It’s a match made in heaven for a pair of startups offering two complementary services. Armor focuses on payment security as a third-party intermediary while Payoneer focused on international payments and currency exchange during those transactions.
“SMBs all over the world can work and trade globally more effectively knowing both sides are fully protected from fraud,” Scott Reynolds, Co-Founder and CEO of Armor Payments, said in a statement.
Armor bills itself as the only B2B company offering so-called EaaS, or escrow-as-a-service. By ‘integrating a simple API,’ the two companies tout they will be able to manage B2B transactions anywhere between $500 and $1 million, anywhere in the world.
Oh come on, Geektime. What does escrow mean?
Glad you asked. Escrow accounts are essentially holding accounts. Sometimes the accounts are used as intermediaries between buyers and sellers, usually for massive transactions like home purchases or large investments. Putting money in escrow shows the seller that the potential buyer is serious and is ready to lay down the funds, but the buyer is protected in case the seller were to take the money and run.
Beyond home buying, escrow accounts have several other uses. Escrow agents, in this case Armor Payments, make sure deals go down smoothly and get commission from the deals.
Payoneer and Armor aren’t the only players in the EaaS game. Freelancer.com bought Escrow.com in April 2015, which had raised at least $30 million from Chase Manhattan Corporation, Madison Securities, Pacific Century CyberWorks, SoftBank and VerticalNet. Several real estate and bitcoin-related startups are also in the game: Middlie (Los Angeles), Escrow My Bits, CrowdPay (Texas), Redkomodo (Charlotte, NC) and Snapdocs (San Francisco) are just a few.
Payoneer has raised $90 million over the years with its largest round being a $50 million Series E in August. Investors include 83North, Carmel Ventures, NYCA Partners, Vintage Investment Partners, Wellington Management, Susquehanna Growth Equity and Greylock Partners. Payoneer lists several brands among its customers like Airbnb, Google, Upwork and Amazon.
“Payoneer is already a trusted provider of B2B payment services to millions of small businesses around the world,” Scott Galit, CEO of Payoneer, said in a press release. “The escrow solution of Armor Payments fills in a critical missing link for B2B transactions, and moves beyond payments to address the trust gap that often exists between trading partners.”
Payoneer maintains multiple offices with headquarters in New York. Armor staff will join Payoneer at their offices in Los Gatos, California, while maintaining the Armor development center in North Carolina. Armor was co-founded by former CEO Scott Reynolds, a former senior manager at PayPal and Mastercard, and CTO Mark French. Payoneer was founded by President Yuval Tal and Ben Yaniv Chechik.