Miguel Warren of Payoneer – Removing friction of cross-border payments

About Payoneer

Derek Gallimore interviews Miguel Warren, VP, regional head of South East Asia of Payoneer. Payoneer is the leading platform for global payments, suitable for SMEs, BPOs, and freelancers alike. This is the first of the two-part series featuring the company.

Miguel Warren talks about the recent Payoneer Forum held in the Philippines, the changing trend for small and medium-sized businesses and outsourcing, and how Payoneer is trying to erase the barrier of cross-border payments when transacting to different countries.

References:

Payoneer

outsourceaccelerator.com/273

 

Derek Gallimore: Hi and welcome back everybody. Today, I’m joined by Miguel Warren. He is the VP and Southeast Asia regional head of Payoneer. Hi Miguel, how are you?

Miguel Warren: Cheers, Derek. I’m doing well. Thanks.

Derek Gallimore: First, I just want to talk about the recent Payoneer event, the Manila forum that you hosted. Can you just start by explaining what this event is? And why is Payoneer so invested in the outsourcing industry?

Miguel Warren: Sure. First off, Derek, it’s a pleasure to be on your show. The recent event is a Payoneer forum, one of the things we do in dozens of cities all over the world, where we bring together subject matter experts, we bring together customers and we bring together people that are interested in all sorts of different business-related topics. 

This one, in particular, was focused on building a successful global outsourcing business. We are very keen to continue to help grow the overall outsourcing market in the Philippines, all the way from the large businesses to even the small and emerging ones. 

When you think about outsourcing providing services to either individuals or companies in the West, you don’t normally think about an individual. But actually, freelancers are providing outsourcing services to many customers in the US, Europe, and Australia. 

The event itself was meant to really gather a lot of these freelancers and SME BPOs and put them together with industry experts, such as yourself. We also have guests from the IBPAP, the local industry body for outsourcing. 

We had a speaker that owned outsourcing businesses who gave tips, advice, and strategies on how to continue to grow your business. Payoneer also talked a little bit about how our product can help enable freelancers and SME BPOs to go global.

Support for BPO in the Philippines

Derek Gallimore: This is what I try and reiterate to prospective clients out there in the West, sometimes they think that people are sitting in grass huts, and there isn’t a lot of sophistication to this industry. But the inertia behind this industry, the focus on building this industry and supporting this industry is incredible, isn’t it?

Everything, as you mentioned, from government agencies, non-governmental agencies, and then, of course, Payoneer, there’s incredible structural support that is helping build this industry. As you say, it’s a full lifecycle from the freelancers as they build into agencies and as they then build into BPOs, of course. 

(inaudible) a little bit, there’s the enterprise BPOs and really sophisticated operations.

Miguel Warren:  For sure. I couldn’t agree more. When I think about what the DICT, the Department of Information and Communications Technology has done with programs like the rural impact sourcing program. These sorts of initiatives by government pull in stakeholders. 

From the private sector, looking at developing next wave cities all over the Philippines, and fostering the growth of rural BPOs, if that’s what you want to call them. 

We’ve seen some amazing success stories where people have gone from being an individual freelancer that’s earning on Upwork or Fiverr or Freelancer.com, starting to build out an agency, starting to actually put physical centres all over the Philippines, and continue to grow their business. 

One particular example, Leif Margallo. He’s based in Iloilo. He has a company called Virtual Workforce Professionals. They have more than 700 people in nine centres all across the Philippines. He started out as a freelancer and still works with many customers on marketplace platforms. He, now, is starting to bring in more direct customers. 

When you think about his trajectory and what he’s doing to help create that next wave or that next generation of Filipino entrepreneur and freelancer, the mindset is now less about freelance and more about SME and BPO.

Impact sourcing and its effect

Derek Gallimore: Absolutely. These are incredible success stories. I mean, anywhere around the world. There’s also a concept of impact sourcing where you’re not only outsourcing offshoring, but you’re having a positive impact where you’re giving people jobs in the regions where previously they might not have opportunities. 

As you mentioned, Leif, who I was honoured to have met when I was down in Iloilo, incredible success stories to build these into. They are now a huge organization, aren’t they? It’s good for the Philippines, but also it’s good for the entire world because they are able to access highly skilled resources for high affordability

Miguel Warren: Absolutely. When I think about, you mentioned, the social impact of it has also a lot of other ripple effects. Aside from the fact that more business and more industry is developed outside Metro Manila, the capital, there’s more investment in infrastructure which the government is looking to put in place. 

This will spur all sorts of other benefits in terms of how these next wave cities will be able to develop, as they look internationally, to be able to further expand the coverage of that Filipinos talent that you mentioned. 

And for me, this is a point of pride, of course, but it’s also a recognition that globally, we need to start looking at providing higher-value services because that’s the flip side of it. The flip side is that yes, the Philippines could be viewed as a good global destination for low-cost services, but we’re also looking at continuing to encourage the provision of higher-value services. 

Whether It’s IT development services or tech-related skills, software development, many other things which the Philippines could potentially provide to the West, to Europe, and Australia.

Derek Gallimore:  It’s ironic that the industry is somewhat polarized in the big figurehead brands, the big BPOs with 10,000, 40,000, 50,000 staff. They’re very much one end of the spectrum. But probably, the reality is that the highest touchpoint that the average small and medium-sized business owner has is with the freelancers. 

It’s with the virtual assistants. Leif has started on these platforms, and it’s with those people that are flying the flag for the country, doing great work, and taking on more, higher-skilled roles. They’re literally running Western businesses from the provinces of the Philippines. 

It’s incredible to see that, I think just naturally, they’re climbing the skill ladder because there’s not a lot of small and medium-sized businesses that are really interested in the mundane, highly-repetitious jobs. They actually want the programming, the coders, the designers, the marketers, and all that stuff. So it’s really a fascinating kind of evolution of these skills versus businesses.

Miguel Warren: For sure. Again, I think that this is the product of the day and age where we are. When you think about how the internet has connected everybody, and how easy it is now to be connected and do business internationally. it’s basically levelled the playing field. 

When you think about what it used to entail to be able to service international clients, you need to have a big investment in infrastructure, a lot of people, be able to build your brand the traditional way. But now with the internet, with the advent of the digital economy, it’s never been easier to go global. Right? 

It’s now much easier to connect directly with people. It’s levelled the playing field. And I think levelling that playing field has enabled the individual freelancers and the SMEs and given them almost an advantage over the larger enterprises.

Payoneer and seamless payment

Derek Gallimore: Absolutely. That’s one of my passionate subjects as well. It’s globalization, isn’t it? I think ultimately we’re moving faster and closer towards one marketplace in terms of selling goods, but also in terms of sourcing your resources, your staffing, your skills. 

As the friction is reduced in terms of globalization, as you say, then that will make it easier for everyone to act within one marketplace. So going back to the beginning a little bit, and I do want to talk about Payoneer here. What is Payoneer and how does it fit so well with the needs of this industry? 

Miguel Warren: You mentioned just now about friction, right? Because, indeed, as we start to become more connected and as it’s easier to do business across borders, payment is typically something where there’s still a lot of friction because it’s based on very traditional cross-border methods. 

Payoneer is a global cross-border payments platform that serves businesses of all sizes and helps them to pay and get paid internationally as easy as they do locally. The company has been around since 2005. It’s based out of New York. 

We opened an office in the Philippines in 2016 and I’ve seen triple-digit growth since then. We’ve also seen our platform meaningfully evolved from a payments platform to what I’d like to call a commerce enablement platform. We help businesses of all sizes collect funds from global marketplaces. We mentioned some of those earlier, the UpWork, the Fiverrs and the Freelancer.com to this world. 

Also from direct international clients, if you’re doing business in many of these Western countries. Payoneer allows you to hold the funds and transact in your local currency in a cost-effective way, reducing the friction, and providing a lot of additional value-added services that help these businesses continue to grow and scale.

Derek Gallimore: It’s fascinating, isn’t it? Because you’re a FinTech. You’re really at the forefront of the future of work, in a way. You mentioned platforms, globalization, reducing all of the friction, and interacting globally. I suppose a short anecdote of when I started in one of my previous businesses. 

I tried to get a credit card payment gateway set up, this was about 10 or 12 years ago. Back then it wasn’t so normal, they were proposing a $250,000 deposit, just to be able to accept the Visa and MasterCard. I think this is a nod to how far the industries have now come and how this friction is being wiped out. 

It’s just incredible. And that’s exactly what Payoneer focuses on, isn’t it? It’s enabling people to do commerce globally, between themselves and across all of these platforms.

Miguel Warren: Absolutely. Right. Again, just going back to some of the terms that you used about, like reducing the friction, I mentioned earlier about levelling the playing field. This is still the reality of many small businesses. If they want to accept card payments, they’re going to have to fill in stacks of forms. 

The customer experience is not very good. It takes a long time for a small business to be able to receive card payments. What we’re trying to do, Payoneer, as you say, a FinTech and as a global platform, we’re trying to improve the customer experience to make it seamless, digital, and much easier to start focusing on the business rather than focusing on how to get paid.

Customer-centric experience

Derek Gallimore: Where are you involved, exactly? Because you’re involved in these platforms like the UpWork and Freelancer. Every day, we’re seeing new platforms like Shopify and these different plugins, and then, of course, you had BPOs. Then of course, on the other side of that, you have the client-side. 

They may be in the US somewhere figuring out how to pay these people that they’ve just employed. Where do you see all of this? You’ve got a bird’s eye view, based in Southeast Asia. This is an incredible melting pot and huge growth rates economically. Where do you see all of this going? Is it ever-expanding?

Miguel Warren: First off you were asking where we’re involved in what we see. The answer is all of the above. Payoneer works with 10s of thousands of leading digital brands, whether they are in the services space or the e-commerce space, the vacation rental space, or even in affiliate marketing and digital advertising. 

We partner with many of these leading global brands to help them payout to all of their freelancers, sellers, publishers, and merchants. Then on the client-side, on the receiving side, we allow the freelancer, merchant or company to basically receive funds directly from clients. We also provide a new platform for the small business, for example, in the US who wants to pay his freelancers in the Philippines, a way to conveniently do that through multiple payment methods. 

As we start to see trade increase, not just between the small businesses in the US and in the Philippines, but also from other countries like Australia, Europe, and within Southeast Asia, I think that the sky’s the limit in terms of how this industry will continue to evolve. 

I think that the focus does need to be on the experience and on the customer. Because if you can solve that, and if you can be customer-centric. I think the business is going to thrive as a result.

Globalizing and building trust

Derek Gallimore: Absolutely. This is the stuff that when I was embarking on globalized trade 15 years ago, it’s a major concern. You’re scratching your head as to how you sort of get around these hurdles and solve all these things. Whereas Payoneer I think, you’re one centralized platform and you deal with all the sort of complicating factors. 

Then for each party, it’s just the seamless transaction. It’s all happening within one portal. It removes all of that consideration and just allows people to basically concentrate on their business. 

Miguel Warren: Right. Just to add one more thing there: as you said, when you’re contemplating globalization, you’re looking at all these complicated ways to do business to get paid or to pay. Then you look at many different providers and different types of providers, whether its traditional, FinTech or more modern.

At the end of the day, as I always talk to my team and our customers, I really do feel that Payoneer is in the business of trust. We are looking to bridge the trust gap between the sender and the receiver, to improve the user experience so that trust is retained. 

Since we are licensed in different countries, we’re also focused on complying to local regulations. This is very important when it comes to payments and payment systems.

Derek Gallimore: Absolutely. With all of this, there’s so much under the bonnet or happening underneath and the duck’s legs are swimming really fast and the duck is calm on the surface. Business is so much like that, isn’t it? 

You really don’t want to get into the weeds of all this complicated stuff if it’s not your core business, but it’s so important to be compliant and to be on the right side of all of this regulation.

Miguel Warren: Absolutely. Because I think that’s really the mark that sets that transition between an individual and then a small business. That’s that next hurdle, right? How do you now comply? How do you now deal with taxes, registration, and all these things in a professional and compliant manner? 

Payoneer is also looking to provide other value-added services to help small businesses take that next level.

The globalized movement

Derek Gallimore: I’m in the thick of outsourcing, obviously. I’m a massive proponent of the industry. My belief is that there’s another 30 to 40 million jobs that are going to be offshored which I think is a win-win for everyone involved. This isn’t something to be nihilistic or concerned about. I think this is going to boost everybody’s economy and businesses. 

I see Payoneer has been at the forefront of this globalized movement. But it still amazes me. When I get in contact with prospective clients in the West, be it in the US or the UK, they’re still blissfully unaware of the opportunities of outsourcing or these globalized marketplaces. You have more of a bird’s eye view than me and certainly, Payoneer does as a company. 

Do you see the trend growing or is it just because I’m in the little pocket in the corner, where it seems ubiquitous? Where do you see this globalized thing currently?

Miguel Warren: First off, I agree with you. I definitely think that sky’s the limit. I do remember reading some of the content that you have on Outsource Accelerator and seeing the relatively small percentage of SMEs from the West that are outsourcing right now to the Philippines and other countries. 

I think that as more people start to connect digitally, then some of these barriers to doing trade cross-border will start to come down. When you look at what these platforms like Upwork and Fiverr and Freelancer have been able to do is that they’ve established a trusted intermediary model, where it connects both the buyer and the seller of the service. 

But despite the massive growth of these platforms, there is still a long way to go in terms of whether it’s a global marketplace or bridging of trust platform that we could start to see in the years to come. For me, it is really about working on both sides of the equation. Working with the receivers to help them see the new opportunities, but also working with the sender side. 

Whether it’s the payment or the platform, helping to connect, sharing with them information that we have about the market and the industry, and in some cases, even potentially making introductions. As we start to build this momentum, then we start to see these network and ripple effects that should hopefully propel the industry for many years to come.

Derek Gallimore: Exciting, isn’t it? I think everyone benefits as we move more towards one globalized economy. Super exciting. Miguel, I super appreciate your time and I want to get you back so that we can deep dive into Payoneer’s features, what it does, and how it can help businesses thrive. 

In the meantime, if anyone wants to learn more about Payoneer or find out about what you do, how can they get in touch?

Miguel Warren: Cheers. First off, thank you so much, Derek. Always a pleasure to chat with you. If anyone would like to learn more about Payoneer and how we can empower both the sending and receiving side of outsourcing, please go to payoneer.com. 

We’re also on Facebook and LinkedIn and all the major social platforms. We have offices all over Southeast Asia. You can find me on LinkedIn, search up Miguel Warren, Payoneer. Happy to always have a conversation with anyone interested to learn more about how Payoneer can help them go global. 

Derek Gallimore: Thank you so much, Miguel.

Miguel Warren: Cheers, Derek. Thank you.

Derek Gallimore: That was Miguel Warren of Payoneer. If you want any of the show notes or get in touch with Miguel or Payoneer, then go to outsourceaccelerator.com/273. And as always, if you want to ask us anything, then just drop some email to [email protected] See you next time

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