How This Fintech Player Could Combine a Strength with a Threat to Create A Winning Crypto Strategy

This week I’ve been on a rant about crypto-related tax issues.

I started thinking about what non-blockchain companies are doing to solve the tax automation problem. And this made me reflect on Payoneer’s products. Here’s some background information.

In June of this year, Payoneer Global, Inc went public via SPAC on the NASDAQ.

If you haven’t heard of Payoneer, they are a legacy Fintech player providing cross-border payments. They make it easy for merchants to get paid for sales on multi-national marketplaces and pay suppliers in other countries without dealing with currency exchange. 

One interesting aspect of Payoneer’s product is a VAT Payments feature.

Merchants in Europe and the UK can pay VAT using the funds in their EUR and GBP accounts. Instead of withdrawing and converting funds from a bank account, Payoneer allows merchants to pay their VAT from their account balance at no cost.

And Payoneer could replicate this functionality via crypto. 

That is if they accepted crypto. But they don’t. And crypto is one of the biggest threats to Payoneer’s current business model. In their S-1 filing, Payoneer listed the following risk:

In addition, cryptocurrencies like Bitcoin and Etherium; blockchain-based payment systems like Ripple; and central bank digital currencies, all have the potential to be used to support cross-border payments and could offer alternatives to businesses and other users and become more significant competition in the future.- Payoneer Global Inc

Here’s how Payoneer can create a winning strategy.

By accepting crypto and allowing merchants to pay their tax bills, Payoneer would position itself as a cross-border crypto-remittance player. Some may say you can do this without Payoneer’s service. And to that, I say yes. You can! If you’re a small-time player. If you’re a merchant conducting thousands of transactions per day, you’re going to want a more robust system to maintain reporting requirements.

Thanks for reading!

All the best,

Roy Naquin

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