Payoneer Quietly Enters Gibraltar Prepaid Market

By Jon Matonis
Forbes
Monday, October 15, 2012

http://www.forbes.com/sites/jonmatonis/2012/10/15/payoneer-quietly-enters-gibraltar-prepaid-market/

Payoneer, a New York-based global payments and money transfer company, has quietly launched an EU subsidiary situated in Gibraltar having been approved by the financial regulator there in mid-2012.

Payoneer (EU) Limited is steadily building out its infrastructure and it is not clear when, or if, they intend to migrate their prepaid card portfolio to the Gibraltar location. Howard Gibbs is Managing Director with Lisa Ah-Moye as Finance Director and Mark Taylor as Money Laundering Reporting Officer.

In addition to facilitating global low-cost money transfers to over 200 countries, the EU subsidiary is focusing on payout solutions for international corporates, multi-level marketing companies, and affiliate networks.

Payoneer maintains its R&D center in Tel Aviv, Israel and is a privately-held venture with funding from Greylock Partners, Carmel Ventures and Crossbar Capital. They are most known for their Prepaid Mastercard product that corporate customers use to pay staff, affiliates, freelancers, and other service providers. However, since Payoneer is not a licensed banking institution they have had to outsource their card issuing business.

The self-governing jurisdiction of Gibraltar changes all of that. There are only three non-bank E-money institutions authorized under the Financial Services (Banking) Act for issuing means of payment in the form of electronic money. In addition to Payoneer (EU), the Gibraltar Financial Services Commission lists Wave Crest Holdings and Transact Network.

Why is this significant? For starters, it's a relatively small number of firms and it is not a new regulatory designation for Gibraltar as it falls under the EU E-Money Directive of 2009 which amended the 2006 and 2005 Directives that repealed the 2000 Directive. The E-Money Directive is transposed into law and applied nationally by the various member countries within the EU Single Market.

It is surprising that the Directive is not being leveraged more by the established U.S. players because it grants a license and the authority to issue prepaid Mastercard and VISA products directly after attaining card association membership thereby dramatically lowering the barriers to entry. Furthermore, it gives international brands an issuance platform throughout the whole European continent.

Previously, non-banks in the U.S. would have to negotiate a contract with a chartered, regulated banking entity like Choice Bank Limited in Belize or First Covenant Bank in Georgia or MetaBank in Iowa for their prepaid card issuing. Now they can become an issuer themselves.

In related prepaid debit card news, Delaware-based The Bancorp, Inc. has agreed to acquire the assets of Transact Network Limited, the largest e-money licensee and prepaid issuer in Gibraltar.

Frank Mastrangelo, President and COO of The Bancorp stated, "The acquisition of this platform from Transact Network, a well regarded Pan-European electronic money institution, will establish a European Payment Solutions presence for Bancorp and facilitate European expansion for many of Bancorp’s existing 'Payment Solutions' clients. It will also enable Bancorp to leverage its current BIN Sponsorship and Program Management Platforms for a wider set of European Payment solutions and offer enhanced products, flexibility, capability, and scalability. We will utilize our success and experience with our US payment solutions platform to grow our European presence."