March 28, 2007

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  NEWS: Funding for Alternative Debit Issuers

  Payoneer, a fledgling debit-cad company, has gained $4 million in investment funds, thanks to the benevolence of Greylock Partners and included Crossbar Capital and several angel investors. The news-making endowment is just another sign that the market is ripe, as experts say, for smaller, independent debit cards to really make a hit in the market where Visa and MasterCard seem unassailable foes. The development and occasional acquisition of these upstarts has been followed closely by The Wall Street Journal, for example. WSJ recently reported on Citigroup's purchase of Conshohocken, Pennsylvania-based Ecount, an issuer of private label commercial debit cards.
  
  A Greylock representative, Moshe Mor, indicated that he believed that private-label debit cards were necessary in a market where bloggers in particular may be working from a totally different nation than their employers. There is a need to be able to pay anyone, anywhere in the world, said Mor, and debit cards are the way to do it – both overseas cash transfers and secure check transmission are prohibitively expensive for most employers. Additionally, doing away with wire transfers or paper checks eliminates the need for employees to stand in line at a traditional bank. The dot-com bubble may have burst, but there is a gravid "web 2.0" market, ripe with potential, that needs a secure and less expensive currency. That is where Payoneer will find its market, say reps from both the company and its investment partners. Mor points to the fact that PayPal managed to survive the dot-com bubble bursting, because it had aligned itself with a niche and held strongly to it. Payoneer hopes to do the same in the realm of providing branded debit cards to companies that need to pay rebates, incentives, bonuses and payroll.
  
  
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