Scott Galit has been CEO of cross-border payment company Payoneer (a Viola Ventures portfolio company) since 2010, and has led the company through its journey from startup to global leader, ranked for the second year in a row among CNBC’s 50 most disruptive companies for 2018, together with likes of SpaceX, Airbnb, Lyft, WeWork and others. Scott was our guest speaker at one of our FinTech Forum meetups recently, where shared some insights about Payoneer’s growth and offered valuable tips for FinTech entrepreneurs.

The following video includes highlights from the meetup (see below for a list of the topics covered and some standout quotes).

Watch a specific highlight in the video using the TimeStamp links below:

0:18 – 3:53 (about 3.5 min)
4 Mega-Trends of the 4th Industrial Revolution that have informed Payoneer’s “world view”:
1) Borders have come down (less friction between people connecting, interacting and transacting)
2) A more “connected” environment (in many ways for the first time)
3) Unprecedented access to market for SMEs: “The gap between talent and market has never been smaller.”
4) Emergence of new marketplaces and platforms: New commercial intermediaries & supply chains
“Democratization of access and opportunity for people in small businesses through technology and borderless connectivity”

3:53 – 7:49 (about 4 min)
Important to understand whether you’re part of an Evolution vs Revolution
4:06 Example 1: Why China achieved better mobile payment capabilities than Korea
6:02 Example 2: eBay & PayPal
6:40 How these examples relate to Payoneer:

“With Payoneer, we didn’t have to do anything revolutionary. The revolution that was happening was that there were digital marketplaces and platforms all over the world that were creating new opportunities for people in small businesses all over the world to sell things all over the world, and that created a whole bunch of payment friction. We were smart enough, and also lucky enough to have been at the right place at the right time with something that solved a fundamental problem that stood between people and their ability to participate in that revolutionary change. So it’s really important to be clear-headed about what you’re trying to accomplish, because if you’re trying to make something incrementally better – your customer acquisition costs, your time to critical mass, and ultimately the likelihood of success are all going to be radically different than if you’re participating in some change that’s bigger than whatever it is that you’re creating.“

 

7:50 – 9:53 (about 2 min)
Building Trust: “Understand that you’re in the Trust business, and that it’s fragile.”

9:53 – 11:13 (about 1.5 min)
TREND: moving away from the borderless, frictionless world
Recurring themes where different countries around the world may take different approaches include: Privacy, Tax jurisdiction, Consumer protection / safety of funds, money laundering controls, Cybersecurity, ability to implement monetary policy.

11:13 – 11:55 (about 0.5 min)
The difference between being global and “local everywhere”

11:55 – 13:08 (about 1.5 min)
The importance of remembering to put the Fin in FinTech from the very beginning, because the penalties for non-compliance can be very high: “If you think compliance is expensive, try non-compliance.”

13:08 – 14:01 (about 1 min)
How Payoneer localized the business physically around the world through brand ambassadors.
BONUS: Read Payoneer VP Marketing Jonny Steel’s post on 10 Tips for building your company’s brand ambassador program from scratch

14:01 – 15:03 (about 2 min)
How Payoneer developed a unique global platform – step by step

“Over the years, what we’ve been doing is putting one foot in front of the other, listening to the opportunities our customers were trying to pursue, the friction that they felt, and try tried to figure out ways to address that and solve for that. And so, step by step we’ve been able to leverage that into a pretty amazing global infrastructure.”

 

15:19 – 16:01 (less than a minute)
How Payoneer leveraged its relationship with Airbnb as a stepping stone to working with other marketplaces.

16:01 – 18:09 (about 2 min)
Why working with SMEs is what gets Payoneer most excited

16:09: “This is where we really feel the impact that we are having on real people and their lives, their ability to generate more jobs in their home market, more income, more of a legacy for their family – and that’s something we’re super excited about. When we first started with those brand ambassadors, we created a new engagement model. We kind of recognized that we’re in the empowerment business, not in the payment business. We recognized that we were there to help people participate in this new frictionless digital global economy where there are more opportunities regardless of where you come from and how small you are.”

17:47: “We believe that in this new digital world there’s a whole new generation of businesses that are emerging that we really feel a responsibility to help grow, and we believe as they grow and as we continue to help them solve their problems, and capture the opportunities that are out there – that we’ll grow with them.”

 

18:09 – 21:20 (about 3 min)
How Payoneer achieved success through evolution

18:30: “We didn’t get here by being brilliant. Yuval had a brilliant insight in the beginning, and then I think we were ‘a little good’ and ‘a fair amount lucky’ and then we had a bunch of people who were smart enough and good enough to understand that, and understand how to make some good decisions after it, to keep it going.”

 

18:53 – Example: How partnering with oDesk (now Upwork) led to Payoneer’s entry into new geographical markets and new partnering opportunities i.e. new networks:

19:58: “Our business has had a sort of growth of network effects over time, and we’ve cultivated it. But there’s nothing we could have done to replace that starting point. Along the way, we cultivated “layers of value”, each of which took what came before. So the brand started to develop because we worked with brands that other people were working with and trusted, and we’ve done a lot to protect it, nurture it and cultivate it. There were network effects we couldn’t have started if there weren’t networks of activity that we were lucky enough to stumble our way into. After we did that, we knew how to do KYC on people in random places around the world that no one else knew how to do, and we had a critical mass effect. That built a really unique KYC infrastructure that no one else had, and we’ve been able to leverage that in regulatory environments and with our banking partners.”

 

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