Payoneer part 1: How to Sustain Success in China

Source: Payoneer
  1. Payoneer, a fintech wiht rare successful China entry is facing challenges from new comers.
  2. Payoneer should put in more resources into its China operation and connect its global resources to create more value added services and moats.
  3. The exciting cross border payment disruption is just started.

Industry background & use case

As a follower in first principle and jobs to be done (JTBD) theories, let’s first look into the basic foundation, the industry.


The players

The revenue opportunity from cross border B2B payment is estimated to be $290 billion. Notice, this is the just the revenue opportunity. Needless to say, with such large TAM (total addressable market) and necessity use case, the market is crowded and highly competitive in China.

Source: Spend Matters, Goldman Sachs

The current trend

The fierce competition has resulted in bringing down the fee. Paypal is the first to market with high fee of 5%. Starting 3 years ago, Payoneer’s fee was 3%, then Worldfirst came out with 1.2%, followed PingPong’s 1% and LianLian’s .7%

The new challengers

For Payoneer or anyone in the industry, the biggest challenger is Airwallex for the following reason:

  1. Moved its headquarter to China to focus on the Chinese market
  2. Raised more money than competitors, $402.7 million to date
  3. Offers cheap and fast service with new tech stack

Payoneer’s strategy

So, how should Payoneer, a successful fintech startup who has become the “incumbent” respond?

More focus on the Chinese market

First, Payoneer should look into its China strategy and operation on whether it has the right focus, resources and tools needed to be competitive.

Leverage its strength

Second, Payoneer needs to leverage its strength as the incumbent.

  • Strong global presence, and has been in operation and in China for a long time.
  • Created a community and leverage its knowledge and network (affiliates) to attract users.
  • Not the cheapest, but does seem to have a more complete offering.
  1. Avoided the crowded US and European market
  2. MiddleEast has a number of oil rich countries that rely heavily on imports, which China produce

The bigger picture

What truly gets me excited about cross border payment is that we have just begun. Throughout this article, we have only looked at one use case. Currently Payoneer and most of its peers are focused on cross border online sellers, freelancers, and the travel industry. But the whole cross border payment space is much bigger and many pain points still exists. As illustrated below, the current focus is only on the retail and SME:

Inspired by Simon Taylor from 11:FS



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Ming-Chieh Lee

Ming-Chieh Lee


passion for #fintech #payments #RTP real time payment #Banking as a Service #digital strategy #blockchain