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What changed in Payoneer Global Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Payoneer Global Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+488 added−535 removedSource: 10-K (2024-02-28) vs 10-K (2023-02-28)

Top changes in Payoneer Global Inc.'s 2023 10-K

488 paragraphs added · 535 removed · 347 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

67 edited+38 added−72 removed25 unchanged
Biggest changeThe data privacy and security laws and regulations to which our business is subject may apply to personal information and data concerning our customers, employees or other third parties who interact with us, and include the California Consumer Privacy Act of 2018 (as amended, including by the California Privacy Rights Act of 2020 and the California Consumer Privacy Act Regulations), the Personal Information Protection and Electronic Documents Act, the CAN-SPAM Act, Canada Anti-Spam Law, the Telephone Consumer Protection Act, Section 5(c) of the Federal Trade Commission Act, the European Union’s Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation), or the GDPR, and other laws, enactments, regulations or orders transposing, implementing, adopting, supplementing or derogating from, the GDPR in each European Economic Area Member State, including the Irish Data Protection Act 2018, the European e-Privacy Directive currently implemented through national European laws in connection with the respect for private life and the protection of personal data in electronic communications (which is expected to be replaced by the European e-Privacy Regulation, which is still under development), GDPR as transposed into the United Kingdom national law by operation of section 3 of the European Union (Withdrawal) Act 2018 and as amended by the European Union (Withdrawal) Act 2018 and as amended by the Data Protection, 12 Table of Contents Privacy and Electronic Communications (Amendments etc.) (EU Exit) Regulations 2019, together with the Data Protection Act 2018, the Privacy and Electronic Communications (EC Directive) Regulations 2003 (as amended) and other data protection or privacy legislation in force from time to time in the United Kingdom, the Data Security Law of the People's Republic of China and Personal Information Protection Law of the People's Republic of China, Brazil’s Lei Geral de Proteção de Dados Pessoais (LGPD), the Australian Privacy Act of 1988 and Japan’s Act on the Protection of Personal Information.
Biggest changeThe data privacy and protection laws and regulations to which our business is subject may apply to personal information and data concerning our customers, employees or other third parties who interact with us, and include the California Consumer Privacy Act of 2018 (as amended, including by the California Privacy Rights Act of 2020 and the California Consumer Privacy Act Regulations), the Personal Information Protection and Electronic Documents Act, the CAN-SPAM Act, Canada Anti-Spam Law, the Telephone Consumer Protection Act, Section 5(c) of the Federal Trade Commission Act, the European Union’s General Data Protection Regulation (GDPR), and other laws, enactments, regulations or orders transposing, implementing, adopting, supplementing or derogating from, the GDPR in each European Economic Area Member State, including the Irish Data Protection Act 2018, the UK retained EU law version of GDPR as defined in the Data Protection Act 2018, and as amended from time to time (UK GDPR), the European e-Privacy Directive currently implemented through national European laws, the Data Security Law of the People's Republic of China, the Personal Information Protection Law of the People's Republic of China, Brazil’s Lei Geral de Proteção de Dados Pessoais (LGPD), the Australian Privacy Act of 1988, Singapore Personal Data Protection Act 2012, Hong Kong Personal Data (Privacy) Ordinance, Japan’s Act on the Protection of Personal Information, and other data protection or privacy legislation in force from time to time.
This Customer Approval Policy constitutes an integral part of Payoneer’s AML/CTF program and outlines our responsibilities with respect to applicable KYC requirements as detailed in pertinent US laws, regulations, and statutes, including the Bank Secrecy Act (“BSA”), the USA PATRIOT Act, and in the relevant laws, regulations, and statutes of jurisdictions where Payoneer holds a local license.
The Customer Approval Policy constitutes an integral part of Payoneer’s AML/CTF program and outlines our responsibilities with respect to applicable KYC requirements as detailed in pertinent US laws, regulations, and statutes, including the Bank Secrecy Act (“BSA”), the USA PATRIOT Act, and in the relevant laws, regulations, and statutes of jurisdictions where Payoneer holds a local license.
Payoneer Inc. is a licensed money transmitter under the laws of all U.S. states where such license is necessary, the District of Columbia and Puerto Rico. The Money Transmitter license for Nevada is held by Payoneer US LLC, a subsidiary of Payoneer Inc. due to Nevada’s requirements.
Payoneer Inc. is a licensed money transmitter under the laws of all U.S. states where such license is necessary, the District of Columbia and Puerto Rico. The Money Transmitter license for Nevada is held by Payoneer US LLC, a subsidiary of Payoneer Inc. due to Nevada’s specific requirements.
Activity that is outside the norm or inconsistent with an institution’s understanding may be suspicious and require reporting to authorities.
Activity that is outside the norm or inconsistent with an institution’s understanding may be suspicious and require reporting to the appropriate authorities.
We implement a variety of technical and organizational security measures and other measures to protect the data we process, including data pertaining to our customers, employees and business partners, but despite the measures we put in place, we may be unable to anticipate or prevent unauthorized access to such data.
We implement a variety of technical and organizational security measures and other measures to protect the data we process, including data pertaining to our customers, employees, business partners, and other third parties, but despite the measures we put in place, we may be unable to anticipate or prevent unauthorized access to such data.
Various aspects of our business are, may become, or may be viewed by regulators from time to time as subject, directly or indirectly, to U.S. federal, state and foreign laws and regulations. As a cross-border digital payment platform, our business includes the facilitation, through our global bank and partner network, of the acceptance and/or payout of funds.
Various aspects of our business are, may become, or may be viewed by regulators from time to time as subject, directly or indirectly, to U.S. federal and state and foreign laws and regulations. As a cross-border digital payment platform, our business includes the facilitation, through our network of bank and local payment partners, of the acceptance and/or payout of funds.
We do not have any issued patents. We consider our digital payment platform, which provides payment, financial, merchant, working capital and other services to companies, marketplaces, eCommerce sellers and others, to be our proprietary technology. The development and management of our platform require sophisticated coordination among many specialized employees.
We do not have any issued patents. We consider our digital payment platform, which provides payment, financial, merchant, working capital and other services to companies, marketplaces, e-commerce sellers, freelancers, and others, to be our proprietary technology. The development and management of our platform require sophisticated coordination among many specialized employees.
These laws and their implementing regulations generally restrict certain collection, processing, storage, use and disclosure of personal information, require notice to individuals of privacy practices, and provide individuals with certain rights to prevent use and disclosure of protected information.
These laws and their implementing regulations generally restrict certain collection, processing, storage, use and disclosure of personal information, require notice to individuals of privacy practices, and provide individuals with certain rights to 10 Table of Contents prevent use and disclosure of protected information.
For additional information regarding some of the risks relating to our intellectual property rights, see “Risk factors - Risks Related to Our Business and Industry.” 14 Table of Contents Available Information Our website is www.payoneer.com.
For additional information regarding some of the risks relating to our intellectual property rights, see “Risk factors - Risks Related to Our Business and Industry.” Available Information Our website is www.payoneer.com.
Robust and Scalable Compliance, Risk & Regulatory Infrastructure We implement a comprehensive Anti-Money Laundering/Combatting Terrorist Financing (AML/CTF) and Sanctions Program in compliance with the laws of the jurisdictions where Payoneer is regulated. Through our AML/CTF program we manage the compliant onboarding and ongoing monitoring of our customers, who come from more than 190 countries and territories worldwide.
Robust and Scalable Compliance, Risk & Regulatory Infrastructure We have designed and implemented a comprehensive Anti-Money Laundering/Combatting Terrorist Financing (AML/CTF) and Sanctions Program in compliance with the laws of the jurisdictions where Payoneer is regulated. Through our AML/CTF program we manage the compliant onboarding and ongoing monitoring of our customers, who come from more than 190 countries and territories.
These regulatory authorities include, the Australian Securities and Investment Commission in Australia, the Customs and Excise Department in Hong Kong, the Kanto Finance Bureau in Japan, and the Financial Conduct Authority in the United Kingdom.
These regulatory authorities include the Australian Securities and Investment Commission in Australia, the Customs and Excise Department in Hong Kong, the Kanto Finance Bureau in Japan, the Monetary Authority of Singapore in Singapore, and the Financial Conduct Authority in the United Kingdom.
As an online business, we are also subject to laws and regulations 11 Table of Contents governing the internet, such as those relating to intellectual property ownership and infringement, trade secrets, the distribution of electronic communications, search engines and internet tracking technologies, and could be affected by potential changes to laws and regulations that affect the growth, popularity or use of the internet, including with respect to net neutrality and taxation on the use of the internet or eCommerce transactions.
As an online business, we are also subject to laws and regulations governing the internet, such as those relating to intellectual property ownership and infringement, trade secrets, the distribution of electronic communications, search engines and internet tracking technologies, and could be affected by potential changes to laws and regulations that affect the growth, popularity or use of the internet, including with respect to net neutrality and taxation on the use of the internet or e-commerce transactions.
Our Know Your Customer (KYC) and Customer Due Diligence (CDD) processes are managed through a proprietary infrastructure and dedicated team, combining automated tools and operational processes with regular audits and reviews to test and monitor for compliance.
Our Know Your Customer (KYC) and Customer Due Diligence (CDD) processes are managed through a proprietary infrastructure and are supported by dedicated teams, combining automated tools and operational processes with regular audits and reviews to test and monitor for compliance.
Payoneer’s KYC program includes: (i) policies and procedures for collecting and verifying information on the identity of customers; (ii) policies and procedures for gathering further information about customers to gain a better understanding of the relationship and anticipated transaction activity; and (iii) policies and procedures for monitoring customer activity throughout the lifecycle of the relationship.
Payoneer’s KYC program includes: (i) policies and procedures for collecting and verifying information on the identity of customers; (ii) policies and procedures for gathering further information about customers to gain a better understanding of the relationship and anticipated transaction activity, including a periodic review of the customer’s account information; and (iii) policies and procedures for monitoring customer activity throughout the lifecycle of the relationship.
(later renamed Payoneer Global Inc.), Starship Merger Sub I Inc., a Delaware corporation and wholly owned subsidiary of New Starship Parent Inc., Starship Merger Sub II Inc., a Delaware corporation and wholly owned subsidiary of New Starship Parent Inc., and Payoneer Inc.
(later renamed Payoneer Global Inc.), Starship Merger Sub I Inc., a Delaware corporation and wholly owned subsidiary of New Starship Parent Inc., Starship Merger Sub II Inc., a Delaware corporation and wholly owned subsidiary of New Starship Parent Inc., and Payoneer Inc. 12 Table of Contents
The activities of those non-U.S. entities are, or may be, supervised by a financial regulatory authority in the jurisdictions in which they operate and under which they are licensed to provide services.
The activities of those non-U.S. entities are supervised by the financial regulatory authority in the jurisdictions in which they operate and under which they are licensed to provide services.
These licenses support the full range of Payoneer Account and Mass Payout payment services and among other activities, subject us to reporting requirements, bonding requirements, limitations on the investment of customer funds and inspection by state regulatory agencies. Outside the U.S., we provide localized versions of our services to customers through various foreign subsidiaries.
These licenses support the full range of Payoneer Account and Mass Payout payment services and among other obligations, subject us to reporting requirements, bonding requirements, certain limitations on the investment of customer funds and inspection by state regulatory agencies. Outside of the U.S., we provide our services to customers through various non-U.S. regulated subsidiaries.
Our SMB customers can receive funds from marketplaces, buyers, trading partners and more. They can accept payments locally in the country where their buyer is located in the buyer’s local currency.
Our customers can receive funds from marketplaces, other businesses and customers, trading partners and more. They can accept payments locally in the country where their buyer is located and, often, in the buyer’s local currency.
We have also built a sophisticated risk management infrastructure to address the risks of digital commerce and a global risk management platform to manage the risks of supporting billions of dollars of volume in over 7,000 trade corridors globally for millions of platform participants.
We have also built a sophisticated risk management infrastructure, leveraging machine learning-based fraud typologies, to address the risks of digital commerce and a global risk management platform to manage the risks of supporting tens of billions of dollars of volume in over 7,000 trade corridors globally for millions of platform participants.
We also rely on a wide range of third-party systems for specialized capabilities, which are integrated into our proprietary platform. We continuously make significant investments in cybersecurity infrastructure and processes to protect our systems and data from breaches. Trusted Brand Supported by Local Teams Payoneer’s customers come from over 190 countries and territories.
We also rely on a wide range of third-party systems for specialized capabilities, which are integrated into our platform. We make significant and ongoing investments in our cybersecurity infrastructure and processes. 5 Table of Contents Trusted Global Brand Supported by Local Teams Payoneer’s customers come from over 190 countries and territories.
Our platform supports millions of transactions and hundreds of thousands of new applicants monthly and tens of billions of dollars of volume annually. We build and maintain most of the systems we use to deliver service to our customers, including our customer-facing systems, back-office systems, risks management and compliance systems.
Our platform supports millions of transactions, hundreds of thousands of new applicants monthly, and processes tens of billions of dollars of volume annually. Most of the systems that deliver service, including our customer-facing systems, back-office systems and risks management and compliance systems are proprietary.
In connection with the closing of the Reorganization, we changed our name to Payoneer Global Inc. Following the Reorganization, we became a publicly traded company, with our subsidiary Payoneer Inc. continuing the existing business operations.
In connection with the closing of the Reorganization, we changed our name to Payoneer Global Inc. and became a publicly traded company.
Payoneer for Banks partners integrate Payoneer APIs to embed Payoneer services into their technology. Our Growth Strategy Payoneer is solving key customer needs through our differentiated product offering and platform, and we are well positioned to capture significant growth opportunities from long-term secular trends.
Our Growth Strategy Payoneer is solving key customer needs through our differentiated product offering and platform, and we are well positioned to capture significant growth opportunities from long-term secular trends.
The universe of competition includes payment methods like checks, wires, mobile wallets, network-branded physical and virtual cards, local clearing providers, open banking services and alternative payment methods. 10 Table of Contents There are also myriad types of payment providers that offer global payment services including global treasury banks that serve large corporate accounts; small local banks that focus on serving local SMBs; FX companies that focus on serving SMB importers and exporters; global digital payment platforms like PayPal, Ant Group, or Wise; global card networks; Neobanks; SMB-focused B2B payment providers like Bill.com; mass payout service providers that specialize at providing services to enterprises and marketplaces, SMB AP/AR SaaS providers; merchant service providers that sell services to marketplaces like Adyen, Braintree and Stripe; and local companies that focus on enabling SMBs in one or more local markets to sell on digital marketplaces globally.
There are many types of payment providers that offer global payment services including global treasury banks that serve large corporate accounts; small local and regional banks that focus on serving local SMBs; FX companies that focus on serving SMB importers and exporters; global digital payment platforms like PayPal, Ant Group, or Wise; global card networks; Neobanks; SMB-focused B2B payment providers like Bill.com; mass payout service providers that specialize at providing services to enterprises and marketplaces, SMB AP/AR SaaS providers; merchant service providers that sell services to marketplaces like Adyen, Braintree and Stripe; and local companies that focus on enabling SMBs in one or more local markets to sell on digital marketplaces globally.
From a total rewards perspective, Payoneer offers a compensation and benefits package that is scalable, sustainable and equitable. The principle behind our total rewards approach is to attract, retain and engage top talent in a manner that will drive desired behaviors and increase business performance while nurturing the wellbeing of our employees and their families.
The principle behind our total rewards approach is to attract, retain and engage top talent in a manner that will drive desired behaviors and increase business performance while nurturing the wellbeing of our employees.
To effectively serve this global customer base, we have teams in developed and emerging markets, including primary hubs in the US, Israel, Hong Kong, Philippines and China that provide operational support. These teams provide around the clock customer care in dozens of languages across multiple channels (mobile, online, chat, email, phone and social media).
To effectively serve this global customer base, we have regional sales and support hubs, including in the U.S., Israel, Hong Kong, Philippines, Korea, Romania, Guatemala, Poland, India, and China. These teams provide around the clock customer care in dozens of languages across multiple channels (mobile, online, chat, email, phone and social media).
Compliance with KYC Requirements. Payoneer Inc. and other licensed entities of Payoneer are committed to compliance with all applicable customer identification regulatory requirements. We are committed to preventing the use of our financial products by persons who seek to launder the proceeds of criminal activity, finance terrorism, or conduct other criminal acts.
Compliance with KYC Requirements. The licensed entities of Payoneer are subject to regulations related to customer identification in the jurisdictions in which they onboard customers. We are committed to preventing the use of our financial products by persons who seek to launder the proceeds of criminal activity, finance terrorism, or conduct other criminal acts.
For instance, we apply our machine-learning models in key areas such as lifetime value assessment, risk management and working capital underwriting. Utilizing these unique data insights, we are able to offer new valuable solutions, drive growth and improve our profitability.
These models enable us to make informed predictions to better serve our customers’ needs. For instance, we apply our machine-learning models in key areas such as lifetime value assessment, risk management and working capital underwriting. Utilizing these unique data insights, we are able to offer new products and features, improve engagement and drive growth and improved profitability.
Employee Wellness Our employees are our most valuable strength at Payoneer so we invest heavily in attracting and retaining our talented employees. We are highly focused on the health, safety and wellbeing of our employees, providing them with access to a wide-reaching support network that prioritizes both physical and mental health and wellness.
We are highly focused on the health, safety and wellbeing of our employees, providing them with access to a wide-reaching support network that prioritizes both physical and mental health and wellness.
Regulation Payments Regulation . Various laws and regulations govern the payments industry in the U.S. and globally. Payoneer is licensed in multiple jurisdictions and serves customers in over 190 countries and territories worldwide, from such licensed locations. Payoneer Inc. is a Money Service Business registered with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN).
Payoneer is licensed in multiple jurisdictions and, via its licensed entities, serves customers in over 190 countries and territories worldwide. In the U.S., Payoneer Inc. is a Money Service Business registered with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN).
Despite their digital maturity, many SMBs doing business in these emerging markets have access to only the most basic services offered by their local financial institutions. Global banking and payment services mostly remain out of reach, forcing emerging market SMBs to seek alternative methods of payment.
This is especially true in emerging markets, where despite their digital maturity, many SMBs have access to only the most basic banking and payment services offered by their local financial institutions. Global banking and payment services mostly remain out of reach, forcing emerging market SMBs to seek alternative partners to help them manage their cross-border AR and AP needs.
Drive Growth Through Modern Technology and Global Reach Payoneer delivers technology-based services to our customers through a proprietary modern technology infrastructure that includes robust and secure application programming interfaces (“APIs”) as well as web and mobile applications and machine learning infrastructure.
The power of the Payoneer platform comes from the following pillars: Modern Technology and Robust Infrastructure Payoneer delivers technology-based services to our customers through a proprietary modern technology infrastructure that includes robust and secure application programming interfaces (“APIs”) as well as web and mobile applications.
Pursue Strategic M&A Following our acquisition of optile GmbH (now, Payoneer Germany GmbH) (“optile”) in 2020, we believe there are many more opportunities to leverage our global platform, regulatory and compliance infrastructure, technology, brand and team to deliver additional value to more customers more quickly if we supplement our organic product development with targeted acquisitions that add new capabilities or drive greater efficiency to our platform.
Pursue Strategic M&A We believe there are many opportunities to leverage our global platform, regulatory and compliance infrastructure, technology, brand and team to deliver additional value to more customers more quickly by supplementing our organic product development with 8 Table of Contents targeted acquisitions that add new capabilities or deeper geographic penetration to our platform.
Given the diverse nature of Payoneer’s customers and their businesses, our revenues experience seasonal fluctuations as a result of consumer and businesses spending patterns.
Payoneer’s customers sell their goods or services either via a marketplace or directly to other businesses (B2B), and/or to customers via webstores. Given the diverse nature of our customers and their businesses, Payoneer’s revenues experience seasonal fluctuations as a result of consumer and business spending patterns.
As of December 31, 2022, we are in good standing in all of the jurisdictions in which we operate around the world. We are regulated as a non-bank financial institution in key markets around the world, namely the United States, Europe, Hong Kong, Japan and Australia.
We are regulated as a non-bank financial institution in key markets around the world, namely the United States, Europe, United Kingdom, Hong Kong, Japan, Singapore, and Australia, via local subsidiaries.
In the United States, we are registered as a Money Service Business and are licensed as a Money Transmitter in all U.S. states in which such licenses are necessary and the District of Columbia and Puerto Rico.
In the United States, we are registered as a Money Service Business and are licensed as a Money Transmitter in all U.S. states in which such licenses are necessary and in the District of Columbia and Puerto Rico. Payoneer Europe Limited is an authorized e-money institution in Ireland covering the European Economic Area (EEA) and is an approved Mastercard® issuer.
For customers that come from China, Payoneer operates by providing the offshore/non-resident part of the service being provided under the regulatory framework of Payoneer Inc. and the settlement leg in China being supported by entities regulated by the People’s Bank of China (“PBOC”) that are Payoneer partners, such as banks and payment service providers.
For example, Payoneer serves customers that are located in China by providing the offshore/non-resident part of the service under the regulatory framework of Payoneer Inc., while the local settlement leg in China is supported by Payoneer partners that are entities regulated by the People’s Bank of China (“PBOC”) and the State Administration of Foreign Exchange.
We are also subject to laws and regulations that apply to businesses in general, such as those relating to employment, consumer protection, worker confidentiality obligations and taxation.
The closing of this acquisition is subject to governmental registrations and approvals and customary closing conditions. 9 Table of Contents We are also subject to laws and regulations that apply to businesses in general, such as those relating to employment, consumer protection, data protection and privacy, worker confidentiality obligations and taxation.
Failure to comply with applicable data protection laws and regulations could subject us to fines and reputational harm.” Human Capital We are a company for entrepreneurs built by entrepreneurs. The people who work at Payoneer define Payoneer and enable our customers to participate in the global economy.
Failure to comply with applicable data protection laws and regulations could subject us to fines and reputational harm and could materially adversely affect our results of operations.” Human Capital We are a company for entrepreneurs built by entrepreneurs.
For example, in China we face competition from a number of local payment providers. In some cases, marketplaces will provide their own payment capabilities to support payments to sellers.
For example, in China we face competition from a number of local payment providers that serve the large greater China region. In some cases, marketplaces provide their own payment capabilities to support payments to sellers. Regulation Payments Regulation . Various laws and regulations govern the payments industry in the U.S. and globally.
Payoneer Payment Services UK Ltd is an Electronic Money Institution authorized by the United Kingdom’s Financial Conduct Authority and will start serving the United Kingdom prior to the end of Payoneer Europe Limited’s temporary permission. Payoneer Hong Kong Limited is a licensed Money Services Operator with the Customs and Excise Department in Hong Kong.
Payoneer Payment Services UK Ltd is an Electronic Money Institution authorized by the United Kingdom’s Financial Conduct Authority. Payoneer Hong Kong Limited is a licensed Money Services Operator with the Customs and Excise Department in Hong Kong. Payoneer Japan Limited is a Registered Fund Transfer Service Provider with the Kanto Finance Bureau in Japan.
Many of our customers find significant value in the ability to hold and transact in multiple currencies, particularly if they are doing business from countries or regions that face significant macro uncertainties and/or currency fluctuations. Physical & Virtual Commercial Cards Payoneer SMB customers can use physical or virtual cards to access the balances in their Payoneer Account.
Our customers find significant value in the ability to hold and transact in multiple currencies, particularly if they are doing business in or with countries or regions that face significant macro uncertainty, banking instability and/or currency fluctuations.
In addition, we have a large SMB customer base that maintains long-term relationships with Payoneer, which offers us the opportunity to acquire companies with synergistic product offerings for our customers. We have built a team to lead our efforts to identify strategic growth opportunities that we believe are best suited to pursue through acquisition.
We have a large SMB customer base that maintains long-term relationships with Payoneer. This offers us the opportunity to acquire companies with synergistic product and service offerings that meet the broad and complex needs of our customers. We have built a team that is focused on leading our efforts to identify strategic growth opportunities.
We use these data insights to build additional services, which in turn accelerate commercial activity, increase volume, bring more customers into our network, and further strengthen our ecosystem.
Payoneer uses data insights to build and market additional features and services, which in turn accelerates commercial activity, increases volume, brings more customers into our network, and further strengthens and grows our ecosystem.
Our annual compensation planning takes place right after our year-end performance review process where employees and managers share feedback to facilitate professional and career development and set professional and development goals for the year to come, and make performance-based rewards decisions.
Our annual compensation planning 11 Table of Contents takes place right after our year-end performance review process where employees and managers share feedback to facilitate professional and career development and set professional and development goals for the year to come. Payoneer’s Global Week of Good Our workforce is passionate about serving the communities in which we live, work and operate.
Once the funds are in the Global Multi-Currency Account, they are available to the customer in the currency in which they were originally received and free to use as the customer decides, including repatriating to their home market, withdrawing into a local bank account or paying their suppliers.
Once the funds are in the SMB’s Payoneer Account, they are available to use as the customer decides, including by withdrawing into a local bank account, paying their suppliers and vendors or converting into different currencies before transferring.
In the 18 years since our founding, we have built a global financial platform that has already made it easier for millions of SMBs, particularly in emerging markets, to pay and get paid, manage their funds, and grow their business.
Payoneer was founded in 2005 and in the 19 years since the Company’s founding, we have built a global financial stack that makes it easier for millions of SMBs, particularly in emerging markets, to access global demand and supply, pay and get paid, and manage their cross border and other needs from a single platform.
These Mass Payout services enable enterprises to pay sellers across the world with a broad set of localized payment methods including local bank payments, international wires, mobile wallets, physical and virtual cards and paper checks, and enable them to pay in local currencies and directly into bank accounts. ​ B2B Accounts Payable / Accounts Receivable (AP/AR) Services Payoneer offers B2B AP/AR services to enable SMBs the ability to pay and get paid by their trading partners around the world quickly, locally and cost-effectively.
Enterprise Services Payoneer provides marketplaces and other enterprises with Mass Payout services that enable them to pay sellers across the world via a broad set of localized and other payment methods including local bank payments, international wires, payments to mobile wallets and to physical and virtual cards and paper checks.
These include enabling SMBs to pay their suppliers one by one or in bulk, create and manage invoices, bill customers in multiple currencies, and enable buyers to pay with convenient local or global payment methods, regardless of where the seller comes from. Global Multi-Currency Account The core Global Multi-Currency Payoneer Account enables SMBs to receive payments in multiple currencies.
This is a $6 trillion volume opportunity based on third-party research conducted in 2022. We enable SMBs to pay their suppliers one by one or in bulk, create and manage invoices, bill customers in multiple currencies, and enable buyers to pay with convenient local or global payment methods, regardless of where the seller is located.
Digitalization is Accelerating More people and businesses are engaging a greater amount of their activities online than ever before, driving the rapid growth of digital commerce for businesses and consumers all over the world.
Digital Commerce is Accelerating More people and businesses are conducting a greater amount of their activities online than ever before, driving the rapid growth of digital commerce globally. This long term secular trend further accelerated in the years following the COVID-19 pandemic as consumers and businesses shifted more activities online.
They are exporters selling goods cross-border to consumers and businesses, freelancers and businesses capitalizing on the digitization of the workplace and remote work, services companies exporting their capability to international clients, vacation rental hosts reopening after the pandemic, and digital creators delivering their content to customers around the world and more.
Customers include goods exporters selling cross-border to consumers and other businesses, services companies exporting their capabilities to international clients, independent professionals, creators, and contractors capitalizing on the digitization of the workplace and remote work, vacation rental hosts, and businesses working with suppliers and vendors from different countries in different currencies.
Data Protection & Privacy Regulations : As a company operating a global cross-border digital payment platform, we collect, process, store, share, disclose, transfer, retain and/or use personal information and other data in connection with conducting our business, including for purposes of marketing our services and products via the phone, email and text messages and verifying the identity of individuals within the framework of our know your customer (KYC) processes, which processes are required as part of our robust, risk-based compliance program that addresses the regulatory requirements of each country involved in a cross-border payment on our platform.
Data Protection & Privacy Regulations . We collect, process, store, share, disclose, transfer, retain and/or use personal information and other data in connection with conducting our business, including for purposes of marketing our services and products via phone, email and text messages and pursuant to applicable requirements we are subject to, to verify the identity of our customers.
Payoneer terms and conditions are provided to our customers from one or more of our regulated entities, each of which is obligated to implement compliance programs, protect customer funds and meet the other regulatory obligations under the supervision and oversight of the local regulators.
Each of our regulated entities is obligated to implement compliance programs, protect customer funds and meet other regulatory obligations under the supervision and oversight of the local regulators. 6 Table of Contents Sophisticated Global Banking and Treasury Infrastructure Payoneer has invested significantly in building a resilient, global proprietary payment infrastructure.
Most traditional financial institutions and even modern fintech companies lack experience in emerging markets and the ability to manage scaled customer onboarding and risk management to cover the world.
Traditional financial institutions serving SMBs, and even modern fintech companies often lack experience in emerging markets and lack the ability to manage scaled customer onboarding and a global risk management program. Compliance programs must address global challenges and multiple regulatory frameworks designed to prevent money laundering and terrorist financing.
We also have regulatory authorizations in India, where we act as an Online Payment Gateway Service Provider, approved by the Reserve Bank of India.
Payoneer Singapore Pte Limited is licensed by the Monetary Authority of Singapore as a Major Payment Institution. Payoneer Australia Pty Limited is licensed by the Australian Securities and Investment Commission to deal in non-cash payment products. We also have regulatory authorizations in India, where we act as an Online Payment Gateway Service Provider, approved by the Reserve Bank of India.
The legal and regulatory requirements applicable to us are extensive, complex, frequently changing, and increasing in number, and may impose overlapping and/or conflicting requirements or obligations. Where we do not have an operational licensed subsidiary, Payoneer typically relies on locally-licensed or regulated banks and payment partners to facilitate transactions in certain jurisdictions where Payoneer is not locally regulated.
The legal and regulatory requirements applicable to us are extensive, complex, frequently changing, and increasing in number, and may impose overlapping and/or conflicting requirements or obligations.
We work with more than 80 banks and payment providers and are connected into well over 100 local clearing systems through which we can deliver payments locally to customers, in exact amounts, in their local currency.
We work with close to 100 banks and payment service providers and through those local partners are connected to over 100 local clearing systems, allowing us to deliver payments efficiently in the local markets in which our customers operate.
We foster an entrepreneurial culture so that we may remain focused and innovative over time to ensure success as a trusted partner to our customers. Our Global Team, Culture and Values We believe the employees and culture of Payoneer are critical to our success and our ability to grow our business, support our customers and deliver shareholder value.
Our team draws from a broad spectrum of backgrounds and experiences across technology, financial services and other areas. Our Global Team and Culture We believe the employees and culture of Payoneer are critical to our success and our ability to grow our business, support our customers and partners, and deliver shareholder value.
Some of our customers use physical cards to access their funds through local ATM networks, make purchases online and in-store at local businesses or pay business expenses. Our Digital Purchasing Card, launched in late 2020 in partnership with Mastercard, is a virtual commercial card product designed for our customers to make purchases for their key expenses.
Our customers use physical cards to access their funds through local ATM networks, make purchases online and in-store at local businesses or to pay business expenses. Payoneer Checkout Payoneer Checkout enables SMBs to accept payments from customers around the world via their web store.
They use Payoneer to manage their funds in the currencies they want and need, and move their money where it needs to go. They can send funds to their local bank account, pay for expenses using our Commercial Mastercard, make payments through our In-Network ecosystem, and pay suppliers. They can also access working capital from Payoneer to invest for growth.
They can send funds to their local bank accounts, pay for expenses using our card products, make payments through our in-network ecosystem, and pay suppliers and workers in multiple currencies. They can also access working capital from Payoneer. Every payment a business accepts or makes also creates an opportunity for us to develop a deeper understanding of their business.
This creates challenges for financial institutions and other companies that look to serve these global platforms. Payoneer has built robust compliance infrastructure and has nearly two decades of experience navigating the risk challenges associated with cross-border payments, particularly into emerging markets. The Payoneer Account for SMBs Payments are at the heart of commerce and are the foundation of our ecosystem.
There are few solutions available to SMBs that provide a comprehensive global solution. We believe this presents a significant competitive advantage for Payoneer as we have built robust compliance infrastructure, grounded in a ‘compliance first’ approach, and have nearly two decades of experience navigating the challenges associated with cross-border payments, particularly into emerging markets.
Data Creates Competitive Advantages and Delivers Value to Customers We have built machine-learning models leveraging the data that we collect in the ordinary course of our operations and services in a manner compliant with applicable privacy and data protection rules and regulations. These models enable us to make informed predictions to better serve our customers’ needs.
In addition, we have extensive regulatory and banking infrastructure to support our enterprise customers and marketplace partners in each of the jurisdictions in which we operate. Data Creates Competitive Advantages and Delivers Value to Customers Payoneer has built machine-learning models leveraging the data that we collect in the ordinary course of our operations and services.
Global Regulatory and Compliance Requirements are Constantly Evolving Global cross-border payments are a highly regulated industry and continuous changes in the regulatory and compliance landscape means scale, expertise, and technology are critical to doing business successfully.
Businesses are also increasingly diversifying and globalizing their supply chains to access high-quality, lower-cost products and materials, and to strengthen their business resiliency. Global Regulatory and Compliance Requirements are Constantly Evolving The provision of cross-border payment services is complex and highly regulated, and ongoing changes in the regulatory landscape means scale, expertise, and technology enabled processes are critical to success.
The risk of abuse is presented in large part through customers. Payoneer makes reasonable efforts appropriate to the circumstances to know its customers. Therefore, Payoneer has adopted a “Know Your Customer” (“KYC”) program to assist in managing its Anti-Money Laundering/Counter-Terrorism Financing (“AML/CTF”) risk. The KYC program is a critical component of the AML/CTF Program.
Payoneer makes reasonable efforts appropriate to the circumstances to know and verify its customers and to monitor customer activity. The KYC program is a critical component of the AML/CTF Program.
Overview Payoneer is a financial technology company empowering the world’s small and medium-sized businesses (“SMB(s)”) to transact, do business and grow globally. Payoneer was founded in 2005 with the belief that talent is equally distributed, but opportunity is not. It is our mission to enable anyone anywhere to participate and succeed in the global digital economy.
Overview Payoneer is a financial technology company purpose-built to enable the world’s small and medium-sized businesses (“SMB(s)”) to grow and operate their businesses around the world by reliably and securely connecting them to the global digital economy.
Working Capital Payoneer has introduced services to provide SMBs with access to working capital with amounts advanced ranging from $50 to more than $1 million. We leverage machine learning models and underwriting processes that enable us to effectively manage risk while providing a valuable service to our customers.
We leverage machine learning models and underwriting processes to effectively manage risk while providing a valuable service to our customers. We fund these working capital advances through a mix of balance sheet cash and borrowings under our warehouse financing facility.
At the same time however, global businesses routinely have to deal with local requirements in each of the markets with which they trade, requiring them to manage multiple strategic banking relationships globally and resulting in increased cost and delay.
This is creating a need for new payment and commerce-enabling solutions to support these businesses. At the same time, businesses serving overseas customers must deal with complex local requirements in each of the markets in which they do business, often need to manage multiple banking relationships globally and face inefficiency and high transactional costs.
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Payoneer’s cross-border payment solutions makes it easier for SMBs to pay and get paid quickly, reliably, and cost-effectively, regardless of where they do business. Our core value proposition for customers is the Payoneer Account, which is a secure, regulated payment infrastructure platform that offers a global, multi-currency account to businesses of any size from almost every country.
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Our financial stack provides a full suite of cross-border accounts receivable (AR) and accounts payable (AP) capabilities and includes services such as working capital and the provision of data-driven insights. Payoneer’s core value proposition is that we remove the complexity and barriers of doing business across borders for our customers.
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Payoneer serves SMBs worldwide in a wide variety of industries.
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With a multi-currency Payoneer Account, businesses around the world can serve and transact with their overseas customers, suppliers, vendors, and partners as if they were local. The Payoneer financial stack is comprised of a secure, regulated payment infrastructure platform that provides customers with a one-stop, global, multi-currency account to serve their comprehensive AR and AP needs.
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Our SMB customers have similar financial needs to larger companies, including the need to find customers, manage their business, get paid quickly and reliably and make cost-effective payments everywhere they do business, manage their supply chain, identify new growth opportunities, access capital, and manage risk.
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Payoneer’s global platform is built with a focus on security, stability and redundancy. The Company leverages nearly 100 banking and payment service providers globally to support transactions in over 7,000 trade corridors and enable same-day and real-time settlement in over 150 countries.
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Payoneer provides a broad range of services to enable SMBs to more easily build, manage, and grow their business globally. We built a financial network for the future of global trade which spans more than 190 countries and territories. In 2022, Payoneer supported transactions in over 7,000 unique trade corridors and enabled local settlement in more than 100 countries.
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Payoneer serves SMBs located in more than 190 countries and territories and operating in a wide variety of industries. We have approximately 2 million active customers, including over 500,000 who meet our ideal customer profile (as further defined below).
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Our global platform is built on bank-grade security, stability and redundancy. Our ability to reach and serve customers at scale is supported by our modern technology infrastructure, our ability to offer a broad product suite, a global operations team, and data and machine learning capabilities. We have also built a meaningful brand in the global digital commerce ecosystem.
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Payoneer has built a meaningful brand and efficient go-to-market engine that enables us to drive customer acquisition through a diverse range of channels. We leverage our global partnerships and enterprise relationships, deep local knowledge and sales presence, product- and customer-driven network effects, and organic traffic to our website.
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This awareness allows us greater leverage with our marketing efforts. The majority of new customers that sign up to Payoneer come organically to our website, and we get many additional customers from customer referrals and via our partners. This reduces our cost of customer acquisition, improving the efficiency of our sales and marketing efforts.
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This supports an efficient customer acquisition model and enables us to differentiate our efforts based on different segments. Payoneer has delivered strong growth: in the year ended December 31, 2023, our volume and revenue grew by 11% and 32%, respectively, compared to the year ended December 31, 2022.
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In addition, we have sales teams based in key market hubs around the world, host dozens of virtual and physical events annually that attract tens of thousands of businesses to help them connect and learn about new growth opportunities, and market online in targeted channels. We have grown rapidly since our founding.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeGovernments may impose new regulatory requirements in a range of areas that, among other things, may: ● Prohibit, restrict, and/or impose taxes or fees on our services, including to or from certain countries or with certain individuals, and entities; ● Impose additional customer identification and due diligence requirements; ● Impose additional reporting or record keeping requirements, or require enhanced transaction monitoring; ● Limit the types of entities capable of providing money transmission services, or impose additional licensing or registration requirements; ● Impose minimum capital or other financial requirements; ● Limit or restrict the revenue that may be generated from transmitting money, processing payments, or factoring receivables, including interest earned on customer funds, transaction fees, and revenue generated from foreign exchange transactions; ● Require enhanced disclosures to customers; ● Limit the number or principal amount of money transmission transactions that may be sent to or from a jurisdiction, whether by an individual or in the aggregate; and ● Restrict or limit the ability of firms to process transactions using a centralized record keeping system located outside of the jurisdiction in which the customer is located, requiring that data associated be localized in the same jurisdiction as the customer.
Biggest changeGovernments and regulators may impose new regulatory requirements in a range of areas that, among other things, may: ● Prohibit, restrict, and/or impose taxes or fees on our services, including to or from certain countries or with certain individuals, and entities; ● Impose additional customer identification and due diligence requirements; ● Impose additional reporting or record keeping requirements, or require enhanced transaction monitoring; ● Limit the types of entities capable of providing money transmission services, or impose additional licensing or registration requirements; ● Impose minimum capital or other financial requirements; ● Limit or restrict the revenue that may be generated from transmitting money, processing payments, or factoring receivables, including interest earned on customer funds, transaction fees, and revenue generated from foreign exchange transactions; ● Require enhanced disclosures to customers; ● Limit the number or principal amount of money transmission transactions that may be sent to or from a jurisdiction, whether by an individual or in the aggregate; and ● Restrict or limit the ability of firms to process transactions using a centralized record keeping system located outside of the jurisdiction in which the customer is located, requiring that data associated be localized in the same jurisdiction as the customer. 28 Table of Contents Any failure or perceived failure to comply with existing or new laws and regulations (including changes to or expansion of the interpretation of those laws and regulations), including those discussed in this risk factor, may subject us to significant fines, penalties, criminal and civil lawsuits, forfeiture of significant assets, and other enforcement actions in one or more jurisdictions; result in additional compliance and licensure requirements; increase regulatory scrutiny of our business; restrict our operations; force us to change our business practices, make product or operational changes or delay planned product launches or improvements.
Item 1A. Risk Factors. ​ Our business is subject to numerous risks and uncertainties that you should be aware of in evaluating our business. If any such risks and uncertainties actually occur, our business, prospects, financial condition and results of operations could be materially and adversely affected. The risks described below are not the only risks that we face.
Item 1A. Risk Factors. ​ Our business is subject to numerous risks and uncertainties that you should be aware of in evaluating our business. If any such risks and uncertainties actually occur, our business, prospects, financial condition and results of operations could be materially adversely affected. The risks described below are not the only risks that we face.
If any such risks and uncertainties actually occur, our business, prospects, financial condition and results of operations could be materially and adversely affected. The risks summarized above or described in full below are not the only risks that we face.
If any such risks and uncertainties actually occur, our business, prospects, financial condition and results of operations could be materially adversely affected. The risks summarized above or described in full below are not the only risks that we face.
If we are unable to anticipate or respond or adapt to technological or regulatory changes or evolving industry standards and demands on a timely basis, our ability to remain competitive could be materially and adversely affected.
If we are unable to anticipate or respond or adapt to technological or regulatory changes or evolving industry standards and demands on a timely basis, our ability to remain competitive could be materially adversely affected.
In addition, the growth of our business depends in part on existing customers expanding their use of our products and services. If we are unable to encourage customers to broaden their use of our services, our growth may slow or stop, and our business may be materially and adversely affected.
In addition, the growth of our business depends in part on existing customers expanding their use of our products and services. If we are unable to encourage customers to broaden their use of our services, our growth may slow or stop, and our business may be materially adversely affected.
Any changes in these systems that degrade the functionality of our products and services, impose additional costs or requirements, or give preferential treatment to competitors’ services, including their own services, could materially and adversely affect usage of our products and services.
Any changes in these systems that degrade the functionality of our products and services, impose additional costs or requirements, or give preferential treatment to competitors’ services, including their own services, could materially adversely affect usage of our products and services.
Furthermore, if our risk management policies and processes contain errors or are otherwise ineffective, we may suffer large financial losses, we may be subject to civil and criminal liability, and our business may be materially and adversely affected. Our results of operations may be adversely affected by changes in foreign currency exchange rates.
Furthermore, if our risk management policies and processes contain errors or are otherwise ineffective, we may suffer large financial losses, we may be subject to civil and criminal liability, and our business may be materially adversely affected. Our results of operations may be materially adversely affected by changes in foreign currency exchange rates.
Any change in regulation or legal requirements in China that restricts the services we can provide to customers operating in China may lead to a decrease in revenue and materially and adversely affect our results of operation and financial condition.
Any change in regulation or legal requirements in China that restricts the services we can provide to customers operating in China may lead to a decrease in revenue and materially adversely affect our results of operation and financial condition.
The failure of our third-party service providers to perform their obligations and provide the products and services we obtain from them in a timely manner for any reason could adversely affect our operations and profitability due to, among other consequences: loss of revenues; loss of customer data, including PII; fines imposed by payment networks; harm to our business or reputation resulting from negative publicity; exposure to fraud losses or other liabilities; additional operating and development costs; or diversion of management, technical and other resources.
The failure of our third-party service providers to perform their obligations and provide the products and services we obtain from them in a timely manner for any reason could materially adversely affect our operations and profitability due to, among other consequences: loss of revenues; loss of customer data, including PII; fines imposed by payment networks; harm to our business or reputation resulting from negative publicity; exposure to fraud losses or other liabilities; additional operating and development costs; or diversion of management, technical and other resources.
The GDPR (and GDPR as it forms part of retained European law (as defined in the European Union (Withdrawal) Act 2018) (UK GDPR)), introduced more stringent requirements (which will continue to be interpreted through guidance and decisions over the coming years) and requirements on organizations to erase or rectify an individual’s information upon request, implement mandatory data breach notifications and applies obligations on service providers and strict protections on how data may be transferred outside of the EEA.
The GDPR (and GDPR as it forms part of retained European law (as defined in the European Union (Withdrawal) Act 2018) (UK GDPR)), introduced more stringent requirements (which are and will continue to be interpreted through guidance and decisions over the coming years) on organizations to erase or rectify an individual’s information upon request, implement mandatory data breach notifications and applies obligations on service providers and strict protections on how data may be transferred outside of the EEA.
Our products and services require sophisticated knowledge of the financial services industry, applicable regulatory and industry requirements, computer systems, and software applications, and if we cannot hire or retain the necessary skilled personnel, we could suffer delays in new product development, experience difficulty complying with applicable requirements or otherwise fail to satisfy our customers’ demands. ​ Acquisitions, joint ventures or other strategic transactions create certain risks and may adversely affect our business, financial condition or results of operations.
Our products and services require sophisticated knowledge of the financial services industry, applicable regulatory and industry requirements, computer systems, and software applications, and if we cannot hire or retain the necessary skilled personnel, we could suffer delays in new product development, experience difficulty complying with applicable requirements or otherwise fail to satisfy our customers’ demands. ​ Acquisitions, joint ventures or other strategic transactions create certain risks and may materially adversely affect our business, financial condition or results of operations.
Alternatively, if a court were to find the choice of forum provision contained in the certificate of incorporation and bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition. ​ Item 1B. Unresolved Staff Comments. None.
Alternatively, if a court were to find the choice of forum provision contained in the certificate of incorporation and bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially harm our business, operating results and financial condition. Item 1B. Unresolved Staff Comments. None.
Further, while we select our third-party service providers carefully, we do not control their actions. Any problems experienced by these third-parties, including those resulting from breakdowns or other disruptions in the services provided by such parties or cyber-attacks and security breaches, could adversely affect our ability to service our customers or otherwise conduct our business.
Further, while we select our third-party service providers carefully, we do not control their actions. Any problems experienced by these third-parties, including those resulting from breakdowns or other disruptions in the services provided by such parties or cyber-attacks and security breaches, could materially adversely affect our ability to service our customers or otherwise conduct our business.
Our systems and operations or those of our third-party service providers and software providers could be exposed to damage or interruption from, among other things, fire, natural disaster, power loss, telecommunications failure, unauthorized entry, computer viruses, denial-of-service attacks, acts of terrorism, human error, vandalism or sabotage, financial insolvency, bankruptcy and similar events.
Our systems and operations or those of our third-party service providers and software providers could be exposed to damage or interruption from, among other things, fire, natural disaster, power loss, telecommunications failure, unauthorized entry, computer viruses, denial-of-service attacks, cyber attacks, acts of terrorism, human error, vandalism or sabotage, financial insolvency, bankruptcy and similar events.
In the event our agreement with a third-party financial institution or non-financial institution is terminated, or if upon its expiration we are unable to renew the contract on terms favorable to us, or at all, it may be difficult for us to replace these services which may adversely affect our operations and profitability.
In the event our agreement with a third-party financial institution or non-financial institution is terminated, or if upon its expiration we are unable to renew the contract on terms favorable to us, or at all, it may be difficult for us to replace these services which may materially adversely affect our operations and profitability.
The foregoing could, individually or in the aggregate, expose us to significant liability, impose significant costs, require us to expend substantial resources, increase the cost and complexity of compliance, damage our brand and business, make our products and services less attractive, result in the loss of customers, limit our ability to grow the business, adversely affect our results of operations, and harm our reputation.
The foregoing could, individually or in the aggregate, expose us to significant liability, impose significant costs, require us to expend substantial resources, increase the cost and complexity of compliance, damage our brand and business, make our products and services less attractive, result in the loss of customers, limit our ability to grow the business, materially adversely affect our results of operations, and harm our reputation.
If we fail to comply with the applicable requirements of our counterparty financial institutions and banking partners, they could seek to suspend or terminate our accounts, which could adversely affect our business. We rely on agreements and relationships with banks and other financial institutions in jurisdictions in which we serve customers to collect, hold and disburse our customers’ funds.
If we fail to comply with the applicable requirements of our counterparty financial institutions and banking partners, they could seek to suspend or terminate our accounts, which could materially adversely affect our business. We rely on agreements and relationships with banks and other financial institutions in jurisdictions in which we serve customers to collect, hold and disburse our customers’ funds.
There is little legal precedent in this area and any actual or claimed requirement to disclose our proprietary source code or pay damages for breach of contract could harm our business and could help third parties, including our competitors, develop products and services that are similar to or better than ours.
There is little legal precedent in this area and any actual or claimed requirement to disclose our proprietary source code or pay damages for breach of contract could materially harm our business and could help third parties, including our competitors, develop products and services that are similar to or better than ours.
The complexity of existing U.S. federal and state and foreign regulatory and enforcement regimes, coupled with the global scope of our operations and the evolving U.S. and international regulatory environment, could result in a single event giving rise to a large number of overlapping investigations and legal and regulatory proceedings by multiple government authorities in different jurisdictions.
The complexity of existing U.S. federal and state and foreign regulatory and enforcement regimes, coupled with the global scope of our operations and the evolving U.S. and international regulatory environment, could result in a single event giving rise to a large number of overlapping investigations and legal and regulatory proceedings and enforcement actions by multiple government authorities in different jurisdictions.
Any transactions we process in violation of OFAC sanctions regulations could result in claims or actions against us including litigation, injunctions, damage awards, fines or penalties, or require us to change our business practices that could result in a material loss, require significant management time, result in the diversion of significant operational resources or otherwise harm our business.
Any transactions we process in violation of OFAC sanctions regulations could result in claims or actions against us including litigation, injunctions, damage awards, fines or penalties, or require us to change our business practices that could result in a material loss, require significant management time, result in the diversion of significant operational resources or otherwise materially harm our business.
Because we rely on third parties to provide services, including financial institutions and payment service providers, we could be adversely impacted if they fail to fulfill their obligations or if our arrangements with them are terminated and suitable replacements cannot be found on commercially reasonable terms or at all.
Because we rely on third parties to provide services, including financial institutions and payment service providers, we could be materially adversely impacted if they fail to fulfill their obligations or if our arrangements with them are terminated and suitable replacements cannot be found on commercially reasonable terms or at all.
We could be required to collect additional sales, use, value added, digital services, equalization levy or other similar taxes, either direct or indirect, or be subject to other liabilities that may increase the costs our customers would have to pay for our products and adversely affect our results of operations.
We could be required to collect additional sales, use, value added, digital services, equalization levy or other similar taxes, either direct or indirect, or be subject to other liabilities that may increase the costs our customers would have to pay for our products and services and materially adversely affect our results of operations.
These defenses could discourage, delay or prevent a transaction involving a change in control of the combined company. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and cause us to take corporate actions other than those you desire.
These defenses could discourage, delay or prevent a transaction involving a change in control of the Company. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and cause us to take corporate actions other than those you desire.
Failure to effectively deal with bad, fraudulent or fictitious transactions and material internal or external fraud could negatively impact our business. We have been, and may in the future be, subject to liability for fraudulent transactions, including electronic payments and card transactions or credits initiated by customers.
Failure to effectively deal with bad, fraudulent or fictitious transactions and material internal or external fraud could materially negatively impact our business. We have been, and may in the future be, subject to liability for fraudulent transactions, including electronic payments and card transactions or credits initiated by customers.
Substantial and increasingly intense competition in the worldwide financial services and payments industry, including on pricing and payment alternatives, could adversely affect our margins, business and results of operations. Competitive activity by our partners and enterprise customers that insource payment services or directly compete against our services could adversely affect our business.
Substantial and increasingly intense competition in the worldwide financial services and payments industry, including on pricing and payment alternatives, could materially adversely affect our margins, business and results of operations. Competitive activity by our partners and enterprise customers that insource payment services or directly compete against our services could materially adversely affect our business.
In addition, our products and services may themselves be targets of cyberattacks that attempt to sabotage or otherwise disable them, or the defensive and preventative measures we take ultimately may not be able to effectively detect, prevent, or protect against or otherwise mitigate losses from all cyberattacks.
In addition, our products, services and customers may themselves be targets of cyberattacks that attempt to sabotage or otherwise disable them, and the defensive and preventative measures we take ultimately may not be able to effectively detect, prevent, or protect against or otherwise mitigate losses from all cyberattacks.
If we are unable to maintain appropriate disclose controls or internal controls and procedures over financial reporting, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements and adversely affect our operating results.
If we are unable to maintain appropriate disclose controls or internal controls and procedures over financial reporting, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements and materially adversely affect our operating results.
We have experienced and will likely continue to experience denial-of-service and other cyberattacks, system failures, security incidents, and other events or conditions that interrupt the availability or reduce the speed or functionality of our products and services. These events may result in loss of revenue.
We have experienced and will likely continue to experience denial-of-service and other cyberattacks, system failures, security incidents, and other events or conditions that interrupt the availability or reduce the speed or functionality of our products and services. These events may result in material loss of revenue.
Climate change and environmental issues could adversely affect our operations, business, customers and partners. Concerns over the risks associated with climate change and environmental matters have been growing in recent years, and are at the center of rapidly evolving rule-making in the United States and abroad.
Climate change and environmental issues could materially adversely affect our operations, business, customers and partners. Concerns over the risks associated with climate change and environmental matters have been growing in recent years, and are at the center of rapidly evolving rule-making in the United States and abroad.
Our share price may decline if our actual results do not match the projections of these securities research analysts. If a substantial number of shares become available for sale and are sold in a short period of time, the market price of our common stock could decline.
Our share price may decline if our actual results do not match the projections of these securities research analysts. If a substantial number of shares become available for sale and are sold in a short period of time, the market price of our common stock could materially decline.
To the extent we renew our existing marketplace and enterprise customer contracts or are required to adjust certain terms or components in existing contracts, such renewals or adjustments may be on less favorable terms than our existing contracts, which can impact revenue, expenses, profitability, and earnings.
To the extent we renew our existing marketplace and enterprise customer contracts or are required to adjust certain terms or components in existing contracts, such renewals or adjustments may be on less favorable terms than our existing contracts, which can materially impact revenue, expenses, profitability, and earnings.
In addition, our ability to optimize foreign exchange revenues as part of the payment delivery process may be adversely affected due to foreign exchange market and regulatory conditions outside of our control, as a result of which revenue and profit may decrease as compared to prior periods.
In addition, our ability to optimize foreign exchange revenues as part of the payment delivery process may be adversely affected due to foreign exchange market and regulatory conditions outside of our control, as a result of which revenue and profit may materially decrease as compared to prior periods.
Our rate of revenue growth has slowed at times in the past and may decline in the future, and it may slow or decline more quickly than we expect for a variety of reasons, including as a result of the risks described herein.
Our rate of revenue growth has slowed at times in the past and may decline in the future, and it may slow or decline more quickly or materially than we expect for a variety of reasons, including as a result of the risks described herein.
Our systems and our third-party providers’ systems may be subject to system failures or capacity constraints, and resulting interruptions in the availability of our platform, products, or services, including the accessibility of our solutions through mobile devices, could harm our business.
Our systems and our third-party providers’ systems may be subject to system failures or capacity constraints, and resulting interruptions in the availability of our platform, products, or services, including the accessibility of our solutions through mobile devices, could materially harm our business.
These breaches, or any perceived breach, may also result in damage to our reputation, negative publicity, loss of key business relationships and sales, increased costs to remedy any problem (including repairing system damage, increasing security protection costs by deploying additional personnel and modifying or enhancing our protection technologies and investigating and remediating any information security vulnerabilities) regulatory inquiries and investigations, customer complaints and costly litigation and legal expenses, and may therefore adversely impact market acceptance of our products and seriously affect our business, financial condition or results of operations.
These breaches, or any perceived breach, may also result in damage to our reputation, negative publicity, loss of key business relationships and sales, increased costs to remedy any problem (including repairing system damage, increasing security protection costs by deploying additional personnel and modifying or enhancing our protection technologies and investigating and remediating any information security vulnerabilities), regulatory inquiries and investigations, customer complaints and costly litigation and legal expenses, and may therefore adversely impact market acceptance of our products and materially adversely affect our business, financial condition or results of operations.
Our ability to refinance or restructure our debt and other obligations will depend upon the condition of the capital markets and our financial condition at such time, including rising interest rates, which could increase the cost of refinancing debt and incurring new debt.
Our ability to refinance or restructure our debt and other obligations will depend upon the condition of the capital markets and our financial condition at such time, including interest rates, which could increase the cost of refinancing debt and incurring new debt.
In addition, acquisitions outside of the United States often involve additional or increased risks including, for example: ● managing geographically separated organizations, systems and facilities; ● integrating personnel with diverse business backgrounds and organizational cultures; ● complying with non-U.S. regulatory requirements; ● fluctuations in currency exchange rates; ● enforcement and protection of intellectual property in some non-U.S. countries; ● difficulty entering new non-U.S. markets due to, among other things, consumer acceptance and business knowledge of these new markets; and ● general economic and political conditions.
In addition, transactions outside of the United States often involve additional or increased risks including, for example: managing geographically separated organizations, systems and facilities; integrating personnel with diverse business backgrounds and organizational cultures; complying with non-U.S. regulatory requirements; fluctuations in currency exchange rates; enforcement and protection of intellectual property in some non-U.S. countries; difficulty entering new non-U.S. markets due to, among other things, consumer acceptance and business knowledge of these new markets; and general economic and political conditions.
We have invested and will continue to invest in improving our platform in order to offer better or new features, products and services, but if those features, products and services fail to be successful, our growth may slow or decline.
We have invested and will continue to invest in improving our platform in order to offer better or new features, products and services, but if those features, products and services fail to be successful, our growth may materially slow or decline.
Failure to comply with anti-money laundering, anti-bribery, economic and trade sanctions regulations and similar laws, could subject us to penalties and other adverse consequences. We are subject to various anti-money laundering, anti-bribery, economic and trade sanctions regulations and similar laws, and our failure to comply with such laws and regulations could subject us to penalties and other adverse consequences.
We are subject to various anti-money laundering, anti-bribery, economic and trade sanctions regulations and similar laws, and our failure to comply with such laws and regulations could subject us to penalties and other material adverse consequences.
If we fail to maintain effective internal controls over financial reporting, we may be unable to accurately or timely report our financial condition or results of operations, which may adversely affect our business.
If we fail to maintain effective internal controls over financial reporting, we may be unable to accurately or timely report our financial condition or results of operations, which may materially adversely affect our business.
Competitive activity by our partners and enterprise customers that insource payment services or directly compete against our services could adversely affect our business. ● If we are unable to renew marketplace and enterprise customer contracts or to adjust certain contract components at favorable terms or we lose a significant enterprise or marketplace customer, or if an eCommerce marketplace were to prevent our customers from using our services to receive payments from such marketplace, our results of operations and financial condition may be adversely affected. ● We are subject to risks associated with changes in interest rates, which could adversely affect our results of operations. ● Our failure to manage our customer funds properly could harm our business. ● Declines in eCommerce utilization generally, and any factors that reduce cross-border trade or cross-border digital commerce, make such trade or commerce more difficult or diminish eCommerce sales and/or limit activity of 15 Table of Contents eCommerce marketplaces, could have a material adverse effect on our business, financial condition and results of operations. ● Inflation can have a significant adverse effect on our business and our customers. ● Failure to effectively deal with bad, fraudulent or fictitious transactions and material internal or external fraud could negatively impact our business. ● Use of our payment services for illegal purposes could harm our business. ● Because we rely on third parties to provide services, including financial institutions and payment service providers, we could be adversely impacted if they fail to fulfill their obligations or if our arrangements with them are terminated and suitable replacements cannot be found on commercially reasonable terms or at all. ● If we fail to comply with the applicable rules and policies of the payment network card schemes or the terms of a payment network card scheme license, they could seek to fine us, suspend us or terminate our participation license, which could adversely affect our business. ● If we fail to comply with the applicable requirements of our counterparty financial institutions and banking partners, they could seek to suspend or terminate our accounts, which could adversely affect our business. ● Our business may be adversely affected by geopolitical and other risks associated with global operations.
Competitive activity by our partners and enterprise customers that insource payment services or directly compete against our services could materially adversely affect our business. ● If we are unable to renew marketplace and enterprise customer contracts or to adjust certain contract components at favorable terms or we lose a significant enterprise or marketplace customer, or if an e-commerce marketplace were to prevent our customers from using our services to receive payments from such marketplace, our results of operations and financial condition may be materially adversely affected. ● We are subject to risks associated with changes in interest rates, which could materially adversely affect our results of operations. ● Our failure to manage our customer funds properly could materially harm our business. ● Declines in e-commerce utilization generally, and any factors that reduce cross-border trade or cross-border digital commerce, make such trade or commerce more difficult or diminish e-commerce sales and/or limit activity of e-commerce marketplaces, could have a material adverse effect on our business, financial condition and results of operations. ● Inflation can have a material adverse effect on our business and our customers. ● Failure to effectively deal with bad, fraudulent or fictitious transactions and material internal or external fraud could materially negatively impact our business. ● Use of our payment services for illegal purposes could materially harm our business. ● Because we rely on third parties to provide services, including financial institutions and payment service providers, we could be materially adversely impacted if they fail to fulfill their obligations or if our arrangements with them are terminated and suitable replacements cannot be found on commercially reasonable terms or at all. ● If we fail to comply with the applicable rules and policies of the payment network card schemes or the terms of a payment network card scheme license, they could seek to fine us, suspend us or terminate our participation license, which could materially adversely affect our business. ● If we fail to comply with the applicable requirements of our counterparty financial institutions and banking partners, they could seek to suspend or terminate our accounts, which could materially adversely affect our business. ● Our business may be materially adversely affected by geopolitical and other risks associated with global operations.
Given uncertainty around these rules, we could experience discriminatory or anticompetitive practices that could impede both our and our merchants’ growth, increase our costs or adversely affect our business.
Given uncertainty around these rules, we could experience discriminatory or anticompetitive practices that could impede both our and our merchants’ growth, increase our costs or materially adversely affect our business.
Several foreign jurisdictions, including the European Economic Area (EEA) member states and the United Kingdom, have laws and regulations which are more restrictive in certain respects than those in the United States. For example, the EU General Data Protection Regulation, or GDPR, which came into force on May 25, 2018, implemented stringent operational requirements for the use of personal data.
Several foreign jurisdictions, including the European Economic Area (EEA) member states and the United Kingdom, have laws and regulations which are more restrictive in certain respects than those in the United States. For example, the EU General Data Protection Regulation, or GDPR, which came into force on May 25, 2018, implemented stringent operational requirements for the processing of personal data.
In this regard, we continue to dedicate internal resources, potentially engage outside consultants, implement a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing whether such controls are functioning as documented, and implement a continuous reporting and improvement process for internal control over financial reporting.
In this regard, we continue to dedicate internal resources, engage outside consultants, implement a detailed work plan to assess and document the adequacy of internal control over financial reporting, take steps to improve control processes as appropriate, validate through testing whether such controls are functioning as documented, and implement a continuous reporting and improvement process for internal control over financial reporting.
It is possible that competitive pressures will result in us absorbing a portion of such increases in the future, or result in us not being able to increase our own fees, which would increase our operating costs, reduce our profit margin, limit our growth, and adversely affect our business, results of operations and financial condition.
It is possible that competitive pressures will result in us absorbing a portion of such increases in the future, or result in us not being able to increase our own fees, which would increase our operating costs, reduce our profit margin, limit our growth, and may materially adversely affect our business, results of operations and financial condition.
We could also be subject to liability for claims relating to misuse of PII, such as unauthorized marketing purposes and violation of consumer protection or data privacy laws. In addition, federal and state regulations may require us to notify individuals of data security incidents involving certain types of PII or information technology systems.
We could also be subject to liability for claims relating to misuse of PII, such as unauthorized marketing purposes and violation of consumer protection or data privacy laws. In addition, federal, state and foreign rules and regulations may require us to notify individuals of data security incidents involving certain types of PII or information technology systems.
Should the rate of growth of our customers’ business slow or decline, this could have an adverse effect on volumes processed and therefore an adverse effect on our results of operations. In addition, we experience customer attrition as a result of several factors, including business closures, transfers of customer accounts to our competitors and account closures that we initiate.
Should the rate of growth of our customers’ business slow or decline, this could have a material adverse effect on volumes processed and therefore on our results of operations. In addition, we experience customer attrition as a result of several factors, including business closures, transfers of customer accounts to our competitors and account closures that we initiate.
General Risks Related to Payoneer From time to time we are subject to various legal proceedings which could adversely affect our business, financial condition or results of operations. We are involved in various litigation matters from time to time. Such matters can be time-consuming, divert management’s attention and resources and cause us to incur significant expenses.
General Risks Related to Payoneer We may be subject to various legal proceedings which could materially adversely affect our business, financial condition or results of operations. We are involved in various litigation matters from time to time. Such matters can be time-consuming, divert management’s attention and resources and cause us to incur significant expenses.
Summary of the Material Risks Associated with Our Business These risks include, but are not limited to, the following: ● Our business depends on our strong and trusted brand, and failure to maintain and protect our brand, or any damage to our reputation, or the reputation of our partners, could adversely affect our business, financial condition or results of operations. ● Our success depends on our ability to develop products and services to address or adapt to the rapidly evolving markets that we serve, and if we are not able to implement successful enhancements and new features for our platform, products and services, we could lose customers or have trouble attracting new customers, and our ability to grow may be limited. ● Substantial and increasingly intense competition in the worldwide financial services and payments industry, including on pricing and payment alternatives, could adversely affect our margins, business and results of operations.
Summary of the Material Risks Associated with Our Business These risks include, but are not limited to, the following: ● Our business depends on our strong and trusted brand, and failure to maintain and protect our brand, or any damage to our reputation, or the reputation of our partners, could have a material adverse effect on our business, financial condition or results of operations. ● Our success depends on our ability to develop products and services to address or adapt to the rapidly evolving markets that we serve, and if we are not able to implement successful enhancements and new features for our platform, products and services, we could lose customers or have trouble attracting new customers, and our ability to grow may be limited. ● Substantial and increasingly intense competition in the worldwide financial services and payments industry, including on pricing and payment alternatives, could materially adversely affect our margins, business and results of operations.
Any threatened or resulting claims could result in reputational harm, and any resulting liabilities, loss of transaction volume, or increased costs could harm our business.
Any threatened or resulting claims could result in reputational harm, and any resulting liabilities, loss of transaction volume, or increased costs could materially harm our business.
For example, in some cases, including arrangements with large enterprise customers, we earn fees at a prescribed rate for only a portion of the contract term and may renegotiate the rate of fees for the remainder of the term, and we utilize certain incentive structures to compensate the marketplace or enterprise for customer acquisition.
For example, in some cases, including arrangements with large enterprise customers, we earn fees at a prescribed rate for only a portion of the contract term and may renegotiate the rate of fees for the remainder of the term. Additionally, with certain of our enterprise customers, we utilize certain incentive structures to compensate the marketplace or enterprise for customer acquisition.
Declines in eCommerce utilization generally, and any factors that reduce cross-border trade or cross-border digital commerce, make such trade or commerce more difficult or diminish eCommerce sales and/or limit activity of eCommerce marketplaces, could have a material adverse effect on our business, financial condition and results of operations.
Declines in e-commerce utilization generally, and any factors that reduce cross-border trade or cross-border digital commerce, make such trade or commerce more difficult or diminish e-commerce sales and/or limit activity of e-commerce marketplaces, could have a material adverse effect on our business, financial condition and results of operations.
In addition, the card networks could refuse to allow us to process through their networks. Any of the foregoing could materially adversely impact our business, financial condition or results of operations. Changes to these network rules or how they are interpreted could have a significant impact on our business and financial results.
In addition, the card networks could refuse to allow us to process through their networks. Any of the foregoing could materially adversely impact our business, financial condition or results of operations. Changes to these network rules or how they are interpreted could have a material impact on our business and financial results.
We are subject to a number of legal requirements, regulations, contractual obligations and industry standards regarding security, data protection and privacy and any failure to comply with these requirements, regulations, obligations or standards could have an adverse effect on our reputation, business, financial condition and operating results.
We are subject to a number of legal requirements, regulations, contractual obligations and industry standards regarding security, data protection and privacy and any failure to comply with these requirements, regulations, obligations or standards could have a material adverse effect on our reputation, business, financial condition and operating results.
We provide our services to customers in the European Economic Area through our Irish subsidiary, Payoneer Europe Limited (“Payoneer Europe”). Payoneer Europe is licensed by the Central Bank of Ireland as an e-money institution and has completed the “passport” notification processes in all European Economic Area countries.
We provide our services to customers in the European Economic Area through our Irish subsidiary, Payoneer Europe Limited (“Payoneer Europe”). Payoneer Europe is licensed by the Central Bank of Ireland as an Electronic Money Institution and has completed the “passport” notification processes in all European Economic Area countries.
In many other countries it may not be clear whether we are required to be licensed as a payment services provider, financial institution or otherwise. In such markets, we may rely on local banks or licensed payment service providers to process payments and conduct foreign exchange in local currency.
In many countries it may not be clear whether we are required to be licensed as a payment services provider, financial institution or otherwise. In such markets, we may rely on local banks or licensed payment service providers to process payments and conduct foreign exchange transactions in local currency.
As a multinational organization operating in multiple jurisdictions, including but not limited to the U.S., the EU, the UK, Israel and Hong Kong, we may be subject to increasingly complex tax laws and regulations in several jurisdictions, the application of which can be uncertain.
As a multinational organization operating in multiple jurisdictions, including but not limited to the U.S., the EU, the UK, Israel and Hong Kong, we are subject to increasingly complex tax laws and regulations in several jurisdictions, the application of which can be uncertain.
The markets for our products and services are characterized by constant and rapid technological changes, frequent introduction of new products and services, and increasing customer expectations. Our ability to update our platform, to enhance our current products and services and to develop and introduce innovative products and services will significantly affect our future success.
The markets for our products and services are characterized by constant and rapid technological changes, frequent introduction of new products and services, and increasing customer expectations. Our ability to update our platform, to enhance our current products and services and to develop and introduce innovative products and services can significantly affect our future success.
These claims could also result in litigation, require us to purchase a costly license or require us to devote additional research and development resources to change our software, any of which would have a negative effect on our business and results of operations.
These claims could also result in litigation, require us to purchase a costly license or require us to devote additional research and development resources to change our software, any of which could have a material negative effect on our business and results of operations.
Identity thieves and those committing fraud using stolen or fabricated credit card or bank account numbers, or other deceptive or malicious practices, including the hacking of bank accounts, can potentially steal significant amounts of money from businesses like ours. In configuring our payment and Working Capital services, we face an inherent trade-off between security and customer convenience.
Identity thieves and those committing fraud using stolen or fabricated credit card or bank account numbers, or other deceptive or malicious practices, including the hacking of bank accounts, can potentially steal significant amounts of money from businesses like ours. In configuring our services, we face an inherent trade-off between security and customer convenience.
Our certificate of incorporation and bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder limitation matters, subject to limited exceptions, which could discourage stockholder lawsuits or limit our stockholders’ ability to bring a claim in any judicial forum that they find favorable for disputes against our directors, officers, other employees or stockholders.
Our certificate of incorporation and bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for certain stockholder disputes, subject to limited exceptions, which could discourage stockholder lawsuits or limit our stockholders’ ability to bring a claim in any judicial forum that they find favorable for disputes against our directors, officers, other employees or stockholders.
In addition, we are subject to the risk that our employees, counterparties or third-party service providers commit fraudulent activity against us or our customers. Criminals are using 20 Table of Contents increasingly sophisticated methods to engage in illegal activities such as counterfeiting, account takeover and fraud. It is possible that incidents of fraud could increase in the future.
In addition, we are subject to the risk that our employees, counterparties or third-party service providers commit fraudulent activity against us or our customers. Criminals are using increasingly sophisticated methods to engage in illegal activities such as counterfeiting, account takeover and fraud. It is possible that incidents of fraud could increase in the future.
If we fail to update the technical programs correctly or in a timely manner, the technical programs may fail to flag conduct that violates existing laws or regulations, which may subject us to government investigation, fines or reputational damage and could have a material adverse effect on our business, financial condition and results of operations.
If we fail to update the technical programs correctly or in a timely manner, the technical programs may fail to flag conduct that 30 Table of Contents violates existing laws or regulations, which may subject us to government investigation, fines or reputational damage and could have a material adverse effect on our business, financial condition and results of operations.
If one or more of our counterparties were to become insolvent or file for bankruptcy, our ability to recover losses incurred as a result of default or to access or recover our assets that are deposited, held in 21 Table of Contents accounts with, or otherwise due from, such counterparty may be limited by the counterparty’s liquidity or the applicable laws governing the insolvency or bankruptcy proceedings, and we could incur significant losses or suffer reputational damage, which could negatively impact our results of operations and financial condition. ​ If we fail to comply with the applicable rules and policies of the payment network card schemes or the terms of a payment network card scheme license, they could seek to fine us, suspend us or terminate our participation license, which could adversely affect our business.
If one or more of our counterparties were to become insolvent or file for bankruptcy, our ability to recover losses incurred as a result of default or to access or recover our assets that are deposited, held in accounts with, or otherwise due from, such counterparty may be limited by the counterparty’s liquidity or the applicable laws governing the insolvency or bankruptcy proceedings, as has previously occurred, and we could incur significant losses or suffer reputational damage, which could materially and negatively impact our results of operations and financial condition. ​ 19 Table of Contents If we fail to comply with the applicable rules and policies of the payment network card schemes or the terms of a payment network card scheme license, they could seek to fine us, suspend us or terminate our participation license, which could materially adversely affect our business.
Defects in our or our third-party providers’ software, errors or delays in the processing of electronic transactions or other difficulties could result in interruption of business operations, delay in market acceptance, additional development and remediation costs, diversion of technical and other resources, loss of customers or customer data, negative publicity or exposure to liability claims.
Defects in our or our third-party providers’ software, errors or delays in the processing of electronic transactions or other difficulties could result in interruption of business operations, delay in market acceptance, additional development and remediation costs, diversion of technical and other resources, loss of customers or customer data, negative publicity or exposure to 24 Table of Contents liability claims.
If these companies gain a greater share of total eCommerce payment transactions or if we are unable to successfully react to changes in the industry spurred by the entry of these new market participants, it could have a material adverse effect on our business, financial condition and results of operations.
If these companies gain a greater share of total e-commerce payment transactions or if we are unable to successfully react to changes in the industry spurred by the entry of these new market participants, it could have a material adverse effect on our business, financial condition and results of operations.
These provisions include the ability of our Board of Directors to (i) prevent the transfer of capital stock, or the exercise of rights with respect to our capital stock, if the effect of such transfer or exercise of rights would result in a stockholder holding more than 9.9% of the total issued and outstanding shares of our capital stock on a fully diluted basis, and (ii) designate the terms of and issue new series of preferred shares, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
These provisions include the ability of our Board of Directors to (i) prevent the transfer of capital stock, or the exercise of rights with respect to our capital stock, under certain circumstances, including if the effect of such transfer or exercise of rights would result in a stockholder holding more than 9.9% of the total outstanding shares of our capital stock on a fully diluted basis, and (ii) designate the terms of and issue new series of preferred shares, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
Competition could result in a loss of existing customers, and greater difficulty attracting new customers. Furthermore, if competition causes us to reduce the fees we charge in order to attract 17 Table of Contents or retain customers, there is no assurance we can successfully control our costs in order to maintain our profit margins.
Competition could result in a loss of existing customers, and greater difficulty attracting new customers. Furthermore, if competition causes us to reduce the fees we charge in order to attract or retain customers, there is no assurance we can successfully control our costs in order to maintain our profit margins.
We may introduce, or make changes to, features, products, services, privacy practices, or terms of service that customers do not like, which may materially and adversely affect our brand.
We may introduce, or make changes to, features, products, services, privacy practices, pricing, or terms of service that customers do not like, which may materially adversely affect our brand.
If consumers or merchants become unable, unwilling or less willing to use the internet for commerce for any reason, including lack of access to high-speed communications equipment, congestion of traffic on the internet, internet outages or delays, disruptions or other damage to merchants’ 23 Table of Contents and consumers’ computers, increases in the cost of accessing the internet and security and privacy risks or the perception of such risks, our business could be adversely affected.
If consumers or merchants become unable, unwilling or less willing to use the internet for commerce for any reason, including lack of access to high-speed communications equipment, congestion of traffic on the internet, internet outages or delays, disruptions or other damage to merchants’ and consumers’ computers, increases in the cost of accessing the internet and security and privacy risks or the perception of such risks, our business could be materially adversely affected.
The process of designing, implementing and maintaining effective internal controls is a continuous effort that require us to anticipate and react to changes in our business and the economic and regulatory environments.
The process of designing, implementing and maintaining effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments.
If we are unsuccessful in our defense in these litigation matters, or any other legal proceeding, we may be forced to pay damages or fines, enter into consent decrees or change our business practices, any of which could adversely affect our business, financial condition or results of operations.
If we are unsuccessful in our defense in these litigation matters, or any other legal proceeding, we may be forced to pay damages or fines, enter into consent decrees or change our business practices, any of which could be material and materially adversely affect our business, financial condition or results of operations.
In addition, in the past, when the market price of a 36 Table of Contents stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock. If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit.
In addition, in the past, when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock. If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit.
In addition, the interpretation and application of laws of multiple jurisdictions (e.g., the jurisdiction of the merchant and of the consumer) are often extremely complicated in the context of cross-border trade and foreign exchange.
In addition, the interpretation and application of laws of multiple jurisdictions (e.g., the jurisdiction of the merchant and of the buyer) are often extremely complicated in the context of cross-border trade and foreign exchange.
Investment opportunities in certain jurisdictions also may be restricted by legal limits on foreign investment in local assets or classes of assets. We are dependent upon consumers’ continued and unimpeded access to the internet, and upon their willingness to use the internet for commerce.
Investment opportunities in certain jurisdictions also may be restricted by legal limits on foreign investment in local assets or classes of assets. 21 Table of Contents We are dependent upon consumers’ continued and unimpeded access to the internet, and upon their willingness to use the internet for commerce.
We are subject to risks related to changes in currency rates as a result of our investments in international operations and from revenues generated in currencies other than the United States dollar. Our results of operations may be affected by such international operations as a result of changes in foreign currency exchange rates.
We are subject to risks related to changes in currency rates as a result of our international operations and from revenues generated in currencies other than the United States dollar. Our results of operations may be materially adversely affected by such international operations as a result of changes in foreign currency exchange rates.
If we are unable to renew marketplace and enterprise customer contracts or to adjust certain contract components at favorable terms or we lose a significant enterprise or marketplace customer, or if an eCommerce marketplace were to prevent our customers from using our services to receive payments from such marketplace, our results of operations and financial condition may be adversely affected.
If we are unable to renew marketplace and enterprise customer contracts or to adjust certain contract components at favorable terms or we lose a significant enterprise or marketplace customer, or if an e-commerce marketplace were to prevent our customers from using our services to receive payments from such marketplace, our results of operations and financial condition may be materially adversely affected.
In addition, cross-border trade (i.e., transactions where the merchant and consumer are in different countries) is imperative to our business as a source of revenue and profits. Cross-border transactions generally provide higher revenues and operating income than similar transactions that take place within a single country or market.
In addition, cross-border trade (i.e., transactions where the merchant and buyer are in different countries) is imperative to our business as a source of revenue and profits. Cross-border transactions generally provide payment providers higher revenues and operating income than similar transactions that take place within a single country or market.
We are subject to risks associated with changes in interest rates, which could adversely affect our results of operations. A portion of our earnings derives from interest income earned on both corporate funds and customer funds.
We are subject to risks associated with changes in interest rates, which could materially adversely affect our results of operations. A portion of our earnings are derived from interest income earned on both corporate funds and customer funds.
If our policies and procedures are not fully effective or we are not successful in identifying and mitigating 27 Table of Contents all risks to which we are or may be exposed, we may suffer uninsured liability, harm to our reputation or be subject to litigation or regulatory actions that could adversely affect our business, financial condition or results of operations.
If our policies and procedures are not fully effective or we are not successful in identifying and mitigating all risks to which we are or may be exposed, we may suffer uninsured liability, harm to our reputation or be subject to litigation or regulatory actions that could materially adversely affect our business, financial condition or results of operations.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our principal executive office is located in New York City. In addition to our New York office, we also have offices in the greater metropolitan areas of Tel Aviv, Munich, Dublin, London, Shanghai, Shenzhen, Guangzhou and Hong Kong as well as 14 offices in 11 other countries.
Biggest changeItem 2. Properties. Our principal executive office is located in New York City. In addition to our New York office, we also have offices in the greater metropolitan areas of Tel Aviv, Dublin, London, Bangalore, Singapore, Shanghai, Shenzhen, Guangzhou and Hong Kong as well as 16 offices in 12 other countries.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. From time to time we are a party to various litigation matters incidental to the conduct of our business. We are not presently party to any legal proceedings that may have significant effects on our financial position or profitability.
Biggest changeItem 3. Legal Proceedings. From time to time we are a party to various litigation matters incidental to the conduct of our business. We are not presently party to any legal proceedings that we believe to be material to our results of operations.
Mine Safety Disclosures. Not applicable. ​ 38 Table of Contents PART II
Mine Safety Disclosures. Not applicable. ​ 36 Table of Contents PART II
For information on risks related to litigation, see Note 15 - Commitments and Contingencies, to our audited financial statements as of December 31, 2022. See also “Risk Factors - General Risks Related to Payoneer - From time to time we are subject to various legal proceedings which could adversely affect our business, financial condition or results of operations.” Item 4.
For information on risks related to litigation, see Note 16 - Commitments and Contingencies, to our audited financial statements as of December 31, 2023. See also “Risk Factors - General Risks Related to Payoneer - We may be subject to various legal proceedings which could materially adversely affect our business, financial condition or results of operations.” Item 4.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeData for the above indices assume reinvestment of dividends. Total return equals stock price appreciation plus reinvestment of dividends. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings Not applicable. Purchases of Equity Securities by the Issuer and Affiliated Purchasers Not applicable. ​ Item 6. Reserved. ​ ​ ​ ​ 40 Table of Contents
Biggest changeTotal return equals stock price appreciation plus reinvestment of dividends, where applicable. 37 Table of Contents Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings None for the quarterly period ending December 31, 2023.
Securities Authorized for Issuance Under Equity Compensation Plans See Part III, Item 12 of this Form 10-K and Note 18, Stock-Based Compensation of the Notes to Consolidated Financial Statements included herein for additional information required.
Securities Authorized for Issuance Under Equity Compensation Plans See Part III, Item 12 of this Form 10-K and Note 19, Stock-Based Compensation of the Notes to Consolidated Financial Statements included herein for additional information required.
Holders As of February 21, 2023, there were 257 holders of record of our common stock, 1 holder of record of our private warrants, and 1 holder of record of our public warrants. Such numbers do not include beneficial owners holding our securities through nominee names.
Holders As of February 21, 2024, there were 225 holders of record of our common stock, 1 holder of record of our private warrants, and 1 holder of record of our public warrants. Such numbers do not include beneficial owners holding our securities through nominee names.
Stock Price Performance ​ ​ The graph above compares the cumulative total stockholder return on our common stock with the cumulative total return on the Standard & Poor’s (“S&P”) 600 Information Technology Index and the Nasdaq Composite Index. The graph also includes the S&P 500 Information Technology Index which we used in last year’s Annual Report.
Stock Price Performance The graph above compares the cumulative total stockholder return on our common stock with the cumulative total return on the Standard & Poor’s (“S&P”) 600 Information Technology Index and the Nasdaq Composite Index.
In this Annual Report we replaced such index with the S&P 600 Information Technology Index, which includes companies that more closely resemble the Company. The graph assumes 39 Table of Contents an initial investment of $100 in our common stock at the market close on June 28, 2021, which was our initial trading day.
The graph assumes an initial investment of $100 in our common stock at the market close on June 28, 2021, which was our initial trading day. Data for the above indices assume reinvestment of dividends.
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Purchases of Equity Securities by the Issuer and Affiliated Purchasers Repurchases of our common stock The following table provides information with respect to repurchases made by the Company during the three months ended December 31, 2023.
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All repurchases listed below were made in the open market. ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ​ Total Number of Shares Purchased 1 ​ Average Price Paid Per Share ​ Total Number of Shares Purchased as Part of Publicly Announced Plans or Progreams 2 ​ Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs 2 October 1, 2023 - October 31, 2023 ​ 835,344 ​ $5.88 ​ 835,344 ​ $ 40,463,126 November 1, 2023 - November 30, 2023 ​ 1,067,640 ​ $5.50 ​ 1,067,640 ​ $ 34,594,358 December 1, 2023 - December 31, 2023 ​ 2,222,593 ​ $5.09 ​ 2,222,593 ​ $ 240,179,033 Total ​ 4,125,577 ​ ​ ​ 4,125,577 ​ ​ ________________________________________ (1) No shares were repurchased other than through a publicly announced plan or program.
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(2) On May 7, 2023, our Board of Directors authorized a stock repurchase program that provides for the repurchase of up to $80 million of our common stock, including any applicable excise tax, over a period of 24 months.
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On December 7, 2023, our Board of Directors authorized an amendment to the above program to increase the authorized amount of repurchases to an aggregate amount not to exceed $250 million.
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The $250 million authorization amended the previous repurchase authorization, and includes the amount that remains available as of December 7, 2023 to repurchase common stock under, but not any prior repurchases effected pursuant to, the previous authorization. The amended authorization expires December 31, 2025.
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These share repurchases may take place from time to time, in the open market, through privately negotiated transactions or other means, including in accordance with Rule 10b-18 and/or Rule 10b5-1 of the Securities Exchange Act of 1934. The timing and total amount of repurchases is subject to the Company’s discretion. Item 6. Reserved. ​ ​ 38 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOur share in the results of operations is included as share in losses of associated company on the consolidated statements of comprehensive loss. ​ 45 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the years indicated, and the changes between periods. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Increase (Decrease) (in thousands) ​ 2022 2021 2020 2022 ​ 2021 ​ Revenues ​ $ 627,623 ​ $ 473,403 ​ $ 345,592 33 % 37 % Transaction costs (1) ​ 110,165 ​ 101,476 ​ 97,040 9 % 5 % Other operating expenses (Exclusive of items shown separately below) ​ 149,199 ​ 124,649 ​ 81,976 20 % 52 % Research and development expenses ​ 115,041 ​ 80,760 ​ 52,301 42 % 54 % Sales and marketing expenses ​ 164,564 ​ 114,331 ​ 76,846 44 % 49 % General and administrative expenses ​ 90,010 ​ 64,399 ​ 37,629 40 % 71 % Depreciation and amortization ​ 20,858 ​ 17,997 ​ 17,095 16 % 5 % Total operating expenses ​ 649,837 ​ 503,612 ​ 362,887 29 % 39 % Operating loss ​ (22,214) ​ (30,209) ​ (17,295) (26) % 75 % Financial income (expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain from change in fair value of Warrants ​ ​ 33,963 ​ ​ 11,824 ​ ​ — ​ ** ​ ​ ** ​ Other financial income (expense), net ​ ​ (10,131) ​ ​ (6,854) ​ ​ 2,012 ​ 48 % ​ ** ​ Financial income, net ​ ​ 23,832 ​ ​ 4,970 ​ ​ 2,012 ​ ** ​ ​ 147 % Income (loss) before taxes on income and share in losses of associated company ​ 1,618 ​ (25,239) ​ (15,283) (106) % 65 % Taxes on income ​ 13,586 ​ 8,711 ​ 8,320 56 % 5 % Share in losses of associated company ​ 2 ​ 37 ​ 143 (95) % (74) % Net loss ​ $ (11,970) ​ $ (33,987) ​ $ (23,746) (65) % 43 % ** Not meaningful (1) In 2022 and 2021, interest expense and fees associated with related party transaction was $1,491 and $220, respectively. ​ Year ended December 31, 2022 Compared to the year ended December 31, 2021 Revenues Revenues were $627.6 million for the year ended December 31, 2022, an increase of $154.2 million, or 33%, compared to $473.4 million for the year ended December 31, 2021.
Biggest changeResults of Operations ​ The following table sets forth a summary of our consolidated results of operations for the years indicated, and the changes between periods. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Increase (Decrease) (in thousands) ​ 2023 2022 2021 2023 ​ 2022 ​ Revenues ​ $ 831,103 ​ $ 627,623 ​ $ 473,403 32 % 33 % Transaction costs (Exclusive of depreciation and amortization shown separately below) (1) ​ 122,291 ​ 110,165 ​ 101,476 11 % 9 % Other operating expenses ​ 160,609 ​ 149,199 ​ 124,649 8 % 20 % Research and development expenses ​ 119,197 ​ 115,041 ​ 80,760 4 % 42 % Sales and marketing expenses ​ 196,654 ​ 164,564 ​ 114,331 20 % 44 % General and administrative expenses ​ 100,929 ​ 90,010 ​ 64,399 12 % 40 % Depreciation and amortization ​ 27,814 ​ 20,858 ​ 17,997 33 % 16 % Total operating expenses ​ 727,494 ​ 649,837 ​ 503,612 12 % 29 % Operating income (loss) ​ 103,609 ​ (22,214) ​ (30,209) ** % (26) % Financial income (expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain from change in fair value of Warrants ​ ​ 17,359 ​ ​ 33,963 ​ ​ 11,824 ​ (49) % ​ 187 % Other financial income (expense), net ​ ​ 11,568 ​ ​ (10,131) ​ ​ (6,854) ​ ** % ​ 48 % Financial income, net ​ ​ 28,927 ​ ​ 23,832 ​ ​ 4,970 ​ 21 % ​ 380 % Income (loss) before taxes on income and share in losses of associated company ​ 132,536 ​ 1,618 ​ (25,239) ** % ** % Taxes on income ​ 39,203 ​ 13,586 ​ 8,711 189 % 56 % Share in losses of associated company ​ — ​ 2 ​ 37 ** % (95) % Net income (loss) ​ $ 93,333 ​ $ (11,970) ​ $ (33,987) ** % (65) % ** Not meaningful (1) In 2023, 2022, and 2021 interest expense and fees associated with related party transaction were $1.8, $1.5, and $0.2 million respectively. ​ 44 Table of Contents Year ended December 31, 2023 Compared to the year ended December 31, 2022 Revenues Revenues were $831.1 million for the year ended December 31, 2023, an increase of $203.5 million, or 32%, compared to $627.6 million for the year ended December 31, 2022.
Our revenues can be impacted by the following: (i) Mix in customer size, products, and services; ​ (ii) Mix between domestic and cross-border transactions; ​ (iii) Geographic region or country in which a transaction occurs; and ​ (iv) Pricing and other market conditions, including interest rates. ​ Management closely monitors volume and revenue to ensure that we continue to grow funds and business activity that enters the platform, expanding overall scale and reach of business.
Our revenues can be impacted by the following: (i) Mix in customer size, products, and services; ​ (ii) Mix between domestic and cross-border transactions; ​ (iii) Geographic region or country in which a transaction occurs; and ​ (iv) Pricing and other market conditions, including interest rates. ​ Management closely monitors volume and revenue to ensure that we continue to grow funds and business activity that enters into the platform, expanding our overall scale and the reach of our business.
Other operating expenses Other operating expenses mainly include compensation for our employees and subcontractors who support customer service calls, customer approvals, banking infrastructure implementations, transaction monitoring and liquidity management as well as indirect costs incurred for fraud detection, compliance operations, regulatory services and maintenance costs related to our customer call center infrastructure.
Other operating expenses Other operating expenses mainly include compensation for our employees and subcontractors, who support customer service calls, customer onboarding costs, banking infrastructure implementations, transaction monitoring and liquidity management as well as indirect costs incurred for fraud detection, compliance operations, regulatory services and maintenance costs related to our customer call center infrastructure.
We then apply macroeconomic factors such as market unemployment rate, current and forecasted GDP, S&P yield and inflation rate, which are sourced externally, using a single scenario that we believe is most appropriate to the economic conditions applicable to a particular period.
We then apply macroeconomic factors such as market unemployment rate, current and forecasted GDP, S&P yield, risk free rate and inflation rate, which are sourced externally, using a single scenario that we believe is most appropriate to the economic conditions applicable to a particular period.
We regularly update our allowance estimates as new facts become known, and events occur that may impact the settlement or recovery of losses. The allowances are maintained at a level we deem appropriate to 52 Table of Contents adequately provide for current expected credit losses at the balance sheet date after incorporating the impact of externally sourced macroeconomic forecasts.
We regularly update our allowance estimates as new facts become known, and events occur that may impact the settlement or recovery of losses. The allowances are maintained at a level we deem appropriate to adequately provide for current expected credit losses at the balance sheet date after incorporating the impact of externally sourced macroeconomic forecasts.
We believe our existing cash and cash equivalents and cash flows from operating activities will be sufficient to meet our operating working capital and capital expenditure requirements for at least the next twelve months.
We believe our existing cash and cash equivalents and cash flows from operating activities will be sufficient to meet our operating working capital, share repurchase and capital expenditure requirements for at least the next twelve months.
Since the adoption of ASC 326, Current Expected Credit Losses, as of January 1, 2022, we estimate ALCAL based on historical lifetime loss data as well as macroeconomic forecasts applied to the portfolio, which is segmented by programs. Loss rates are generated using historical loss data for each portfolio and are applied to segments of each portfolio.
Since the adoption of ASC 326, Current Expected Credit Losses, as of January 1, 2022, we estimate ALCAL based on historical lifetime loss data as well as macroeconomic forecasts applied to the portfolio, which is segmented by program. Loss rates are generated using historical loss data for each portfolio which are applied to segments of each portfolio.
Our future financing requirements will depend on many factors including our growth rate, the timing and extent of spending to support development of our platform and the expansion of sales and marketing activities.
Our future financing requirements will depend on many factors including our growth rate, the timing and extent of spending to support development of our platform and the ongoing expansion needs of sales and marketing activities.
Further, we provide incentive payments to customers and merchants, which require judgment to determine whether the payments should be recorded as a reduction to gross revenue. Changes in judgments with respect to these assumptions and estimates could impact the amount of revenue recognized.
Further, we provide incentive payments to customers, including marketplace platforms, and merchants, which require judgment to determine whether the payments should be recorded as a reduction to gross revenue. Changes in judgments with respect to these assumptions and estimates could impact the amount of revenue recognized.
Expected credit loss, inclusive of historical loss data and macroeconomic factors, are applied to the principal amount of our CA receivables. Determining appropriate current expected credit loss allowances for CA receivables is an inherently uncertain process and ultimate losses may vary from current estimates.
Expected credit loss rates, incorporating historical loss data and macroeconomic factors, are applied to the principal amount of our CA receivables. Determining appropriate current expected credit loss allowances for CA receivables is an inherently uncertain process and ultimate losses may vary from current estimates.
However, these measures are not financial measures calculated in accordance with GAAP and should not be considered as substitutes for financial measures that have been calculated in accordance with GAAP.
However, certain of these measures are not financial measures calculated in accordance with GAAP and should not be considered as substitutes for financial measures that have been calculated in accordance with GAAP.
Impact of the war in Ukraine During 2022, a geopolitical and armed conflict between Ukraine and Russia, which developed into an ongoing war, resulted in economic sanctions on Russia, Belarus, and certain territories in Ukraine. Payoneer provides services to customers in Ukraine and in jurisdictions that are or may be impacted by these economic sanctions.
Impact of the War in Ukraine During 2022, a geopolitical and armed conflict between Ukraine and Russia, which developed into an ongoing war, resulted in economic sanctions on Russia, Belarus, and certain territories in Ukraine. We provide services to customers in Ukraine and in jurisdictions that are or may be impacted by these economic sanctions.
The initial borrowing commitment is $25 million subject to increases at our request and the lender’s discretion up to $100 million. Additional commitments will carry interest rates ranging from 7% to 7.75%.
The initial borrowing commitment is $25 million subject to increases at our request and the lender’s discretion up to $100 million. Additional commitments will carry interest rates ranging from 7% to 7.75% in addition to the benchmark rate.
Some agreements have fee structures that are defined only partly through the contract’s term while the remaining fee structure is subject to market competitive rates and good faith negotiation with the marketplace. In addition, in a few instances, we compensate the marketplace with structured incentives to acquire additional customers.
Some agreements have fee structures that are defined only partly through the contract’s term while the remaining fee structure is subject to market competitive rates and good faith negotiation with the marketplace. In addition, in a few instances, we compensate the marketplace with structured incentives tied to the overall economics of the relationship.
(“PEPI”), a wholly-owned second tier subsidiary of the Company and its subsidiary (the “Borrower”) entered into a multi-party Receivables Loan and Security Agreement (the “Warehouse Facility”) with, inter alia, affiliates of Viola Ventures for the purpose of external financing of capital advance activity.
(“PEPI”), our wholly-owned second tier subsidiary and its subsidiary (the “Borrower”) entered into a multi-party Receivables Loan and Security Agreement (the “Warehouse Facility”) with, inter alia, affiliates of Viola Ventures. The objective was to provide access to external financing for our capital advance activity.
Lease Commitments We have entered into various non-cancelable leases for certain offices and vehicles with contractual lease periods expiring between 2023 and 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments due by period ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ ​ ​ More than (in thousands) ​ Total 1 year 1-3 years 3-5 years 5 years Operating leases ​ $ 15,217 ​ $ 8,295 ​ $ 6,922 ​ $ — ​ $ — ​ Off-Balance Sheet Arrangements As of the balance sheet dates of December 31, 2022 and December 31, 2021, the Company has not engaged in any off-balance sheet arrangements, as defined by Regulation S-K, that have or are reasonably likely to have a current or future effect on the Company’s financial condition, results of operations or cash flows.
Lease Commitments We have entered into various non-cancelable leases for certain offices and vehicles with contractual lease periods expiring between 2024 and 2035. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments due by period ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ ​ ​ More than (in thousands) ​ Total 1 year 1-3 years 3-5 years 5 years Operating leases ​ $ 31,491 ​ $ 7,050 ​ $ 8,223 ​ $ 3,846 ​ $ 12,372 ​ Off-Balance Sheet Arrangements As of the balance sheet dates of December 31, 2023 and December 31, 2022, we have not engaged in any off-balance sheet arrangements, as defined by Regulation S-K, that have or are reasonably likely to have a current or future effect on our financial condition, results of operations or cash flows.
To a lesser extent, we generate revenue through collection fees, which mainly refer to fees charged when payments are made into a customer’s account, and bank transfer fees, which are fees charged when one of Payoneer’s Enterprise customers uses Payoneer to send a payment directly into the bank account of a small business.
To a lesser extent, we generate revenue through the collection of fees, mainly fees charged when payments are made into a customer’s account, and bank transfer fees, which are fees charged when one of Payoneer’s enterprise customers uses Payoneer to send a payment directly into the bank account of a small business or individual that does not have an account on our platform.
For the year ended December 31, 2022, Ukraine, Russia and Belarus, combined, accounted for slightly less than 10% of our revenue, of which Russia and Belarus, combined, accounted for less than 3% of our revenue.
For the year ended December 31, 2023, Ukraine and Belarus, combined, accounted for less than 10% of our revenue, of which Belarus accounted for less than 1% of our revenue.
Our net loss for the year ended December 31, 2022 was $12.0 million after considering non-cash charges primarily consisting of stock-based compensation of $52.1 million and $20.9 million in depreciation and amortization as well as other non-cash items offset by a $34.0 million gain from the change in fair value of Warrants.
Our net loss for the year ended December 31, 2022 was $12.0 million after considering non-cash charges primarily consisting of stock-based compensation of $52.1 million and $20.9 million in depreciation and amortization, as well as other non-cash items, offset by a $34.0 million gain from the change in fair value of warrants. 47 Table of Contents Investing Activities Net cash used in investing activities was $44.3 million for the year ended December 31, 2023, a decrease of $50.0 million compared to cash provided by investing activities $5.7 million for the year ended December 31, 2022.
We primarily review the following key performance indicators and non-GAAP measures when assessing our performance: Volume Volume refers to the total dollar value of transactions successfully completed or enabled by our platform, not including orchestration transactions.
We primarily review the following key performance indicators and non-GAAP measures when assessing our performance: Volume Volume refers to the total dollar value of transactions successfully completed or enabled by our platform, not including orchestration transactions. For a customer that both receives and later sends payments, we count the volume only once.
Capitalized development costs and current technology acquired as part of the optile acquisition are amortized over the period of estimated benefit, using the straight-line method and estimated useful lives of 3-6 years. Financial income, net Financial income, net includes gains (losses) from foreign exchange fluctuations. We conduct transactions worldwide and settle accounts with our financial intermediaries in various currencies.
Internal use software and acquired developed technology assets are amortized over the period of estimated benefit, using the straight-line method and estimated useful lives of 3-6 years. ​ 43 Table of Contents Financial income, net Financial income, net includes gains (losses) from foreign exchange fluctuations. We conduct transactions worldwide and settle accounts with our financial intermediaries in various currencies.
Volume is one of the primary drivers for our revenue growth. See “ Key Metrics and Non-GAAP Financial Measures ” for additional information. Our customers have trusted the Payoneer platform to process $61.3 billion, $56.7 billion and $44.4 billion in volume during the years ended December 31, 2022, 2021 and 2020, respectively.
Volume is one of the primary drivers for our revenue growth. See “Key Metrics and Non-GAAP Financial Measures” for additional information. Our customers have trusted the Payoneer platform to process $66.0 billion, $59.7 billion, and $55.4 billion in volume during the years ended December 31, 2023, 2022, and 2021, respectively.
Notwithstanding the U.S. taxation of these amounts, we intend to continue to invest most or all of these earnings, as 53 Table of Contents well as our capital in these subsidiaries, indefinitely outside of the U.S. and do not expect to incur any significant, additional taxes related to such amounts.
Notwithstanding the U.S. taxation of these amounts, we intend to continue to invest most or all of these earnings, as well as our capital in these subsidiaries, indefinitely outside of the U.S. and do not expect to incur any significant, additional taxes related to such amounts. ​ ​ ​ 51 Table of Contents Loss contingencies: We are a party to certain legal and regulatory proceedings with respect to a variety of matters.
During 2022, we have ceased to provide services to customers in Russia and have been reducing our payment services to Belarus customers, while at the same time revenues in Ukraine have been better than our expectations.
During 2022, we ceased to provide services to customers in Russia and have limited our payment services to Belarus customers, while at the same time revenues in Ukraine have remained relatively stable.
Investors are encouraged to review the related GAAP financial measure and the reconciliation of this non-GAAP financial measure to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business. 51 Table of Contents Adjusted EBITDA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, (in thousands) ​ 2022 2021 2020 Net loss ​ $ (11,970) ​ $ (33,987) ​ $ (23,746) Depreciation and amortization ​ 20,858 ​ 17,997 ​ 17,095 Taxes on income ​ 13,586 ​ 8,711 ​ 8,320 Other financial income (expense), net ​ 10,131 ​ 6,854 ​ (2,012) EBITDA ​ 32,605 ​ (425) ​ (343) Stock based compensation expenses (1) ​ 52,150 ​ 37,012 ​ 10,892 Reorganization related expenses (2) ​ ​ — ​ ​ 5,087 ​ ​ — Share in losses of associated company ​ ​ 2 ​ ​ 37 ​ ​ 143 Other non-recurring items (3) ​ — ​ — ​ (4,304) M&A related expenses (4) ​ (2,323) ​ (1,721) ​ — Gain from change in fair value of Warrants (5) ​ ​ (33,963) ​ ​ (11,824) ​ ​ — Adjusted EBITDA ​ 48,471 ​ 28,166 ​ 6,388 (1) Represents non-cash charges associated with stock-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy. ​ (2) Represents the non-recurring reorganizational costs that were not recorded as a reduction of additional paid in capital.
Adjusted EBITDA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, (in thousands) ​ 2023 2022 2021 Net income (loss) ​ $ 93,333 ​ $ (11,970) ​ $ (33,987) Depreciation and amortization ​ 27,814 ​ 20,858 ​ 17,997 Taxes on income ​ 39,203 ​ 13,586 ​ 8,711 Other financial (income) expense, net ​ (11,568) ​ 10,131 ​ 6,854 EBITDA ​ 148,782 ​ 32,605 ​ (425) Stock based compensation expenses (1) ​ 65,767 ​ 52,150 ​ 37,012 Reorganization related expenses (2) ​ ​ — ​ ​ — ​ ​ 5,087 Share in losses of associated company ​ ​ — ​ ​ 2 ​ ​ 37 M&A related expenses (income) (3) ​ 3,468 ​ (2,323) ​ (1,721) Gain from change in fair value of Warrants (4) ​ ​ (17,359) ​ ​ (33,963) ​ ​ (11,824) Restructuring charges (5) ​ ​ 4,488 ​ ​ — ​ ​ — Adjusted EBITDA ​ $ 205,146 ​ $ 48,471 ​ $ 28,166 (1) Represents non-cash charges associated with stock-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy. 49 Table of Contents ​ (2) Represents the non-recurring reorganizational costs that were not recorded as a reduction of additional paid in capital.
Liquidity As a result of the Reorganization, we raised gross proceeds of $874.5 million including the contribution of $574.5 million of cash held in FTOC’s trust account from its initial public offering, which is net of redemptions of FTOC’s Common Stock held by FTOC’s public stockholders prior to the Reorganization, and $300.0 million of private investment in public equity (“PIPE”) at $10.00 per share of Payoneer Global Inc.’s Common Stock.
As a result of the Reorganization, we raised gross proceeds of $874.5 million including the contribution of $574.5 million of cash held in FTOC’s trust account from its initial public offering, which is net of redemptions of FTOC’s Common Stock held by FTOC’s public stockholders prior to the Reorganization.
Our customers’ underlying business activities are also linked to the macroeconomic and geopolitical environment. For example, the war between Ukraine and Russia that developed during 2022 and the related economic sanctions imposed on Russia and certain territories in Ukraine, have and may continue to impact our services to customers in such countries.
For example, the war between Ukraine and Russia that began in 2022 and the related economic sanctions imposed on Russia, Belarus and certain territories in Ukraine, have and may continue to impact our services to customers in such countries.
In addition, our banking partners ceased their operations in Russia, and subsequently we ceased to provide services to customers in Russia. It is not possible to predict the broader consequences of this conflict, but the continuation or escalation of the conflict, along with any expansion to the surrounding areas, may have a significant effect on our results of operations.
It is not possible to predict the broader consequences of the conflict, but the continuation or escalation of the conflict, along with any expansion to the surrounding areas, may have a significant effect on our results of operations. ​ M&A .
Research and development expenses Research and development expenses consist primarily of employee compensation and related costs, professional services and consulting expenses, and non-capitalized costs associated with the development of new technologies.
Research and development expenses Research and development expenses consist primarily of employee compensation and related costs, professional services and consulting expenses, and non-capitalized costs associated with the development of new technologies. Such non-capitalized costs are charged to the consolidated statements of comprehensive income (loss) as incurred.
Sales and marketing expenses Sales and marketing expenses were $164.6 million for the year ended December 31, 2022, an increase of $50.3 million, or 44%, compared to $114.3 million for the year ended December 31, 2021.
Sales and marketing expenses Sales and marketing expenses were $196.7 million for the year ended December 31, 2023, an increase of $32.1 million, or 20%, compared to $164.6 million for the year ended December 31, 2022.
General and administrative expenses General and administrative expenses were $90.0 million for the year ended December 31, 2022, an increase of $25.6 million, or 40%, compared to $64.4 million for the year ended December 31, 2021.
General and administrative expenses General and administrative expenses were $100.9 million for the year ended December 31, 2023, an increase of $10.9 million, or 12%, compared to $90.0 million for the year ended December 31, 2022.
These costs are net of any rebate programs with banks and processors, such as volume rebates. Transaction costs are primarily driven by volume and number of transactions and generally increase as volume and number of transactions increase.
These costs are net of any rebate programs with banks and processors, such as volume rebates. Transaction costs are primarily driven by volume and number of transactions and generally increase as volume and number of transactions increase, while certain of our products and services, such as our commercial card or checkout product and certain markets drive higher transaction costs.
Due to the inherent uncertainties of the legal and regulatory process in the multiple jurisdictions in which we operate, our judgments may differ materially from the actual outcomes. Legal costs are expensed as incurred and recorded in general and administrative expenses on the consolidated statement of operations.
Due to the inherent uncertainties of the legal and regulatory process in the multiple jurisdictions in which we operate, our judgments may differ materially from the actual outcomes.
Interest and penalties are classified as taxes on income in the consolidated financial statements. In addition to aforementioned changes, the TCJA also included a mandatory one-time tax on accumulated earnings of foreign subsidiaries, and as a result, all previously unremitted earnings for which no U.S. deferred tax liability had been accrued were subject to U.S. taxation.
Tax Cuts and Jobs Act of 2017 also included a mandatory one-time tax on accumulated earnings of foreign subsidiaries, and as a result, all previously unremitted earnings for which no U.S. deferred tax liability had been accrued were subject to U.S. taxation.
The qualitative factors may include, but are not limited to, macroeconomic conditions, industry and market conditions, operating environment, financial performance and other relevant events, which are inherently subject to estimation.
The impairment evaluation for goodwill utilizes a qualitative assessment to determine whether it is more likely than not that goodwill is impaired. The qualitative factors may include, but are not limited to, macroeconomic conditions, industry and market conditions, operating environment, financial performance and other relevant events, which are inherently subject to estimation.
Transaction fee revenue principally consists of fees for withdrawals and usage. In addition, the Company generates revenue from non-volume-based products and services which are based on a fixed fee. We believe that Revenue demonstrates our ability to monetize on volumes.
In addition, we generate revenue from non-volume-based products and services which are based on a fixed fee. We believe that Revenue demonstrates our ability to monetize volume activity on our platform.
Transaction costs Transaction costs were $110.2 million for the year ended December 31, 2022, an increase of $8.7 million, or 9%, compared to $101.5 million for the year ended December 31, 2021.
Transaction costs Transaction costs were $122.3 million for the year ended December 31, 2023, an increase of $12.1 million, or 11%, compared to $110.2 million for the year ended December 31, 2022.
We are continually acting to comply with imposed sanctions and are monitoring and assessing the impact the conflict may have on our results of operations.
We have developed and implemented a robust transaction monitoring program designed to comply with imposed sanctions and to monitor the impact the conflict may have on our results of operations.
These warrants are classified as a liability and remeasured at period end and the corresponding mark-to-market adjustment is included in Financial Income, net. Income tax We are in a taxable income position in the U.S. and in certain foreign jurisdictions, for which there are income taxes recorded. In addition, we record expenses associated with uncertain income tax positions.
Income tax We are in a taxable income position in the U.S. and in certain foreign jurisdictions, for which there are income taxes recorded. In addition, we record expenses associated with uncertain income tax positions.
Revenue The majority of our revenues are generated from transaction fees, which vary based on the type of service the customer utilizes. Transaction fee revenue principally consists of revenue generated when customers use their funds, either to withdraw their funds from our platform or to use the funds to make payments.
Transaction fee revenue principally consists of revenue generated when customers use their funds, either to withdraw their funds from our platform to a local banking institution or to use the funds to make payments.
For more information on our revenue recognition policies, see note 2q. of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
The majority of our revenue is recognized and collected upon the completion of the underlying transaction. In some cases, revenues are collected through intermediaries. For more information on our revenue recognition policies, see note 2r. of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Interest income (expense) from cash and cash equivalents deposited in its accounts is also included under financial income, net, which vary based on cash and cash equivalents balances, and based on market rates. In addition, as a result of the Reorganization, we acquired warrants that are exercisable for shares of the Company’s common stock.
Interest income (expense) from corporate cash and cash equivalents deposited in our accounts is also included under financial income, net, which vary based on cash and cash equivalents balances, and based on market rates. In addition, as a result of the reverse recapitalization transaction we completed with FTAC Olympus Acquisition Corp.
Financial income, net Financial income, net was $23.8 million for the year ended December 31, 2022, an increase of $18.9 million, or 380%, compared to $5.0 million for the year ended December 31, 2021.
The increase was driven primarily by an increase in amortization of internal use software costs. Financial income, net Financial income, net was $28.9 million for the year ended December 31, 2023, an increase of $5.1 million, or 21%, compared to $23.8 million for the year ended December 31, 2022.
This increase was driven primarily by an increase of $25.1 million in employee compensation, benefits and other employee-related expenses as a result of an increase in headcount in our research and development groups.
This increase was driven primarily by an increase of $19.4 million in employee compensation, benefits and other employee-related expenses as a result of an increase in average employee headcount, which was partially offset by the impact of our workforce reduction plan discussed above.
Our estimates are based upon assumptions that we believe to be reasonable, but which are inherently uncertain and unpredictable. These valuations require the use of management’s assumptions, which do not reflect unanticipated events and circumstances that may occur.
Our estimates are based upon assumptions that we believe to be reasonable, but which are inherently uncertain and unpredictable.
Volume grew 53% year over year in the year ended December 31, 2020 as a result of continued growth in digital commerce, concurrently with the adverse effect on the business of our customers’ travel marketplaces. Revenue We generate revenues mainly from transaction fees, which vary based on the type of service the customer utilizes.
Volume grew 11% for the year ended December 31, 2023 compared to the year ended December 31, 2022, driven by a combination of continued growth with our largest digital commerce marketplaces, strong travel demand, and customer acquisition. 48 Table of Contents Revenue We generate revenues mainly from transaction fees, which vary based on the type of service the customer utilizes.
This also includes employee compensation and related costs to support the sales and marketing process. General and administrative expenses General and administrative expenses consist primarily of compensation, benefits and overhead expenses associated with corporate management.
Sales and marketing expenses Sales and marketing expenses consist of costs for business development, customer success, product launch costs, marketing and advertising costs, retention costs and certain customer acquisition costs and includes employee compensation and related costs. General and administrative expenses General and administrative expenses consist primarily of compensation, benefits and overhead expenses associated with corporate management.
We believe there are additional opportunities to deliver value to more customers through targeted acquisitions. 43 Table of Contents Economic conditions and resulting business trends Our results of operations are impacted by the relative strength of the overall global economy and its effect on business investment, unemployment, consumer spending behavior, and business and consumer demand.
Our results are impacted by the relative strength of the overall global economy and its effect on business investment, unemployment, consumer spending behavior, and business and consumer demand.
There was immaterial impact on revenue from Ukraine, Russia and Belarus during the year ended December 31, 2022 as compared to the year ended December 31, 2021. Further escalation of the conflict may have a material effect on our results of operations.
For the year ended December 31, 2022, Ukraine, Russia and Belarus, combined accounted for slightly less than 10% of our 40 Table of Contents revenue, of which Russia and Belarus, combined accounted for less than 3% of our revenue. Further escalation of the conflict may have a material effect on our results of operations.
Looking forward, we intend to continue to invest actively to grow our global platform, expand product development, extend our regulatory footprint, further automate our operations, increase new customer growth and make more acquisitions to accelerate our ability to deliver more value to customers around the world.
Looking forward, we intend to continue to invest actively to enhance our global platform, deliver new products, extend our regulatory footprint, further automate our operations, increase new customer growth and make more acquisitions to accelerate our ability to deliver more value to customers around the world. ​ ​ ​ 39 Table of Contents Key Development and Trends Repurchase Program On May 7, 2023, our Board of Directors authorized a stock repurchase program for the repurchase of up to $80 million of our common stock, including any applicable excise tax.
This was offset by transaction costs of $5.1 million incurred in 2021 related to the Reorganization. Depreciation and amortization expenses Depreciation and amortization expenses were $20.9 million for the year ended December 31, 2022, an increase of $2.9 million, or 16%, compared to $18.0 million for the year ended December 31, 2021.
This was offset by a decrease of $2.4 million in third-party contractors and consulting expenses. 45 Table of Contents Depreciation and amortization expenses Depreciation and amortization expenses were $27.8 million for the year ended December 31, 2023, an increase of $6.9 million, or 33%, compared to $20.9 million for the year ended December 31, 2022.
Research and development expenses Research and development expenses were $115.0 million for the year ended December 31, 2022, an increase of $34.2 million, or 42%, compared to $80.8 million for the year ended December 31, 2021.
In addition, there was an increase of $4.7 million in information technology expenses partially offset by various cost savings of $3.0 million. Research and development expenses Research and development expenses were $119.2 million for the year ended December 31, 2023, an increase of $4.2 million, or 4%, compared to $115.0 million for the year ended December 31, 2022.
Financing Activities Net cash provided by financing activities was $1.46 billion for the year ended December 31, 2022, an increase of $0.06 billion, or 5%, compared to $1.40 billion for the year ended December 31, 2021.
Financing Activities Net cash provided by financing activities was $512.0 million for the year ended December 31, 2023, a decrease of $949.4 million compared to $1.46 billion for the year ended December 31, 2022, primarily driven by a lower increase in customer balances during the current year compared to the prior year.
Other operating expenses Other operating expenses were $149.2 million for the year ended December 31, 2022, an increase of $24.6 million, or 20%, compared to $124.6 million for the year ended December 31, 2021.
Other operating expenses Other operating expenses were $160.6 million for the year ended December 31, 2023, an increase of $11.4 million, or 8%, compared to $149.2 million for the year ended December 31, 2022. This increase was driven primarily by an increase of $10.7 million in third-party contractors and consulting expenses.
We may enter into agreements with third parties with respect to investments in, or acquisitions of, businesses or technologies, which could also require us to seek additional equity or debt financing. ​ 48 Table of Contents Cash Flows The following tables present a summary of cash flows from operating, investing and financing activities for the following comparative periods. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, (in thousands) ​ 2022 2021 2020 Net cash provided by operating activities ​ $ 83,960 ​ $ 20,015 ​ $ 9,526 Net cash provided by (used in) investing activities ​ 5,734 ​ 10,156 ​ (66,854) Net cash provided by financing activities ​ 1,461,312 ​ 1,396,195 ​ 1,673,464 Effect of exchange rate changes on cash and cash equivalents ​ (2,719) ​ (1,222) ​ 636 Change in cash, cash equivalents, restricted cash and customer funds ​ $ 1,548,287 ​ $ 1,425,144 ​ $ 1,616,772 ​ Operating Activities Net cash provided by operating activities consists of net loss adjusted for certain non-cash items and changes in other assets and liabilities.
Cash Flows ​ The following table presents a summary of cash flows from operating, investing and financing activities for the following comparative periods. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, (in thousands) ​ 2023 2022 2021 Net cash provided by operating activities ​ $ 159,489 ​ $ 83,960 ​ $ 20,015 Net cash provided by (used in) investing activities ​ (44,254) ​ 5,734 ​ 10,156 Net cash provided by financing activities ​ 511,954 ​ 1,461,312 ​ 1,396,195 Effect of exchange rate changes on cash and cash equivalents ​ 4,458 ​ (2,719) ​ (1,222) Change in cash, cash equivalents, restricted cash and customer funds ​ $ 631,647 ​ $ 1,548,287 ​ $ 1,425,144 ​ Operating Activities Net cash provided by operating activities was $159.5 million for the year ended December 31, 2023, an increase of $75.5 million compared to $84.0 million for the year ended December 31, 2022.
As part of our network relationships, we enter from time to time into agreements with marketplaces around the world. Many of these agreements contain product offerings to be provided to Payoneer’s customers receiving payments from the marketplaces or service offering to the marketplace directly or a combination of both. Some agreements have exclusivity arrangements with defined term length.
These agreements govern how we provide services to SMBs and individuals receiving payments from those marketplaces, or how we provide services to the marketplace directly, or a combination of both. Some agreements have exclusivity arrangements with a defined term length.
This increase was primarily driven by a change in fair value of warrants of $22.1 million, an increase of $5.1 million in interest income on corporate cash balances, partially offset by revaluation of foreign currency balances and bank fees.
This increase was primarily driven by an increase of $11.9 million in interest income on corporate cash balances and $9.2 million from revaluation of foreign currency balances, partially offset by the gain from revaluation of warrant liabilities that was $16.6 million less in the current period compared to the prior period.
Net loss For a discussion regarding our net loss position please refer to the Liquidity and Capital Resources section below. 47 Table of Contents Year ended December 31, 2021 Compared to the year ended December 31, 2020 For a discussion of the 2021 Results of Operations, including a discussion of the financial results for the fiscal year ended December 31, 2021 compared to the fiscal year ended December 31, 2020, refer to Part I, Item 7 of our Form 10-K filed with the SEC on March 3, 2022. ​ Liquidity and Capital Resources The following discussion of our liquidity and capital resources is based on the financial information derived from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Liquidity and Capital Resources The following discussion of our liquidity and capital resources is based on the financial information derived from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Goodwill is tested annually for impairment at the reporting unit level in the third quarter, or sooner when circumstances indicate an impairment may exist. The impairment evaluation for goodwill utilizes a qualitative assessment to determine whether it is more likely than not that goodwill is impaired.
These valuations require the use of management’s assumptions, which do not reflect unanticipated events and circumstances that may occur. ​ ​ 50 Table of Contents Goodwill is tested annually for impairment at the reporting unit level in the third quarter, or sooner when circumstances indicate an impairment may exist.
This increase was driven mainly by an increase of $20.4 million in employee compensation, benefits and other employee-related expenses, partly as a result of an increase in headcount in our sales and marketing group.
This increase was driven mainly by an increase of $8.3 million in compensation, benefits and other employee-related expenses as a result of an increase in employee headcount, an increase of $2.4 million in indirect taxes and fees and an increase of $2.3 million in expense related to the fair value adjustment of a liability related to our 2020 acquisition of optile that positively impacted the prior period and did not recur.
The amounts relate to legal and professional services associated with the Reorganization. ​ (3) Consists primarily of a non-recurring allowance outside of normal course of business due to recovery of previously written off amount relating to one of our bank providers and non-recurring provision in connection with executive separation. ​ (4) Represents non-recurring fair value adjustment of a liability related to our 2020 acquisition of optile. ​ (5) Changes in the estimated fair value of the warrants are recognized as gain or loss on the statements of operations.
Amounts for the years ended December 31, 2022 and 2021 relate to a non-recurring fair value adjustment of a liability related to our 2020 acquisition of optile. ​ (4) Changes in the estimated fair value of the warrants are recognized as gain or loss on the statements of comprehensive income (loss).
Income tax Income tax expense was $13.6 million for the year ended December 31, 2022, an increase of $4.9 million, or 56%, compared to an expense of $8.7 million for the year ended December 31, 2021. The increase was primarily driven by the result of income taxes associated with our foreign subsidiaries as well as U.S. federal income tax expense.
Income tax Income tax expense was $39.2 million for the year ended December 31, 2023, an increase of $25.6 million, or 189%, compared to $13.6 million for the year ended December 31, 2022.
Components of Results of Operations The period-to-period comparisons of our results of operations have been prepared using the historical periods included in our consolidated financial statements. The following discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this document.
The following discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this document. Revenue The majority of our revenues are generated from transaction fees, which vary based on the type of service the customer utilizes.
This increase was driven primarily by an increase of $18.5 million in employee compensation, benefits and other employee-related expenses partly as a result of an increase in headcount as well as an increase of $9.0 million in consultancy expenses and information technology expenses to support our growing volume and business 46 Table of Contents requirements.
This increase was driven mainly by an increase of $19.2 million in marketplace partner commissions, an increase of $9.1 million in employee compensation, benefits and other employee-related expenses as a result of an increase in average employee headcount, which was partially offset by the impact of our workforce reduction plan discussed above, and an increase of $3.0 million in third party contract and consultancy expenses.
Excluding these drivers, transaction costs increased by $7.1 million or 7%, in line with volume increases of 8% during the year ended December 31, 2022, as compared to the same period in prior year.
Transaction costs for the year ended December 31, 2023 were impacted by an increase in chargebacks and other transaction losses of $3.4 million and an increase in Capital Advance losses. Excluding the impact of these non-volume related costs, transaction costs increased by $6.5 million, or 6%, while volume increased by 11% compared to the prior year period.
See Note 11 and Note 21 to our audited consolidated financial statement included elsewhere in this Annual Report on Form 10-K.
Please refer to Note 13 to our consolidated financial statements included elsewhere within this Annual Report on Form 10-K for additional information. ​ Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP.
We primarily generate revenues when Payoneer customers use the funds in their Payoneer account to make a payment, make a purchase or to withdraw the funds locally. Our revenue growth is based on (i) increasing the monetization rates of Payoneer services; and (ii) growing the volume of transactions processed through the Payoneer platform.
With a multi-currency Payoneer Account, businesses around the world can serve and transact with their overseas customers, suppliers, vendors, and partners as if they were local. We primarily generate revenues when Payoneer customers use the funds in their Payoneer account to make a payment, make a purchase or to withdraw the funds locally.
Historically, our revenues have been strongest during the fourth quarter of every year, primarily as a result of higher eCommerce sales during the holiday season.
Seasonality Given the diverse nature of our customers and their businesses, Payoneer’s revenues experience seasonal fluctuations as a result of consumer and business spending patterns. Historically, we have seen revenues increase in the fourth quarter of every year, primarily as a result of higher e-commerce sales during the holiday season. Key Factors Affecting Our Performance Continued Growth of Digital Commerce.
We also generate revenues from interest earned on certain customer funds. The majority of our revenue is recognized and collected upon the completion of the underlying transaction. In some cases, revenues are collected through intermediaries.
Transaction fee revenue principally consists of fees for withdrawals and usage. We also earn revenues in certain instances from volumes coming into the platform related to our B2B services and through our Checkout offering. We generate significant revenues from interest earned on customer funds held on our platform.
Our net loss for the year ended December 31, 2020 was $23.7 million after considering non-cash charges primarily consisting of $17.1 million in depreciation and amortization, $11.1 million in share-based compensation expenses as well as other non-cash items.
For the year ended December 31, 2023, we had $93.3 million of net income, which includes non-cash expenses of $65.8 million related to stock-based compensation and $27.8 million related to depreciation and amortization, as well as a $17.4 million non-cash gain from change in the fair value of warrant liabilities and non-cash income of $11.1 million related to deferred taxes.
Growth of digital commerce has accelerated due to the COVID-19 pandemic in 2021, shifting buying preferences to online from offline. As more economic activity moved to the digital world, we saw more businesses adapting and moving online, broadening the number of potential customers we can offer services.
In 2020 and 2021, we saw a significant acceleration in digital commerce adoption as consumers and businesses shifted activity to online channels due to the COVID-19 pandemic.
The Warehouse Facility bears interest of the greater of 0.25% or LIBOR, plus 9% per annum and has a revolving maturity of 36 months from the commencement date with a payback period of an additional 6 months after the revolving maturity date.
See Note 11 and Note 22 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information. ​ ​ 46 Table of Contents Effective July 1, 2023, the Warehouse Facility interest rate was updated to the sum of the Daily Simple SOFR and 0.26161% plus 9% annually and has a revolving maturity of 36 months from the commencement date with a payback period of an additional 6 months after the revolving maturity date.
Investment in new services to drive growth We will continue to make significant investments in both existing and new products and services, including B2B AP/AR, Working Capital and Merchant Services. By delivering more services to our customers, we can improve their ability to manage and grow their businesses.
Our financial stack is designed to meet the end-to-end AR and AP needs of SMBs with cross-border business. ​ We will continue to make significant investments in both existing and new products and services, including for those customers who operate B2B and direct-to-consumer models.
Overview As the world’s go-to partner for digital commerce, Payoneer democratizes access to financial services and drives growth for millions of businesses of all sizes around the world.
We have continued to see growth in digital commerce, as businesses of all sizes increasingly look to access the global digital economy and as the market for goods, labor, and services becomes more global and more distributed.
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With a single connection to Payoneer’s global payment and commerce-enabling platform, our customers can transact globally as easily as they do locally, empowering participation in the digital economy and driving growth for enterprises, marketplaces and SMBs worldwide.
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This Management’s Discussion and Analysis of Financial Condition and Results of Operations focuses on a discussion of 2023 results as compared to 2022 results. For a discussion of the 2022 results as compared to 2021 results, refer to Part I, Item 7 of our Form 10-K filed with the SEC on February 28, 2023.
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Payoneer was founded in 2005 with the idea that technology and the internet were transforming commerce and making it possible for anyone, anywhere to build and grow a digital business.
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Overview Payoneer is a financial technology company purpose-built to enable the world’s small and medium-sized businesses (“SMB(s)”) to grow and operate their businesses around the world by reliably and securely connecting them to the global digital economy.
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From the beginning, we recognized the importance of offering services to both sides of two-sided commerce networks: small businesses who would need help navigating the increasingly complex digital economy, and marketplaces who would need help supporting their increasingly distributed seller-base. Over the past 18 years, we have built a one-of-a-kind platform designed to serve the needs of digital businesses globally.
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Payoneer’s financial stack makes it easier for millions of SMBs, particularly in emerging markets, to access global demand and supply, pay and get paid, and manage their cross border and other needs from a single platform.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur foreign currency exposure includes currencies of the countries in which our operations are located as well as certain currencies in which the platform services ours customers and may be subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro, Canadian Dollar, Australian Dollar, New Zealand 54 Table of Contents Dollar, Vietnamese Dong, Danish Krone, Chinese Yuan, New Israeli Shekel, Philippine Peso, Bangladeshi Taka, Indian Rupee, Pakistani Rupee and Hong Kong Dollar.
Biggest changeForeign Currency Risk While most of our revenue is earned in U.S. dollars, our foreign currency exposure includes currencies held in the countries in which our operations are located as well as currencies in which our customer funds are held and may be subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro, Japanese Yen, Chinese Yuan, Australian Dollar, Canadian Dollar, New Israeli Shekel, Philippine Peso, Indian Rupee, Bangladeshi Taka, Pakistani Rupee, UAE Dirham, Pound Sterling, Indonesian Rupiah, South Korean Won, Mexican Peso, Polish Zloty, Vietnamese Dong and Hong Kong Dollar.
Interest Rate Sensitivity Our cash and cash equivalents, as well as customer funds, as of December 31, 2022, were held primarily in cash deposits and money market funds.
Interest Rate Sensitivity Our cash and cash equivalents as well as customer funds as of December 31, 2023, were held in cash deposits and money market funds.
The fair value of our cash and cash equivalents, as well as customer funds, would not be significantly affected by either an increase or decrease in interest rates due mainly to the short-term nature of a majority of these instruments. Additionally, we have the ability to hold these instruments until maturity, if necessary, to reduce our risk.
The fair value of our cash and cash equivalents as well as customer funds would not be significantly affected by either an increase or decrease in interest rates due mainly to the short-term nature of these instruments.
As of the years ended December 31, 2022 and 2021, respectively, a hypothetical 1% increase or decrease in interest rates could have a material effect on our financial results, based on the customer funds balance as of each year end.
However, as of the years ended December 31, 2023 and 2022, respectively, a hypothetical 1% increase or decrease in interest rates could have a material effect on our revenues and earnings.
As of the years ended December 31, 2022 and 2021, respectively, a hypothetical 10% increase or decrease in current exchange rates could have or could have had a material impact on our financial results. ​ ​ 55 Table of Contents
As of the years ended December 31, 2023 and 2022, respectively, a hypothetical 10% increase or decrease in current exchange rates could have a material impact on our financial results. In addition, some of our services include the opportunity for Payoneer to generate revenues from foreign exchange transactions as part of the payment delivery process.
In addition, some of our services include the opportunity for Payoneer to generate revenues from optimizing foreign exchange as part of the payment delivery process. Our ability to generate such revenues is partially dependent on external factors such as market conditions as applicable regulations and our ability to negotiate with third party financial institutions.
Our ability to generate such revenues is partially dependent on external factors such as market conditions, applicable regulations and our ability to negotiate with third party financial institutions. The impact of these efforts to optimize foreign exchange can be material to revenues and earnings. ​ ​ 52 Table of Contents
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Foreign Currency Risk Most of our revenue is earned and expenses are incurred in U.S. dollars, and therefore most of our revenue and expenses are not currently subject to significant foreign currency risk.
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The impact of these efforts to optimize foreign exchange can be material to revenues and earnings. Fluctuations in foreign currency exchange rates may cause us to recognize gains and losses in our statement of operations.

Other PAYO 10-K year-over-year comparisons