explore partnership with Payoneer

[chadwhitacre]

Reticketed from #126. Payoneer solves international payouts with prepaid cards. Some concern about legality in India (and elsewhere?). What's the API like for payouts?

I contacted sales and have heard back.

[chadwhitacre]

Requested a phone call.

[chadwhitacre]

Call scheduled for tomorrow morning.

[chadwhitacre]

Okay, had a sales call with a Payoneer rep. They offer pre-paid cards as well as global bank transfers. We would fill out their due diligence paperwork (would need to write ToS first, #344) and they would set up an account for us within a week or so, assuming we're approved. We get a sandbox and a dashboard at that time.

Payoneer is not very open:

• Their API documentation is a PDF with a big fat "Confidentiality" clause at the beginning of it.
• Their pricing is confidential as well.

Here's what I think it would cost Gittip users to use Payoneer:

Pre-paid Card

Setup Charges

• $25 for a plastic card shipped to high-risk countries: Albania, Angola, Belarus, Bosnia Herzegovina, Côte D’Ivoire, Congo, Ecuador, Ethiopia, Iraq, Kosovo, Lebanon, Liberia, Macedonia, Montenegro, Pakistan, São Tomé & Príncipe, Serbia, Somalia, Turkmenistan, Zimbabwe.
• $13 for a plastic card shipped elsewhere.
• $4 for a virtual card (anywhere?).

No cards shipped to OFAC countries(?).

Monthly Charges

• $3/month, if fewer than 4 transactions per month.
• $1/month, if 4 or more transactions per month.

Charges to Load Funds

• $2 - up to 2 days to receive funds
• $5 - up to 2 hours to receive funds

ATM Withdrawal Charge

• $3.15 per withdrawal.

Global Bank Transfer

• $2.99 - $9.95 per transfer
• For international SWIFT payments (?) there will be an additional 1% fee with a $10 cap for payments.

For comparison, here are the fee structures of two competitors:

• https://www.entropay.com/popups/terms.schedule.php
• https://www.paxum.com/payment/fees.php?view=views/fees.xsl

I did confirm with the Payoneer rep that pre-paid cards are illegal in India. Her answer was global bank transfers. Afaict Paxum doesn't offer this, though EntroPay (bad first impression) might. I don't think EntroPay has an API; I've asked and will update here if/when they answer.

[chadwhitacre]

Questions:

• What exactly are the OFAC countries? There's overlap with AML. Where will Payoneer not do business at all?
• Are virtual cards restricted by country?
• What's a SWIFT payment and when does that kick in?
• Who pays what when? The API doc shows the money flow in general but doesn't show where fees hit.
• Are the "transactions" referred to in the monthly charges debit card charges? And/or loadings?

[chadwhitacre]

I don't like how complicated the fee structure is for the pre-paid cards. When I click "Sign Up!" on Payoneer's website I see a different fee structure:

There we've got an annual maintenance fee, as well as balance inquiries and declined transaction ATM fees. The monthly charge and the charges to load funds are absent. And the asterisk is significant:

When a transaction is made as a foreign transaction or is requested in a currency other than USD, charges of up to 3% may be assessed above all charges assessed by MasterCard for the transaction."

[chadwhitacre]

Maybe we should just use Payoneer for global bank transfers and not mess with the pre-paid cards for now?

[chadwhitacre]

You would think that "foreign" meant outside of the US, but, since this bank is located in Belize, ALL US TRANSACTIONS ARE FOREIGN.

http://community.payoneer.com/topic/2111-scammed/

[chadwhitacre]

Pricing numbers here, here, here, and here are in the same ball park as above. The first two indicate that fees are taken out when money is loaded on a card. This review indicates that "the max amount you can receive from a single credit card payment is $1000" and confirms that "you can pay the activation fee with the payments that you have received through your account," and this review that "your national identification document is all it wants."

[chadwhitacre]

While I'm not a huge fan of affiliate marketing nor military intrigue, Payoneer is the best option I've seen yet for international payouts.

[chadwhitacre]

The API is XML and querystrings over HTTPS.

[chadwhitacre]

So the experience for Gittip users here would be that they fill out some combination of forms on Gittip.com and on Payoneer.com, and then direct their payouts to their Payoneer card or global bank account. Then we would do payouts to them as part of payday, but with a higher threshold than for US bank accounts, eh? Maybe a $100 minimum instead of $10?

[Nissim-Payoneer]

Hi! My name is Nissim, I'm a Community Manager at Payoneer. I spoke with Mollie from our sales team, who had a chat with you earlier, and I'm happy to hear that you're looking in to our service as a possible solution for Gittip users (I hope it's OK that I'm posting here).

I'm really happy to see that you're sharing your experience and ideas with the community. At Payoneer we also strongly believe in being as clear and straightforward as possible, as it greatly improves the user experience.

As you noticed, Payoneer works with thousands of companies. We offer each one the opportunity to customize the services that they offer their users, in order to provide an overall service specific to their needs and requirements. This also includes pricing, which means that the pricing setup may not be the same for all partners of ours. For this reason we do not have an official pricing list on our main website, as it would cause confusion.

Pricing is not confidential in any way, and we're more than happy to answer any questions when asked. In fact, many of our partners provide official links to pages with pricing specific to their members, so that everyone can clearly see exactly what costs are involved.

I wanted to quickly touch on some of your questions:

• OFAC is the US Office of Foreign Assets Control. There are some countries that they specifically prohibit US companies from doing business with (it's a very short list). Payoneer is a fully regulated US company, and is required to strictly adhere to these regulations. More info available here: http://www.treasury.gov/resource-center/sanctions/Pages/default.aspx
• Virtual cards have the same restrictions/rules as the physical card, simply there is no actual physical card issued. So the cardholder would receive all details related to the card, in order to make online purchases, but simply won't have a physical card to use at the ATM/in stores.
• SWIFT is a form of international bank transfer (wire transfer). Payoneer provides two types of global bank transfer solutions: SWIFT and Local. A local transfer means that we actually send the payment to the end user from a local bank in their country, in their local currency. We support this to over 50 countries. A SWIFT transfer would be a standard international wire transfer, for countries in which we do not support local transfers. We support the remaining countries (roughly 150+) via SWIFT. Overall we support services to 200+ countries
• Generally payment fees are paid by the Payoneer account holder (the person getting paid). For bank transfers, it's deducted from the payment amount. For the Payoneer card, we deduct it from payments loaded to the card. We will not charge account holders any fees until they receive a payment. That being said, you have the option of customizing your pricing; so you can choose to have the fees paid by you (and then you can determine pricing on your end before you send the payment), or you can have it paid partly by you, and partly by the user.
• "Transactions" used to determine the monthly charge refers to card usage. This would include any purchase online/in stores, or cash withdrawals.

I apologize if I said too much, but as I said, we also believe in providing as much information as possible, so that you (the potential partner) and your users can make the best decision for your payment needs. Hopefully you will find that Payoneer is a good fit for you, and we'll certainly do what we can to convince you of that :)

[chadwhitacre]

@Nissim-Payoneer Thanks so much for chiming in here! I've noticed you on other forums as I've been researching Payoneer, and I'm very happy to have you join the conversation here. :-)

Thanks for the detailed answers to my questions. Ball is in my court to submit the due diligence form and I look forward to proceeding from there.

Anyone else have questions for @Nissim-Payoneer?

[chadwhitacre]

@Nissim-Payoneer I'm primarily interested in global bank transfers. What does the workflow look like for that? Do my users have to visit Payoneer.com to enter their bank account details?

[Nissim-Payoneer]

It's actually a very simple flow. You will be able to provide your users with a sign up link, and it will bring them to a page like the one in this example: http://blog.payoneer.com/lower-fees-for-payoneers-global-bank-transfer-gbt-service/

They will need to complete a one-time setup (which includes providing personal details and bank information) and then they will be able to begin receiving payments.

The payments will be processed automatically - so when you send them to each user, we'll automatically transfer them to each user's bank account (as set up during the original registration).

The link above shows examples of each step of the process.

Hope that helps!

[chadwhitacre]

Thanks @Nissim-Payoneer! Two more questions. :)

First, on another post I'm seeing this comment on pricing:

Please note that while Payoneer only charges the flat fee of $5.95 or $9.95 depending on your country, your local bank may also charge you a fee.

Does this pertain to local bank transfers or SWIFT or both? What sorts of fees have you been seeing here? (This is one area where Trans-Pay has offered that they guarantee the single fixed price per transaction, with no additional hidden fees.)

Second, what's the risk situation? It sounds like Payoneer accepts at least some responsibility for underwriting payees, yes? What's the recourse for recovering money once deposited if it's deemed fraudulent? What would Gittip's liability be in that case? Payoneer's?

[Nissim-Payoneer]

This was an older blog post, but we have since lowered the fees for local transfers from $5.95 to $2.99. There is a set fee per transfer, which is clearly defined, but it does depend on the country (it would be clearly listed during the sign up process).

Here's how it works:

Our "Global Bank Transfer Service" offers bank transfers to over 200 countries. Within that service are 3 transfer methods:

• US ACH
• Local Bank Transfers
• SWIFT Transfers (wires)

Local Bank Transfer means that we'll actually send the funds from a local bank in the user's country, in their local currency. This is a very quick, low cost, and efficient method of sending their funds, with the cost per payment being $2.99 (with the exception of a couple of countries). This service is available to about 55 countries.

SWIFT is a standard international wire transfer, and is available to the remaining countries that we support (we support about 200 countries overall). For these countries, the cost per payment is $9.95.

There are no "hidden fees" - during the sign up process, as soon as the user selects their country they will be able to see the exact cost of receiving a payment.

In regards to risk, are you referring to users that somehow violate the terms and conditions for your site/service, or payments sent to the wrong account? It would really depend on the case and what you deem fraudulent. With bank transfers there can be some issue, as once funds are sent there is a deadline before which they can be recalled, but if you can explain further I'll be happy to provide what information I can (or check with our payment department to confirm further).

[chadwhitacre]

[A]s soon as the user selects their country they will be able to see the exact cost of receiving a payment.

Okay, but is it true that "your local bank may also charge you a fee?"

In regards to risk, [...]

Yes, see here for details on a case where people were pumping stolen money into Gittip, which then was paid out to both fraudulent bank accounts as well as innocent bystanders. If/when that happens again, can Gittip pull that money back from the bank accounts to cover the refunds Gittip has to make to the stolen credit cards?

[chadwhitacre]

Also, what's the pricing on US ACH?

[Nissim-Payoneer]

For local bank transfers, there is generally no fee imposed by the receiving bank. Every bank around the world has different policies for wire transfers, however. Some banks do charge a landing fee for international transfers. Also some require the transfers to be made through intermediate banks, which apply fees along the way. This would be the same for anyone sending International wire transfers (not just Payoneer) and we have no control over that.

US ACH is generally set up as:

• One-time set up fee for the account of $5.00
• $3.00 per payment

Regarding the fraud issue - it depends on how quickly Payoneer is informed, and the status of the bank transfer. If it's already been sent and received by the end-user, we may have no dispute right. If it's caught quickly enough, there may be time to recall the payment.

One thing we do suggest if this is a major issue you are facing is to apply a payment schedule or waiting period before a payout. For example, any funds received/accumulated would be paid out only after a certain amount of time. This gives you time for any fraud/stolen card details to be reported and identified.

[chadwhitacre]

One-time set up fee for the account of $5.00

Is there a one-time setup fee for Local and SWIFT?

[Nissim-Payoneer]

No, there is no setup fee for local bank transfers and SWIFT. Also, for all bank transfer services there is no maintenance/time based account fee.

[chadwhitacre]

Cool, thanks for the quick replies, @Nissim-Payoneer. FYI, I'm tracking Gittip's decision over here, but, if you would, let's keep our conversation regarding Payoneer in this thread.

[Nissim-Payoneer]

Will do.

[chadwhitacre]

It'd be great if this page also gave info re: ACH, Local, SWIFT:

http://www.payoneer.com/localBankTransfer-Avail.aspx

As it stands it looks like all three methods are folded together (I count 212 countries and 29 currencies in that table).

[Nissim-Payoneer]

Will let our payments department know about adding US ACH to that list, thanks for the feedback.

[chadwhitacre]

Well, I was more thinking it'd be helpful to see which of those 212 countries were Local and which SWIFT, and which of the Local were $2.99 and which were $5.95.

[Nissim-Payoneer]

If you send an e-mail request over to Mollie (or the specific Payoneer representative handling your partner request), she'll be able to provide you with a full list of countries and the bank transfer option available to them (local or SWIFT).

I'll also ask her to send it to you.

[chadwhitacre]

Thanks @Nissim-Payoneer. If it were public on your site, I could send my users there to get a sense of whether this will satisfy my user base. :)

[chadwhitacre]

Okay @Nissim-Payoneer, I've emailed Mollie.

[Nissim-Payoneer]

Thanks. Let me know if you haven't received a reply yet.

I noticed on the other thread you are discussing alternative services. I generally try to avoid discussing specifics of alternative services. I'm completely familiar with Payoneer and the services we provide. I can confidently discuss our service and how it will affect your site/company. I am not familiar with all alternative services (and really know very little at all about the specifics of the one you mentioned), so I really can't make any comments about it (or verify any of the claims made).

Regarding processing times for Payoneer payments:

Payoneer card - can be funded within minutes
Local bank transfers - Available within 1-2 business days
SWIFT - Available within 1-7 business days (depending on the end user's local banking network)

[chadwhitacre]

@Nissim-Payoneer: Can you help me with the math on fx? Let's say someone in Germany is due $100.00, and they'd like it converted to the euro before being deposited using the local bank option. XE has USD/EUR at 0.76640 at the moment. Does the per-transaction fee come out before the conversion? Assuming so, and assuming a 3.09 fee (2.99 Payoneer fee + 0.10 Gittip fee), now we have $96.91 due. Payoneer's fx fee is "2% over midmarket," which I'm reading as ... ? What? 0.98 * 0.76640 = 0.75107? That would result in a €72.79 deposit, instead of €74.27 at the mid rate, so the fx fee would be €1.48, which at the same mid rate would be $1.93.

Do I have this right?

[Nissim-Payoneer]

Yes, the conversion is applied after the transfer fee is taken. So a $100 payment would be $96.91, after the $2.99 (Payoneer) and $0.10 (Gittip) charges. $96.91 is then converted to whatever currency the user has selected.

The math you did is correct.

[chadwhitacre]

@Nissim-Payoneer After a phone call with Trans-Pay, it looks like Gittip is going to be moving forward with Payoneer! Congratulations, and thanks for all of your engagement on this thread and elsewhere. I'm very much looking forward to working together. :-)

[weblance2]

I am tying to get ahold of Nissim regarding his post on gituhb. I am going to start thread about how sales does not respond to me. I have sent 2 email request and 2 phone request but no one seems to contact me back.