Payoneer CEO sees trade bumps as short-term
This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter.
U.S.-led global trade disruption is turbulent in the near-term but represents a long-term tailwind for cross-border payments specialist Payoneer Global as companies adjust and find new trading partners, the company's chief executive contended in an interview this month.
President Donald Trump in April introduced a new 125% U.S. tariff on a broad range of goods imported from China, atop a prior 20% duty. That resulted in Chinese leaders imposing a reciprocal tax for U.S. goods. The countries later announced a 90-day pause on the duties, pending negotiations. The bulk of the U.S. tariffs on Chinese goods are delayed until Aug. 12, according to a Trump tariff tracker by law firm Reed Smith LLP, pending talks between the countries.
The same month Trump launched his trade war, Payoneer became licensed by China to provide online payment services in China, with its acquisition of Easylink Payment Co.
'The reordering, reshaping, reimagining of global trade plays to Payoneer's strengths,' Payoneer CEO John Caplan said in a June 13 interview, arguing that entrepreneurs operating small and medium-sized businesses adapt rapidly to U.S. trade policy.
As a result, he said, exporters' quest to find new markets fuels Payoneer's accounts payable and receivables business. The nearer-term, however, carries 'an air pocket of disruption,' Caplan added.
The trade turmoil prompted New York-based Payoneer to withdraw its full-year financial guidance on May 7 citing the 'macroeconomic uncertainty' unleashed by Trump's trade war.
'There are entrepreneurs around the globe who are reacting to shifts of policy, and they are incredibly resilient about finding pools of opportunity for their businesses,' Caplan said. 'People in the West are sourcing goods where they need to find them, and people in the East are diversifying where they sell and where they manufacture. Both of those dynamics end up benefiting Payoneer,' he said.
The cross-border payments specialist has 20% of its revenue – about $200 million – tied to China-based companies that sell into the U.S., William Blair analysts Christopher Kennedy and Marc Feldman wrote in a June 5 client note. Another 15% of Payoneer revenue is from China-based firms that sell to countries outside the U.S. Overall, 40% of Payoneer's revenue involves business that 'never touches the United States,' Caplan said.
About $50 million of Payoneer's revenue could be affected by tariff-related trade disruptions in the second half of this year, the William Blair analysts said, citing the company.
Payoneer says it has two million active customers across 190 countries and that it held about $7 billion in customer funds on which it pays no interest, as of the first quarter this year, according to its quarterly earnings presentation. The company turned profitable last year, and has told investors to expect longer-term earnings margins of at least 25% beyond 2026.
Under Caplan, who became CEO in March 2023, Payoneer has sought to move upmarket and do business with larger companies that bring more volume. Still, its focus remains on small and mid-sized businesses, many of them in emerging markets, and how to simplify cross-border payments for companies that may be too small for large financial institutions to service effectively, Caplan said.
'Our business is just about as diversified as you could get,' he said, referencing its breadth across the globe.
Shares of the company have declined 35% this year, owing to investor fears over its exposure to customers with businesses that export goods from or into China. The trade turmoil is 'a short-term headwind but an extraordinary long-term tailwind for our firm,' Caplan said at the conference.
Recommended Reading
Mastercard, PayPal mull stablecoins for B2B payments
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
33 minutes ago
- Yahoo
New ‘bonus' tax deduction up to $6,000 could be on the way for those age 65 or older
If the massive tax package currently being debated in Congress becomes law, Americans who are 65 and older will enjoy a hefty new tax break: An additional $4,000 to $6,000 drop in taxable income, thanks to a new additional standard deduction. The House version of the tax bill calls for a $4,000 additional deduction, while the Senate version ramps that up to $6,000. The House approved its version in May, and the Senate is working now to bring its version to a vote. Then the two chambers will need to massage each bill into one cohesive whole, before sending it to President Donald Trump for signature. The potential bad news for taxpayers? There would be income limits, with the value of the tax break phasing out starting at a modified adjusted gross income of $75,000 for single filers and $150,000 for married-filing-jointly filers. This new tax break would be temporary, in effect only from 2025 through 2028. 'The bottom line is if you're in the modified adjusted gross income that gets this, it will save you on taxes,' says Mark Gallegos, a CPA and tax partner at Porte Brown LLC in Chicago. This would put 'more money back in people's pockets, and I think that's the whole point,' he says. House version Senate version Additional standard deduction $4,000 $6,000 Income limits Starts to phase out at income of $75,000 for single filers, $150,000 for couples Starts to phase out at income of $75,000 for single filers, $150,000 for couples Permanent or temporary? Temporary; in effect from 2025 through 2028 Temporary; in effect from 2025 through 2028 Available to taxpayers who itemize? Yes Yes It seems likely that this new tax break would be added on top of the existing additional standard deduction that Americans who are 65 and older already enjoy. In 2025, that additional standard deduction is worth $2,000 for a single filer aged 65 or older, or $3,200 for a married-filing-jointly couple if both spouses are age 65 or older (if just one spouse is 65+, the additional deduction is $1,600). Neither the House nor Senate proposals are clear about whether the new tax break would be added on to that existing tax perk, says Mark Luscombe, a CPA and principal analyst for Wolters Kluwer Tax & Accounting in Chicago. Nothing indicates that it would replace the existing additional deduction, 'so my interpretation is it's in addition,' Luscombe says. Keep in mind, too, that both bills propose an increase to the existing standard deduction that's available to all taxpayers. This gets a bit complicated, so let's back up a bit: The Tax Cuts and Jobs Act essentially doubled the value of the standard deduction, effective from 2018 through 2025. Now, both the House and Senate tax bills would make that tax change permanent. On top of that, each of the bills would give the standard deduction a slight bump: The House bill would temporarily increase the standard deduction by $2,000 for joint filers, $1,500 for head of household filers and $1,000 for single filers and those married filing separately, effective 2025 through 2028. The Senate bill would permanently increase the standard deduction by those same amounts, starting in 2026. So if one of these bills becomes law, then taxpayers aged 65 or older would enjoy the slightly higher standard deduction, plus their regular additional standard deduction, plus the new additional standard deduction. Here's an example of how these tax breaks would work, assuming the Senate's $6,000 version becomes law and assuming the new tax break is on top of the existing additional deduction. Example based on Senate's proposed bill A 70-year-old single taxpayer with taxable income of $50,000 in 2026 likely would qualify for these deductions: $16,000 standard deduction $2,000 existing additional standard deduction $6,000 new additional standard deduction That adds up to a $24,000 total deduction. Thus, $50,000 minus $24,000 = $26,000 taxable income. That reduction in taxable income would drop the taxpayer into the 12 percent tax bracket, from the 22 percent tax bracket. Learn more: Current tax brackets and federal income tax rates This new additional standard deduction would be in lieu of tax-free Social Security benefits for retirees, an idea touted by Trump on the campaign trail. That's because changing how Social Security benefits are taxed would be complex — and costly, reducing government revenues by as much as $1.5 trillion over 10 years, according to an estimate by the nonpartisan Tax Policy Center. Adding an extra standard deduction is simpler and cheaper. The $4,000 proposal in the House bill would reduce government revenue by an estimated $66 billion over 10 years, according to a report from the Bipartisan Policy Center. Also, the proposed tax break would help out lower-income taxpayers more than ending taxes on Social Security benefits would have, Luscombe says. For one, Social Security beneficiaries with lower incomes generally don't owe taxes on their benefits — that's a fate that hits higher-income beneficiaries. Plus, the proposed new tax break – both the Senate and House versions — has income limits that would skew the benefit toward lower-income taxpayers. 'This proposal has a phase-out, which is unusual for a standard deduction,' Luscombe says. 'That would tend to focus it on lower- to middle-income taxpayers.' Also unusual for a standard deduction? This one would be available to people who itemize their deductions. Still, 'very few people at these income levels are itemizing,' Luscombe says. 'Only about 10 percent of taxpayers currently itemize, even with the current standard deduction.' Learn more: How to choose between claiming the standard deduction and itemizing
Yahoo
34 minutes ago
- Yahoo
Vietnam, US, hold negotiations on new trade deal, ministry says
HANOI (Reuters) -Vietnam and the United States held an online round of negotiations on a new trade deal on Thursday night, the Ministry of Industry and Trade said on Friday. During the negotiations with U.S. Secretary of Commerce Howard Lutnick and Trade Representative Jamieson Greer, Vietnamese trade minister Nguyen Hong Dien asked the U.S. to review "reciprocal tariffs" and market access for Vietnam's key exports, the ministry said in a statement.
Bloomberg
37 minutes ago
- Bloomberg
The Fight in China's $80 Billion-Plus Food Delivery Market
Does China have the world's best and cheapest food delivery apps? As revives its fight in the country's $80 billion-plus food delivery market, Bloomberg's Allen Wan puts three apps to the test to see who will deliver his Shake Shack lunch order the fastest. (Source: Bloomberg)
