $2 trillion
Image credit: Alfred Payne

14. 14
M A R K E T P L A C E
14
of the underground economy had
been factored in?
There is speculation that this
underground cash floating
around had been what kept the
struggling consumer economy
from collapsing during The Great
Recession. It also could be why
supposed jobless Millennials can
purchase brand name clothes and
mobile gadgets.As digital natives,
there are myriad of paid tasks they
can do in an online economy.
In addition, cash gets freed up
because it is often less expensive
to hire a housecleaner off the
books for example, than a
franchise service which operates
on the books. Since the service
is so affordable, it might be used
more often than a traditional
cleaner, and it drives more cash
into the economy.
Another Explanation for the
Unbanked
The high number of unbanked in
the U.S. might not be primarily
a result of perceived excessive
fees, the inability to qualify for
a checking account or distrust
of the system. According to a
2011 FDIC survey, 8.2% or 1 in 12
households are unbanked.
Rather, those working
underground are reluctant
to become part of a financial
entity in which funds are easily
monitored by any number of
government entities. Moreover,
they might simultaneously be
receiving entitlements such as
welfare and food stamps. Funds in
a checking account could attract
the attention of those searching
for cases of fraud.
Not Paying into Social Security,
Exploited
Some might shrug off concerns
that underground workers are
not paying into Social Security
and therefore will not be able to
collect much or anything when
they get older. After all, there is
speculation that the system won’t
hold up and “investing” in it is a
fool’s dream.
However, society is already
witnessing the plight of the
aging who receive a low-amount
Social Security check monthly.
Interestingly some of them are
being forced into the underground
economy, especially as service
workers walking dogs,care-taking
the disabled and running errands.
In addition, because the
underground economy is
unregulated, workers can be
exploited. They could receive
low wages, no benefits and be
exposed to environmental and
safety threats.
A boom in job creation could
suck the life out of it. Current
workers would probably trade
off paying taxes in exchange for
benefits including Social Security
and a healthy, safe workplace.
There could be a crackdown
by government. Stiff penalties,
ranging from fines to prison for
employers and employees, could
drive both into conforming with
the traditional economy.
With the shrinkage of the
underground economy, statistics
about everything from tax
revenues to GDP could change
significantly, while more cash can
move through traditional banking
and financial services.

15. I N D U S T R Y V O I C E S
15
Interviews
Exclusive Q&A with Payoneer’s Scott Galit: Global Payments for All
By: Kevin Xu
S
cott Galit, CEO at Payoneer, tells us what it’s
like to build a global network, working with
Airbnb and MasterCard, and the need for new
players in payments.
Let’s start with a quick breakdown on Payoneer.
We have a variety of different ways that we enable
professionals and small business owners all over
the world, in 200 countries, to receive payment for
cross-border sales. And so, to businesses, or through
businesses, we deliver payments into bank accounts
in well over 200 countries, we support dozens of
currencies; we connect them to wallets.
We have a whole variety of ways that we move money
around the world, and use all those tools to connect
buyers and sellers of products and services together.
We do have a strong presence in the emerging world.
Our brand has become quite significant. You know,
we are top thousand Alexa rating of all websites,
one of the top thousand most trafficked websites in
the world. And we have a top hundred presence in a
number of emerging market countries.
Yet, it’s become a pretty significant driver of growth
for us and it’s a really, really exciting part of what
we do. We really feel like we’re empowering global
commerce by enabling professionals and small
business owners around the world to participate
in the global economy in ways that they couldn’t
before we existed. So we think that’s really exciting.
Your company has certainly grown a lot during
the years. One thing that interested me was that
Payoneer reported an increase in VC funding for
startups. Can you tell me a little bit about your
relationship building business with startups? One
like Airbnb that really excites me, that is pretty
huge, I think.

16. I N D U S T R Y V O I C E S
16
Yeah, I mean, look, part of what’s so exciting about
our business – again, we get to see both sides of
activity. We get to see technology and Internet
companies that are disrupting the global economy
by creating new ways for commerce to occur, and
then we have professionals and small business
owners all over the world that are taking advantage
of those platforms to be able to earn and sell in
new ways and new places, than ever before.
So a company like Airbnb is obviously a really
exciting company that is creating disruption in the
hospitality industry, with a tremendous amount of
momentum, scale, and a vision for where they’re
going. By nature of their business, it becomes global
almost instantly. So what that does is it creates
kind of an ecosystem that allows entrepreneurs and
businesses and professionals from anywhere in the
world to participate. The complexity of managing
payments across a variety of sizes or a variety
of different preferences, and obviously, a huge
geographic scope is really, really challenging.
And so, we started to work with them, in that case,
the heart of the relationship with them is an Airbnb
branded MasterCard. Both Airbnb and Payoneer are
available to host in many places around the world,
that they can withdraw their earnings from Airbnb
and we will deliver it to them. We make it available.
They can also still withdraw their funds into a bank
account, so that is a really important aspect of what
we’re doing, as well.And there are some other things
that we’re working on with them, too.
Would you say that, if startups choose to work with
you, they would gain access and leverage the global
payment network? It makes things a lot simpler
right?
Absolutely. We can be a one-stop shop. It is not even
just payments. We truly have built best in class anti-
money laundering and compliance infrastructure,
which,for anyof these global businesses is incredibly
complicated to deal with.
We also provide a tremendous amount of value.
Our risk team is top notch and we have a very, very
expensive interaction – you know, again, one of the
challenges, as much friction as we are able to reduce
through the Internet, you don’t only get the good
guys, right? So, the fact is that there are people who
are looking to capitalize on these platforms for bad
purposes, and we bring a tremendous amount of
expertise to the table and because we see so much
activity coming from so many different places, we
often will flag activity and transactions for our
customers and partners, that they are able to now
better manage their business. So there are many,
many different things that we do.
But absolutely, you know, someone can come to
us, plug in one data flow, one money flow, and we
can enable them to make sure that people receiving
payments for them in any country, basically, other
than OFAC blocked countries around the world can
receive payments in a variety of different ways.
Speaking about compliance, how difficult is it to
adhere to KYC and AML laws globally?
It is a very, very challenging proposition. Truly –
outside of our call center, we actually have a larger
compliance and compliance operations team than
we do technology department. So, to give an idea
of just how significant an investment it is – it is very
hard to do well.
And something that we really take great pride in.
And we’re investing many, many millions of dollars
a year, invested in that. And at this point, because
we have seen so many customers sign up in so many
places around the world, we also have a bigger

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database and more experience than anybody else
has, by a lot.
So, we also understand. So, yeah, it’s a huge
investment. It’s not just the know your customer
structures, but regulatory infrastructure, so, we’re
regulated in both the U.S. in Europe where we own
electronic money institutions, and, again, these are
all multimillion dollar investments, you know, we
get audited by states, we have third-party auditors
that come in and test our compliance program on a
quarterly basis, and we have an extensive one on an
annual basis. We have so many audits and reviews
and things like that by third parties – it’s just kind of
a regular part of who we are and what we do.
What’s it like working with MasterCard? How’s the
relationship?
We’ve got a terrific relationship with MasterCard,
a very, very good relationship. We and MasterCard
share a lot of common interests. We are both about
empowering small business owners. We are both
about empowering professionals and small business
owners from emerging economies, we’re both about
cross-border trade and commercial activity, we’re
both about facilitating and empowering global
commerce and e-commerce, so, really, we see the
world in many similar ways.
Overall, they’ve been a very good partner to us,
and we think we have been a very, very good
partner to them, and we have a very good working
relationship with them. But we work with, again, we
send payments through Swift which obviously is
very different than MasterCard, it’s another network.
We deliver payments through local ESP systems, we
deliver payments through proprietary networks, so
there’s a whole bunch of different things that we do.
MasterCard is absolutely a really important part of
our overall value proposition.
How do you capture the freelancers? The small
businesses? What is your proposition to them, how
do you engage them in signing up?
Well, what is the most exciting thing about our
business, and I talked earlier about our brand,
you know, we get literally tens of thousands of
applications a month that come to us.So,our number
one source of customers is other customers. We get
a lot, in the freelance space, a lot of customers that
come through a network of partners that we have
signed up. And there really is very much a network
effect.
You know, Elance, oDesk, freelancer.com, 99designs,
I could kind of keep going on and on, and we have
hundreds of freelance businesses that have included
us as a way that their payees can get paid and where
folks can sign up through links on their site to us,
can sign up for Payoneer. So, that’s more of a broad
distributed network of customers. The reason why
they do want it is, we give them the whole network,
too. There is kind of the global interoperability from
the collection side. We give them other tools, if they
need to get paid by a third party that wasn’t part
of the Payoneer network, we give them tools to get
paid by credit card or other things like that that they
can use.
So, we give them the ability to get a U.S. bank
account, a European bank account, or they can
get USD and euro payments, so they can invoice
if they have local bank accounts in those markets.
And then we give them access to a major currency
debit card with MasterCard, if they want to buy
advertising, or things like that online, to continue to
grow their business, they can do that. If they want to
use the MasterCard to buy things at a local market,
or withdraw funds at an ATM, or in their local bank
account.
Then, we partner with companies. In the last couple

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of months, we hosted meet ups in half a dozen
markets around the world. We did partnerships
and programs in Dhaka, Bangladesh, Cairo, Buenos
Aires, Manila, Islamabad, hundreds of people at
each event, focusing on educating freelancers on
how they can actually earn money through global
marketplaces, how they can actually use Payoneer to
get paid. Very, very successful. Then we end up with
thousands of new customers, coming out of those.
So, again, it is a super exciting place to be, where we
can engage all over the world with professionals and
business owners to help them, connect them, and
earn money in ways that they never could in their
domestic economy.
Would you say it is difficult to find a balance
between signing up, let’s say, freelancers, and
your hot startup of the week or just balancing
your efforts in trying to sign up smaller and larger
businesses?
You know what, they are synergistic. We recognize
it is a complex business and we very much cultivate
both sides. We invest in our sales team that goes out
and finds us new companies and startups. Although,
I would say, at least half of our new customers that
are sending payments around the world are coming
to us, rather than us having even gone to them. It’s
a virtuous cycle. You know, it’s not just freelancers,
by a long shot.
I mean, the fastest-growing part of our business
right now is manufacturers and merchants that are
selling on e-commerce platforms around the world.
They are using us to collect payments. Freelance
is still growing very quickly, but we have growth
coming from all over. So, absolutely. The more the
customers that we have around the world that sign
up with Payoneer, they pick up the phone or, more
likely, they send messages to the communities on
message boards or inquiries in to the company
that they’re getting paid by, asking them to use us,
the more we give them tools that they can collect
payments from businesses in the U.S. without those
businesses needing to work with Payoneer.
We’re then able to go back to a business and say to
them, “Hey, guys, I don’t know if you realize, that
you sent $100,000 last month of payments through
Payoneer to 500 recipients, in 48 countries around
the world. We would like to talk about a way to
integrate, give you guys access to all the great tools
and capabilities and help you significantly ramp that
and do a better job with your global business.” And
so, it really does work hand-in-hand, that both parts
are really important as we continue to build the
Payoneer brand and Payoneer network.
What are your plans for 2014? Where do you see
Payoneer going?
I think we are sitting in one of the most exciting parts
of the payments world and even global commerce.
And we’ve got a big vision. Ultimately, you know,
we can enable money to move around the world
instantly. And so, we put together thousands of
senders and millions of recipients that are connected
together in a way that allows us to provide a lot of
unique value to customers on both sides. So, we
had an announcement recently with Google. We had
some other pretty exciting, meaningful things.
We started to roll out from large-scale companies
and large-scale vendors. We had a huge ramp in
engagement – with the small business owners
around the world receiving payments. And we’ve
got a very rapid expansion of our products as well.
When we started this year, we didn’t have euro bank
accounts that we offered. Now we do, and that is now
growing, you know, pretty much 50%-100%, month
over month. It’s still early, but it is growing very

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quickly, much the way the U.S. account offering did.
We have lots of new collection methods, lots of new
payout capabilities. Lots of new countries where we
are establishing relationships. We just established a
relationship with a new partner in Korea to enable
payments in Korea. A huge amount of activity with
new infrastructure partners in China. We have new
infrastructure we’re putting in place in Japan.
We just brought on a community manager for
Vietnam. There is so much momentum in so many
different directions, and we talked about, we just
had a press release about Lazaro Campos joining our
advisory board, and he was the CEO of Swift, and
he shares our vision that, you know, there are better
ways in this technology-driven world that we’re in
now, that the payment infrastructure hasn’t really
changed at the pace that business has. And that
there are new opportunities and ways to get things
better, and so, we are super excited. I mean, this is a
huge year for us.
I see similarities on what you’re building and the
bitcoin protocol. One of their main selling points
is that they are trying to build a global payment
method. It seems that what you are doing is what
they have the capability of doing, except you’re
compliant. Do you have any plans to accept Bitcoin?
What are your opinions on it?
First of all, I appreciate – I think it is really, really
insightful, what you just said about what we’re doing
versus what they’re talking about the ability to do,
because, you know, in general, we feel we already
have the ability to do much of what they aspire to,
and do it in a compliant way. My point of view of
Bitcoin, you know, I would say, it’s interesting. It is
fascinating to watch all of the press, all of the media
attention, all of the ups and downs, and at this
point, you know, I will say we’re not – have no plans
to accept Bitcoin, no plans to work with Bitcoin.
We certainly pay attention to it. From our point of
view, we feel really, really excited about, in some
respects, them highlighting some of the problems
that we believe we’re solving.And we have made a lot
of difficult investments,and we thinkwe have already
started to build some of the scale and transaction
activity needed, through more mainstream activity
that we think puts us in a tremendous position to
continue to grow.
It’s a huge, gigantic market. We’re confident that,
at the end of the day, businesses, professionals,
corporates are going to need money in a real
currency. Regardless of what else goes on, we feel
really, really good about where we are. At the end
of the day, again, I really appreciate what you said,
and the insight. I think you’re right on. And we feel
very good about where we are and we don’t have
any current plans with Bitcoin.
Any last comments?
We have kind of a basic thesis on the world, which
is that the entire business world is permanently
changed, forever.And businesses of all sizes, all over
the world, are connecting with new types of business
partners in new types of ways than they ever have.
Which means there are new types of payments, I’m
sure you’re seeing this all over, that create a whole
lot of disruption from the business perspective.
And we try to work business back. We say, “What do
we need to do to enable businesses to operate in the
way they want to?”
Using technology, using compliance, and using
infrastructure to help make that happen. We believe
there’s a last mile for money, which is controlled by
regulators and financial institutions, and we don’t
really think that is going to change.

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But we think that, you know, there is really a need
for new players that fit between that last mile and
the way businesses are trying to operate today. So,
again, we’re super excited about being one of the
bridge builders that helps kind of bridge that gap,
which we think is a growing gap, and we’re just
super excited about the business, I have to say.
An unbelievably huge market with a tremendous
amount of disruption happening, we think we
are one of the players that’s really, really well-
positioned.
Scott Galit, CEO, Payoneer
Scott Galit is the CEO and a Director of Payoneer Inc. As Global Head
of Prepaid for MasterCard, Scott developed MasterCard’s global prepaid
strategy and oversaw its global prepaid business. Scott was the founder
and CEO of Solspark; SVP/General Manager of First Data Prepaid and EVP
at Meta Payment Systems. Earlier in his career he was an investment
banker at Donaldson, Lufkin & Jenrette. Scott was also a founding board
member of the NBPCA.