Yet Indian small businesses have historically struggled with cross-border payments. Traditional methods relying heavily on correspondent banking relationships pose challenges such as slow and costly transactions coupled with the burden of hidden charges and limited currency options, including risks and infrastructure to comply with diverse regulatory frameworks of global markets, l acting as barriers to business expansion. To thrive in the global marketplace, Small- and Medium-sized Businesses (SMBs) need cost-effective, efficient, and secure cross-border payment solutions. By embracing platforms that offer flexibility, transparent costs, and enhanced customer experience, businesses can overcome these hurdles and propel India towards achieving its ambitious export targets.
One such leading cross-border payment platform is Payoneer.
In an exclusive conversation with EconomicTimes.com, Gaurav Shisodia, Vice President, Payoneer-India delved deeper into how Payoneer’s solutions to empower Small- and Medium-sized Businesses (SMBs), the company’s trajectory of growth, and its competitive edge in revolutionizing cross-border transactions, offering a glimpse into the transformative potential of global disruption and domination for Indian SMBs.
EconomicTimes.com: Could you paint a picture of the cross-border payments industry—its current size and the key trends? What are the major pain points faced by businesses?
The digital revolution has transformed global trade, dissolved traditional barriers, and made cross-border commerce accessible to businesses of all sizes and individuals worldwide.
This has resulted in increased access to global demand, further fuelling the growth of the digital economy. The global cross-border business payments market represents an astounding $6 trillion opportunity, offering a gateway to connect over 80 million underserved SMBs to a thriving global economy, according to data from Payoneer Investor Day 2023.
Driving this growth is the accessibility of global marketplaces, the rise of remote workforces, evolving customer preferences, and changing expectations for seamless and real-time international payments alongside the ease of conducting business across borders.
Yet, businesses and individuals continue to face challenges in global payments, including the complexity of regulations, higher fees within exchange rates, lack of transparency in the payment process, and slow settlement times hindering cash flow. These challenges have historically limited businesses and individuals while expanding in international markets.
The digital transformation has increased the need for fast, safe, and secure cross-border payment options.
EconomicTimes.com: What is Payoneer and how does its offering fit into this landscape?
We are a cross-border payment solution. We enable entrepreneurs, founders, and decision-makers of businesses to receive payments across the world as if they do business locally.
We support up to 11 of the world’s most traded currencies for customers in 190+ countries and territories empowering entrepreneurs, founders, and decision-makers to effortlessly get paid, manage, and expand their international businesses since our inception in 2005.
With a Payoneer account, businesses can accept payments from customers, vendors, and marketplaces in multiple currencies across borders, such that they can do business “locally” in international markets regardless of their geographical location.
We focus on ease, speed, safety, and convenience through our secure platform with competitive FX rates, supporting SMBs to optimize their business operations and cash flow. Plus, auto withdrawal of funds from a Payoneer Account to local bank accounts is convenient and cost-effective, giving customers flexibility in accessing their funds.
EconomicTimes.com: Banks have long been the trusted choice for businesses handling cross-border payments. What sets Payoneer apart from traditional banks?
Banks have traditionally been the primary choice for businesses handling global business-to-business (B2B) transactions. However, setting up overseas bank accounts can be complex, particularly in locations that require a local operating entity. High payment rejection rates and extended timelines also pose a challenge for businesses.
This is especially difficult for small and medium-sized businesses as they may not have local operations in every desired market. Additionally, bank transfers often lack transparency due to the involvement of multiple banks in fund movements, and they can be slow and expensive for businesses with smaller transaction volumes.
Payoneer enables businesses to accept payments with ease with our local receiving accounts, transparent fees, and user-friendly dashboard, allowing businesses to track and monitor all transactions conveniently. We have a robust localised presence characterised by our on-ground teams operating in multiple countries. Our customer support teams, who speak 42 languages, assist customers with quick resolutions to queries, enhancing the overall customer experience.
EconomicTimes.com: Who is Payoneer’s core target audience? What key markets does it focus on, and what are its global growth strategy and statistics?
Since its inception, Payoneer has focused on providing secure, fast, and convenient cross-border payment solutions, catering to a diverse set of customers that includes service export companies in domains of technology and programming, software-as-a-service (SaaS) companies, digital marketing agencies, sales, along with e-commerce exporters, and marketplace sellers, and freelancers to name a few.
In 2023, Payoneer delivered $831 million in revenue, representing 32% revenue growth year-over-year—marking three consecutive years of 30%+ revenue growth since going public in 2021.
*As of December 31, 2023, Payoneer had approximately 2 million total active customers and 516K customers who meet our ideal customer profile, or ICPs. (Active ICPs are defined as customers with a Payoneer Account that have on average over $500 a month in volume and were active over the trailing twelve-month period.) High levels of customer trust are evidenced by $6.4 billion of customer funds as of December 2023, up 9% year-over-year.
*(All data based on Payoneer Q4 and the Annual Earnings Report released as of December 31, 2023.)
Our growth strategy includes taking a localised and customer-centric approach. We focus on customer acquisition and retention to build a strong base of businesses that fits our ideal customer profiles (ICPs) across our primary regional markets: APAC, EMEA China, LATAM, and North America.
Our customer-centric approach supports the growth of businesses on our platform by enhancing product features and offerings to cater to evolving customer needs and provide access to industry thought leaders, global marketplaces, ecosystem partners, and domain experts. Our global flagship events, such as Payoneer Elevate and the Payoneer Connect, create impactful knowledge-sharing and networking sessions.
These engagement-focused events bring together businesses, partners, and experts under one roof, fostering valuable connections and empowering our customers with growth insights to expand their reach in the global economy.
EconomicTimes.com. How does India fit into Payoneer’s market strategy, and how does Payoneer support businesses in India?
India’s recent export milestones have set a new benchmark, with record-breaking figures achieved in both merchandise and services categories. Surpassing all previous records, India exported a total value of $776 billion in the fiscal year 2022-23, marking a significant leap from the export levels observed in 2013-14. Notably, merchandise exports accounted for the lion’s share, reaching nearly $450 billion, while services also made substantial contributions, totaling around $326 billion, per data shared by the Ministry of Government and Broadcasting.
India’s journey in the global service sector export market showcases remarkable growth and innovation. Starting modestly in the 1950s with minimal service exports, India saw a significant boost with the rise of IT companies in the 1970s, initiating outsourcing from the USA, Canada, and Europe. According to the Ministry of Government and Broadcasting, from 1995 to 2008, India’s share of the global service export market soared from 0.6% to 2.7%
The country holds a strategic position for Payoneer as a priority country, primarily catering to outsourcing and service export businesses. The service export market in India is experiencing rapid expansion, and Payoneer is optimistic and believes that it is well-positioned to help fuel this growth and strategically respond to the strong surge in businesses in the domains of tech and programming, SaaS, digital marketing, and sales, e-commerce exporters, and marketplace sellers’ sectors in India.
**Payoneer India has witnessed an impressive compounded annual growth rate (CAGR) of 54% from 2016 through the end of 2023.
Service export businesses on our platform have seen outstanding growth, with volume and revenue witnessing CAGRs of 85% and 88% since 2016, respectively, as of December 31, 2023.
The average revenue per user (ARPU) in India service exports has increased by 22% on our platform [from 2016 to 2023, and New Delhi, Ahmedabad, Bengaluru, Mumbai, Hyderabad, Pune, and Surat host the highest concentration of our service export businesses, emphasizing the significance of these urban hubs in India’s B2B market.
Our platform enables cross-border payments across some of the most exciting global markets! These include the United States of America, the United Kingdom, Canada, Australia, Germany, and Singapore.
*Note -This data is accurate up to December 31, 2023, and pertains specifically to Payoneer for the Indian market. All data as of 2016 – December 31, 2023, and related only to Payoneer for the Indian market.
EconomicTimes.com.: Tell us about Payoneer Elevate, which concluded in April 2024, and what benefits it provided to the business ecosystem in Delhi.
Delhi is an important market for Payoneer, hosting the largest number of service export businesses on our platform in India. Since 2016, we’ve seen the number of customers in service exports grow by 50% in New Delhi (as of December 31, 2023). We have also seen businesses from the city grow on our platform, with their transaction volume achieving an impressive CAGR of 98% between 2016- 2023.
Delhi-based service export companies specializing in consulting and management, programming and technical support, marketing and design, and multimedia are the top-performing domains on our platform. The largest markets for these companies are the US, the UK, Australia, Canada, Singapore, and Germany.
*Data as of 2016 – December 31, 2023 for Payoneer India.
Payoneer Elevate 2024 was the eighth edition of the Payoneer Forum in India, our global flagship event held across the world in 40+ cities across 17 countries, including London, Seoul, Manila, Bangkok, Mumbai, Jaipur, Roorkee, Indore, Dhaka, and Shenzhen, etc.
The event was a curation of an immersive range of sessions, panel discussions fireside chats, workstreams, and thoughtfully designed knowledge-sharing sessions.
The knowledge-led sessions by influential industry thought leaders and domain experts shed light on emerging trends for entrepreneurs, decision-makers, and growth leaders, offering invaluable industry insights, growth strategies, and ecosystem trends. Attendees connected with like-minded service exporters, gaining a holistic vision of the sector and a window into its future.
