In a move aimed at reducing risk associated with high-value business-to-business global commerce transactions, Payoneer has acquired Armor Payments for an undisclosed amount.
Armor Payments is a licensed B2B payments provider that offers “Escrow-as-a-Service” (EaaS), which allows buyers and sellers in direct deals or via indirect B2B marketplace transactions “to reduce the uncertainty and risk associated with high-value B2B purchases by making secure, online escrow payments anywhere in the world,” Payoneer said.
The service is positioned as an alternative to traditional letters of credit.
Scott Galit, chief executive officer of Payoneer, said the escrow solution of Armor Payments “fills in a critical missing link for B2B transactions, and moves beyond payments to address the trust gap that often exists between trading partners.”
Galit said the deal is in line with the company’s goal of improving global commerce “by connecting businesses, professionals, countries and currencies.” Payoneer’s flagship service is its cross-border payments platform.
“Our combined capabilities create a unique global platform that enables more businesses to grow faster by allowing them to securely trade across borders with more partners in more places, regardless of where they are in the world,” Galit added.
Scott Reynolds, cofounder and ceo of Armor Payments, said business “all over the world can work and trade globally more effectively knowing both sides are fully protected from fraud.”
Payoneer said the EaaS service “addresses the huge market of B2B transactions between $500 and $1 million, where credit cards and letters of credit are not suitable. With Armor Payments, Payoneer is now able to close this gap in B2B trade, disrupting an industry untouched for decades.”
Payoneer’s cross-border payments platform can be used in over 200 countries, and its mass payout services are used by companies that include Airbnb, Amazon, Google and Upwork, among others.
Last month Galit told WWD that year-over-year cross-border sales volumes rose 208 percent from 2014 to 2015. The bulk of sales are from Asian companies to buyers and consumers across the globe. The sales momentum includes both goods being shipped out of Asia as well as Asian consumers buying more products from U.S.- and European-based suppliers, the ceo said. Galit said he expects e-commerce sales to reach $3.5 trillion over the next five years, which would be just more than 12 percent of total, global retail sales.
Global e-commerce sales garner about 10 percent of total retail sales, according to eMarketer.