Payoneer Inc. acquired Armor Payments Inc. today, adding to its Payoneer’s suite of online payment services an Internet-hosted payment escrow service for business-to-business e-commerce sites and e-marketplaces.
The acquisition will enable Payoneer customers to access Armor’s “escrow-as-a-service” product, a variant on the software-as-a-service model that lets companies use the web to access software hosted on a vendor’s servers, says CEO Scott Galit. He declines to disclose the terms of the acquisition.
Galit says the acquisition will enable buyers and sellers to reduce the risks associated with high-value B2B purchases with the ability to make secure online escrow payments worldwide. Payoneer processes 150,000 applications monthly from small and medium-sized businesses located in some 200 countries. These businesses use the company’s payment services to pay trading partners located across borders, Galit says.
“Our combined companies are pursuing a $345 million market for small and mid-sized enterprises in emerging markets,” Galit says. “Payoneer is already a trusted provider of B2B payment services to millions of small businesses around the world. The escrow solution of Armor Payments fills a critical missing link for B2B transactions, and moves beyond payments to address the trust gap that often exists between trading partners.”
Armor CEO and co-founder Scott Reynolds says the acquisition allows Armor to expand its client base from business customers in the U.S. to clients located in such key regions as India, China, Hong Kong, South Korea, northern Africa and the Middle East. “Joining Payoneer is a natural step for our company,” he says. “It will open up our solutions to the huge and underserved international B2B market.”
Users of Armor’s escrow service include a variety of B2B goods and services marketplaces, crowdfunding sites, and other B2B organizations, including Toadlane, a B2B e-marketplace for wholesale electronics products, Reynolds says. Armor provides a software application programming interface, or API, and a software development kit that are designed to help clients connect their e-commerce sites to the escrow payment service. An API is a set of software instructions for connecting software applications. Armor was integrated into Payoneer’s suite of payment offerings last week.
Payoneer’s 2014 revenue totaled $82 million, and increased to more than $100 million in 2015, Galit says. Payoneer expects revenue to double in 2016, and predicts growth will be partially attributed to the addition of Armor’s technology, Galit says. The Payoneer platform processed many billions of dollars worth of transactions in 2015, he says. He declines to provide specific financial figures. Payoneer clients include: online lodging service Airbnb; online photo sharing service Getty Images; and Amazon.com.
No Armor employees were laid off during the merger, and the combined organization operates in Payoneer’s Palo Alto, Calif. headquarters. Armor Payments will maintain its development center in North Carolina.
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