Third Bridge专家访谈称Nuvei收购Payoneer的监管许可风险总体可控但缺乏新增事实

[[00:01:26]]
The potential Nuvei-Payoneer merger was announced in June 2026. Where do you think the initial attraction to Payoneer from Nuvei came from?

[[00:01:51]]
I wasn't necessarily in the room where it happened, as they say, on exactly what got it going. There was large speculation for a given period of time, which was even published in Reuters in which, "Oh, Payoneer might be for sale or looking for acquisition." This had gone on for quite some time. I imagine that at that time when I was there, it had come up. They adamantly denied it and nothing happened, but eventually something did happen as we can see here. In general, I'm not terribly surprised by it. I think there's a lot of synergy as it relates to two decently sized organisations coming together to look at the enterprise and SMB type of services that they provide and hopefully building a stronger foothold also in some areas of North America like them being a Canadian entity.

[[00:02:48]]
Payoneer mentioned in its Q1 2026 earnings call that it takes 18-24 months to get the payment services licence. The company has licences across the US, China, Hong Kong and the EU, plus nearly 100 direct banking relationships. When thinking about what attracted Nuvei to Payoneer, how do you weigh the regulatory licensing footprint vs customer base vs technology as the main asset that was driving the acquisition?

[[00:03:28]]
In my opinion, it was probably largely the relationships. In the fintech space, acquisitions are often made on relationships and footprints more than customer base, if that makes sense, because a lot of times, it's seen as very difficult to go and obtain a licence. Once you obtain it, then it's just maintaining, which is typically easier, but maintaining can often be the hurdle. I would imagine that, that is one of the bigger drivers as to the deal behind it. I would also speculate on my own personal side that there was a pretty significant fluctuation in stock price for Payoneer all over the place, quite frankly. Within one year, it moved 40% or something like that. I think the lack of stability in the stock price also is something that we talked about a lot generally within the industry and at the company. I'm sure this also was something interesting for Payoneer to try and go back to the private world because I think that's going to end up being the goal here. I think I honestly don't know, but I believe that's what would happen.

[[00:04:42]]
When you say relationships are the main acquired asset driving this, are you talking about relationships with banks, specific regulators or potential customers?

[[00:05:00]]
I think relationships as it relates to regulators and also our GTM teams have deep relationships within their given jurisdictions. The GTM teams within Payoneer were very connected. I think a lot of what you're getting there are those types of relationships as well as you continue to grow the customer base, but not necessarily that the customer base itself is the relationship. More the banks, the banking partners, the regulatory relationships as well were the main focus, but secondary to that, the GTM relationships as well, I think, are helpful because each market has its own GTM head and that GTM head is very, very, very involved in the local scene, whether it be Argentina, Ukraine, what have you.

[[00:05:48]]
How defensible and hard to replicate is Payoneer's relationship footprint?

[[00:06:01]]
I think overall, certain jurisdictions are going to be easier, some are going to be harder. In today's world, I think it's more difficult to get a banking relationship, also a little bit less common considering the often use of bank charters these days. They're handing them out all over the place. I think, for example, getting a relationship with Citi is a very long and arduous process. Not just at Payoneer, but other fintechs as well, it's valuable to say, "Hey, I have a banking relationship with X bank or I can move money to X country. I think people realise now how difficult it is to get started. It's almost the idea of instead of starting a business, you buy a business. I do think that those relationships are helpful. I think also, again, back to regulators, working with the different regulators, they know especially in areas like the EU or UK specifically, they know who's good, who's bad, who makes sense. They very much will say, especially in the UK, for example, "Hey, this person is not fit for the role," like they'll just tell you that. There are relationships with actual people that matter as well. If the regulator trusts that person, that MLRO, that BSA officer, what have you, that can actually go a long way as well, if it makes sense.

[[00:07:29]]
In a potential merger such as this, how much risk is there that people holding strong relationships with regulators may leave the company? How much does that hurt the value-add that Nuvei might see from acquiring Payoneer?

[[00:07:48]]
Yes, absolutely. Yes, I think key person risk is going to be wherever you see it. I think it's a matter of how it's handled. I will say like in my time at Payoneer, nothing but good things as far as when I worked with them, whether that's when I was interfacing directly with the CEO or the different counterparts across the world as I've been to most of their offices. Nothing but good things, nothing but trying to put the people first. I couldn't see that people would just immediately jump ship unless they had some inclination of, "Hey, you are on the chopping block or something like that or we're going to be winding down the X licence." That being said, I don't think there's too much risk as it relates to the key person, let's say, in that relationship.

I do think that it's always possible. It's hard to know until the process gets a little bit further along, frankly. I'll quote a separate experience to hopefully give some context. In a discussion I had with someone literally yesterday, they were saying, "If we have to change the name on the applications to the regulators of who's involved, they pay attention to that and we want to try and avoid that whenever possible. We don't want…" In this case, they're talking about someone they were looking to bring on and they were consulting with me about something. That is an issue for the regulator. It could cause a tiny bit of strain, but I've never seen it be like a showstopper or anything like that.

[[00:09:23]]
Is there anything else to consider regarding transferring regulatory licences from Payoneer to Nuvei? Do you see any issues arising there?

[[00:09:36]]
It's possible. Everything is subject to regulatory approval. If there are issues with the structure of Nuvei, and again, I don't know them super well. Their last filing was quite a while ago, so I don't know what their situation is like, but it is possible that the regulators could say, "Hey, this is not structured correctly or we don't agree with the tenure of the person in X role," something like that. It just depends, like, the UK regulators are always really, really strict. China is going to be tough just because it's a US and Canadian-based business, and there are opposite geopolitical forces there. Then others are pretty easy going. I think the US regulators and the EU regulators generally see things the same and so we won't have too many issues there as long as all the proper paperwork is filed, they don't care too much.

[[00:10:32]]
Payoneer's checkout business now runs on Stripe – it has migrated over 90% of its portfolio. Mastercard seems to be another relatively important new relationship. How do you expect Nuvei to handle those integral relationships?

[[00:11:04]]
I'm not familiar with the current partnership model that Nuvei has, but I can say that newer relationships are a little bit more tenuous, especially with Mastercard specifically, I would say. They'd want to see very robust processes in place and continuity, especially with Mastercard. They'd want to make sure that if you've got a dispute process, MCC monitoring, things like that, it's a robust process. I have seen where changes in an organisation like this have triggered reviews where they're like, "Oh, now you're owned by so and so. great. We haven't looked at you guys in a couple of years. Let's come back and take a look." Again, this is a new relationship, so it doesn't apply, but I think there is some risk there around subsequent reviews by existing partners, let's say. Newer relationships, I don't know enough about Nuvei and their situation to really say too much, but I can say that overall, Mastercard is pretty reasonable when it comes to what they're looking for, and they're very global multinational brands. Same thing with Stripe. Stripe operates all over the world. I don't think that them being new relationships will be much of an issue other than maybe the legal and paperwork and that kind of stuff.

[[00:12:24]]
How complementary are the two customer bases? I understand that Nuvei is more enterprise merchant-acquiring vs Payoneer being more SMB-focused.

[[00:12:43]]
Yes, absolutely. That's a fair question. I think Payoneer outwardly states that it's very SMB focused, but you have to keep in mind, and I believe this is public information that companies like eBay and other very large multinational corporations also work in different capacities with Payoneer. I think some of that will be maybe some overlap just generally like, "Oh, enterprises, enterprises," okay? I think there will be overlap with it. I think, again, not knowing Nuvei as well, it's possible that Nuvei may not understand the nuances of what a small, medium-sized business might have vs what you would typically see in an enterprise, and I'll try and give you an example. Enterprises typically have more robust compliance programmes, great documentation, clear understanding of the last time they tuned their transaction monitoring solution or whatever type of compliance control. Smaller companies might not have that. I think overall, there is a very large population of small- and medium-sized businesses at Payoneer, and Nuvei would probably want to leverage the experience and the expertise of Payoneer in that mindset around what we have. Where I'm going with this is, I think they are complementary. I think there is also some overlap, frankly. I'd be actually curious to see how the overlap would play out. Then also qualifying saying that for Nuvei, I don't know exactly what their customer base looks like, so I can't say too much on their side.

[[00:14:31]]
Where specifically might the overlap that you mentioned show up? How can Nuvei and Payoneer deal with that without raising issues?

[[00:14:48]]
That's an alignment at the leadership level as it relates to addressing that. The question is how would they address the overlap? I think Payoneer has a pretty robust programme around business continuity and also like pretty clear understanding of who does what in the organisation and because of that, they should at least know who is doing what to identify duplication and then effectively understand, okay, we're going to pick A or we're going to pick B. In these types of situations, it's often that there is a mix, not simply Nuvei coming in and saying, "All right, we're getting rid of half of the Payoneer staff," for example. That being said, anything is possible, frankly. Like I said, not in the room where it happened, so a bit of speculation or opinion. Ultimately, I think, to the earlier point, the customer bases are complementary, and I think they will find some synergy between the different processes. I think where the real friction could be is, as you're hinting at here, the deduplication and alignment of policies, procedures and processes for sure.

[[00:16:08]]
I realise that may have been pretty directed at specifically overlap within the customer base. Within the organisations more broadly – as you mentioned, all of those processes or personnel – do you foresee any specific areas where there might be overlap that would need to be addressed, outside of what we discussed?

[[00:16:34]]
I think in general, the biggest piece you'd want to understand is governance, public vs private company and how we're looking at governance will be different, as you can imagine. The ERM function at Payoneer might be more robust or might not be. It just depends how you see that. I would expect in specifically the ERM function, there may be overlap or this is no-longer-necessary-type of discussions, quite frankly. We really don't know, of course. We don't know for sure, but I do suspect that, that would be an area where deduplication might be highly focused. Then from a compliance perspective, that really depends. It depends how well staffed Nuvei is and if they are focused on these other jurisdictions. Payoneer generally has a model in which transaction monitoring is handled globally. Sanctions screening is handled globally. Enterprise-wide risk assessments are handled globally with regional deliverables. In the end, it's important to understand that Payoneer does have a global design across all these licences. If Nuvei does not have that global exposure, they may have no choice but to bring in a lot of these other folks from a compliance perspective.

[[00:18:15]]
If Nuvei doesn't necessarily have the capability to handle things globally as Payoneer has been doing for years, how laborious and investment-intensive is the process to ramp that up?

[[00:18:40]]
It depends if they're going to run two separate entities or if they're going to run a single entity. Within the design of Payoneer, there are multi-tiered entities. Each entity has its own board. The EU has its own board, has its own functional elements to meet that local requirement. UK, same thing. Hong Kong, I don't know if we mentioned all these, Singapore, Australia, there are many. They all have their own board. While there may be overlap, they all have their own dedicated governance elements and stuff. There are some nuances around control elements and things like that. I think having a really good understanding of who does what and an index of all the controls would be the first step in understanding how laborious to your point, it would be. I think we had earlier said something around like 18 months. I think it would take a good bit of time to really understand and detangle what's going on there. In the meantime, there will be some folks who are doing the same job, frankly, and it's going to happen. I think, they're going to try and mitigate as much as they can upfront with the programme office team and other teams like that at the global level at Payoneer, but I can imagine that I don't really know much about Nuvei. I don't know what their situation looks like. I don't know if that makes sense.

[[00:20:08]]
There are a few regulatory hurdles that are still preventing the deal from finalising, including cross-border payment licences in China and India and some processes in Israel and Canada. Do you have any insight into what those specific regulatory hurdles might look like? Would you expect them to be rectified in the near future?

[[00:20:45]]
I'm actually surprised even six months later that it's still going on, especially for Israel. That was a pretty easy one from what we scoped out originally. Yes, again, it was India, China, Israel and was it Canada?

[[00:21:01]]
Yes, Canada.

[[00:21:03]]
Canada, we had scoped everything out for that a while ago. I'm not sure exactly what the roadblocks are today other than maybe they internally paused it because they knew this was coming, so why get a Canadian licence if you're going to be bought by a Canadian entity. Just for example. I can't speak to what's up with Canada because we had a full-fledged policy procedure and process in place to run that entity and a designated individual over a year ago. I don't know what the regulatory hurdle would be with that. They're just not being super clear. India, I know we have an entity spun up. We have local operations. We have an officer, like many of those main hurdles have been cleared. What's left to clear? I don't know because of the fact I haven't been there in a little while. I would say from my knowledge and generally industry information, India is a little bit tougher in that list. Canada is a lot easier and straightforward. India is a bit tougher. They have some unusual requirements from a technology perspective around things like KYC and other elements. Also, they are pretty strict as it relates to who's running what function, where that function is run out of from a compliance perspective.

China, of course, geopolitically is opposed. It's very tough from a global company perspective to understand how to comply with sanctions in China that are illegal to comply with in the US and vice versa. There's a lot of complexity, but the China team is very dedicated and I've seen them overcome some pretty amazing stuff. I know we'll probably talk about that a little bit more. Overall, I would say Canada has no hurdle, if any, especially at this point. The other hurdles would be more formalities for folks like India. China, China is just going to be a wildcard, quite frankly, because things could change quickly. You just don't really know what they have going on. Specifically a hurdle, I would say it'd be more paperwork related as it relates to Canada. Then for India, probably more focused on technology, meeting technology requirements from the local regulators as well as office requirements as far as headcount and things like that. My understanding is that they've been working towards meeting those requirements for more than a year, so it shouldn't be too bad.

[[00:23:41]]
Linking this back to the risk that a key regulatory relationship holder might leave Payoneer, how does that risk change when you become the target of an acquisition during an ongoing and relatively complex process, such as the ones in India or China?

[[00:24:12]]
Sure. Let me restate the question to make sure I understand. You're saying, let's use China as an example. If the process is ongoing and earlier in the discussion, we flagged key person risk, how likely is that to influence the ability to complete the India or China licence? Is that correct?

[[00:24:29]]
Yes. How much change is there to the ongoing licensing processes when Payoneer will likely be part of Nuvei? How much risk does it add?

[[00:24:47]]
I think there are going to be some changes around who actually is the owner, who's the person involved, what does this look like, demystifying who does what. I don't think that presents significant risk unless… Again, putting key person departure aside, like key person risk and then departing, putting that aside for two seconds. Generally, the regulators want a clear picture of who does what and more importantly, who is involved. If we're going to name so and so, John Smith, and then it changes later, they would look at that unfavourably. I don't think that this merger presents significant concern unless there's something within Nuvei where they're not able to operate in that jurisdiction or the Chinese government or something takes issue or I'd say the… Chinese government, you could call it, takes issue with some of the people involved at Nuvei.

If someone is on the board of directors, that's not favourable or something, it's possible, but there are ways around that. You change out your board of directors for the China entity or you do something else different. There are options there. I don't see anything super significant that would put risk to the merger as it relates to these, in my opinion. However, I do want to caveat like I don't know too much about Nuvei themselves, if that makes sense and what their current structure looks like or what their expertise looks like in China. I imagine they're just going to leverage everything Payoneer has and has done so far.

[[00:26:34]]
Nuvei and Payoneer have both pointed to a mid-2027 close date for the deal. Based on your experience on the regulatory side, how much confidence do you have in that timeline?

[[00:26:47]]
In one year from now, as an opinion and based on my experience, I think there could easily be delays. It just depends on prioritisation at both entities. If we're not properly putting that as a priority to close on time, it won't happen. As with many larger organisations, it becomes very tough and complicated when you're managing an audit in X jurisdiction along with 12 other things. If I was Payoneer, I would dedicate a specific team that would focus on driving this specific task, but if they are not doing that, I would say it could easily be at risk. It's all dependent upon if they're doing that, frankly, which I would imagine they would, but I don't want to say if they are because I just don't know. When we have a team dedicated to manage global programmes and not just compliance, but more global prioritisation, but I know there was a departure from the company, the person who is the Chief of Staff to the CEO, who used to lead that group. I don't know if there have been other departures as well. I have heard a few. Again, this is outside compliance, outside regulatory.

[[00:28:10]]
Payoneer applied in February 2026 to establish a national trust bank in the US, framed as central to its stablecoin strategy. You indicated that you expect this work to continue and be relatively unchanged. Do you see any roadblocks emerging in that process?

[[00:28:44]]
That's a great question. Very specifically, it is very common within the US right now. This is not a unique thing for Payoneer. There are many organisations going after these types of trust charters and things like that because it's so common, I don't think there's too much risk. If there is a change in the presidency and general direction, they could start tightening up applications and tightening up oversight. Generally speaking, my personal knowledge and understanding is it will just proceed unless there's a strategic change, which I greatly doubt, it will proceed as expected. I think it's important to mention that getting a bank charter raises regulatory requirements around what you do, how you do, when you do. They're largely complying, but states look at things differently vs the OCC, for example. The OCC is the federal regulator, and they are one of the harder ones in comparison to Kansas or Missouri or New York. New York is tough, but I think they'll see more oversight and more proving as time progresses. I think in the immediate, no issue. If there's a change in presidency and things like that, whenever that's due to happen, God knows, they could see a change potentially in oversight and there could be a tightening of applications and a tightening of controls around these different institutions that are getting these types of charters today. Happy to explain more around stablecoin and other things as well, but I wanted to mention that.

[[00:30:33]]
Regarding the stablecoin strategy, if everyone is doing it, is Payoneer ahead of or behind the curve? Is this something that can really differentiate the company?

[[00:30:50]]
That's a great question. They're on par with the curve. I think literally everybody. If I'm talking to a fintech and they're like, "Yes, we're not getting a charter," I'd be like, "Really, why?" Like everybody is. Every name, every fintech you can think of, everybody is doing it, big, small, medium, doesn't matter. The important thing to also distinguish is that Payoneer has built the muscle. They're just going to make it bigger because they already have regulatory relationships and oversight responsibilities. They have a robust programme for internal audit, external audit and all the things that come with it in governance, some of what I built for them. I don't think it's necessarily a differentiator. I do think it's more of on par with expectations trying to keep up. Smaller fintechs, more nimble fintechs are also doing the same. Yes, I wouldn't consider a differentiator. More than that, I would talk stablecoins for a minute, so in general, what they're talking about doing is utilising what's called a stablecoin sandwich in the most common terms.

You can do on-ramp, off-ramp of a stablecoin sandwich in which basically you are starting with funds, fiat, cash, what have you in Canada. That gets converted to USDC. USDC is used to be transferred over the virtual border, which is nothing, doesn't exist. Then the USDC in the recipient account is then converted to fiat. You have now basically wired funds over the border in a minute instead of three or four days. This is very common right now, something everyone is pursuing and a bank charter simplifies the regulatory needs to provide that and other related services, frankly.

[[00:32:43]]
When you say everyone is trying to get a bank charter right now, are they all pursuing the same stablecoin strategy?

[[00:32:57]]
I can't speak exactly to Payoneer's exact exact strategy, but generally speaking, the on-ramp, off-ramp and stablecoin sandwich type of stuff, the answer to that is yes. If they're doing more than that, I'm not specifically aware, but I do think that they have something that other smaller fintechs don't, which are those banking partnerships. When you want to actually offboard those funds, you've got… Let's make a better example. You've got someone moving money from the US to India or US to Malaysia. I don't know, pick your country. A lot of companies can say, "Cool, I'll get you into USD or I'll get you out of USD in the US," so you're moving from USDC to USD, US dollars, but being able to on-ramp in essence, "on-ramp," put money into USDC from US dollars, then get it to Malaysia in USDC, that's easy. Getting it out in Malaysia is the harder part or out in Hong Kong or out in whatever. If you have those regulatory relationships and those banking relationships and you own that full flow, there's lower fees because less partners are involved in moving the money all over the place.

That's where I think Payoneer at their scale and global nature could really do well with this, and that's been their plan for a while. I think when comparing to smaller, more nimble fintechs that are missing those relationships, the fiat offboarding per se in these random countries, I think that's a big difference. Otherwise, you have to leverage partnerships with companies that also take their own fees. When you have those relationships directly, you can be vertically integrated is the idea.

[[00:34:49]]
What do the fees look like? For someone who doesn't have the off-ramp relationships that Payoneer might have, how much more do you think they would be paying in fees?

[[00:35:05]]
I mean that would be really tough to say that because I'm not on the sales side negotiating the contracts. In general, the number 20% sticks out to me. It's really more of a guesstimate to be honest, because in general, the idea is simple. When you are vertically integrated in any model, whether you're talking about real estate or whatever, the iron barons back in the 1920s or whatever it was, when they're building the railroads, and they're building monopolies. The idea basically was if you're vertically integrated, you control the cost across the line. If you own the… Using an example of a pencil. Bear with me because hopefully, this will make sense, but using the example of a pencil. You sell pencils, great. You rely upon those pencils to be provided by someone else, who relies on someone else to provide the wood and the graphite and who relies on someone else to go deforest, pull the trees out of the ground, whatever, cut trees down. If you own that whole process, you control the costs, so you can keep your fees lower, just in general, vertical integration, simple principle. 20%, I guess, is a rough number, if that helps, but just trying to give some colour around that.

[[00:36:32]]
Payoneer noted in its Q1 2026 earnings report that B2B volume is growing 30%-plus, while revenue is growing a bit slower, around 25%, due to growth in China and specifically the lower take rate in the China goods business. How much more runway for growth is there in China? Can the company do anything to increase that revenue growth as volume growth increases as well?

[[00:37:16]]
I think the revenue growth and volume growth is helpful to consider. I think you don't want to spend USD 1 to make a USD 1 and sometimes that is what ends up happening. I think that's a little bit of what they're facing in China. There's also a ton of competition. There were many discussions about this, specifically in China. China has been a big growth market for them for a long time. I do think, in general, it would continue. I noticed in the questionnaires, you mentioned Airwallex. I think in general, they are competitors, and there is ongoing and continuous competitive intelligence that Payoneer is doing to ensure that they remain competitive in that market against people like Airwallex, for example. I can try and expand a little bit more, but maybe I just need a little bit more of what you're looking for.

[[00:38:14]]
What does the competitive set within China look like? For context, during my research, it seemed the China exposure that Payoneer has and the relationships that are already in place differentiate it pretty significantly from some of the other players in the industry. What more can you say about its China exposure, generally?

[[00:38:42]]
I think generally speaking, there's a very robust team in that area. They work very tirelessly to bring in different leads and to bring in different clients, small to medium-size and larger enterprise. PingPong is a big competitor in the space, Airwallex, obviously, as well. Then Alipay and others are also competitors in some facets. I think there's deep partnerships with some companies that operate in that area. I don't want to say who they are, but in general, like e-commerce and things like that is really big. I think there's also supplemental markets in that region that are helpful like beauty and skincare, for example, trying to service that in areas of the market like in Korea. Again, different country, but in that area of the world, the more services that you provide, the more well-known you are in a way. I think, again, there's ongoing and continuous competitive intelligence against the other organisations that service that area. I do expect that the growth will continue. I don't expect that the Nuvei work would have any implication. To my knowledge previously, it's generally that China runs independent of the rest of the organisation in many ways to allow them to continue just to run.

[[00:40:07]]
What can Payoneer do to increase the take rate in China, which has been worse than it has been in the rest of the world? Are there any strategic levers that you think the company can pull to address that issue?

[[00:40:26]]
There were some things that were being looked at around acquisitions. I don't know where they went. I obviously can't say too much about it, but there are some things to do around acquisitions in that area of the world that could also help with the take rate. That being said, where they're at, what's going on, I don't know. I can't really share that. I think that's always a good way. The way what Nuvei is doing possibly is to get better global exposure, they're buying a company instead of building it. Buying someone with a better licence in China would make sense, in my opinion. I don't know that they're going to do that. It's a lever to pull, so to speak. Local talent, believe it or not, is really good as well. There's a lot of good local talent there. Sometimes bringing over one person who does go-to-market at, I'm making this up, this is completely fictional, but pulling in someone from PingPong over to Payoneer or from blah, blah blah over to Payoneer could also be a lever to pull as well because there's deep relationships. It's very relationship focused over there.

Then lastly, I think pricing, you could, opinion, take the approach of an Amazon or Walmart and basically underprice your competition for long enough that they go out of business, and then you raise your prices accordingly. Different levers to pull in different ways. I can't say that, that is what they are or are not going to do, but those are levers that could certainly be pulled to help with the take rate, I think. Not just the take rate, but more just bringing in more customers is how I look at it. From a technology perspective, there are changes that could be made as well. That would help. I think there's a lot of inefficiencies and duplicative nature in some of the things going on because they run as a separate entity practically compared to the rest of the world.

[[00:42:28]]
That last point is interesting about it running as a separate entity. From more of a compliance infrastructure standpoint, is that a whole separate team that's operating in China?

[[00:42:43]]
Yes. You also kind of have to because of the restrictions of China, and again, that sanctions piece. I'm not exaggerating when I say it's like you can't comply with US sanctions in China and you can't comply with Chinese sanctions in the US because they're directly competing. This one list says, don't allow John Smith. The other list says you must allow John Smith, for example. There absolutely have to be separate teams, but even on the sales side, sales, compliance, product teams, it's, in its own right, a separate entity, not just from a licence perspective, but a unique like self-sustaining business.

[[00:43:30]]
According to recent reports, marketplace SMB is growing much slower, pointing mostly to tariff impacts and general inflation. How at risk is Payoneer of stagnation in the more core marketplace SMB vertical?

[[00:43:57]]
It's a great question. I would say, generally, within the market, there's been a big focus on serving those types of clients. I think they're facing competition all over the place, left, right and centre from a lot smaller, maybe more nimble fintechs. That being said, let me just restate the question. Your question is, how long will that continue or will it continue as far as stagnating for the SMB growth in their core markets outside of China, correct?

[[00:44:36]]
Yes, exactly.

[[00:44:39]]
Speculatively, from my perspective, I think it will continue just because of the competition saturation in the market. Everybody wants to service and anyone can spin up a fintech these days. With the rise of AI, I mean you could spin up an app or whatever, but within two weeks, you're live. I think there's even more competition now from potentially less-competent individuals entities, what have you. The regulatory environment in the US is, I don't want to say, diminishing, but becoming a little bit more loose. Fintechs that can come in without direct regulatory oversight can eat their lunch easily, very easily because there's no direct regulatory oversight that they have. It's possible that it will continue to be stagnant or tough to push. I know that they were trying a bunch of different things generally around services offered and things like that. What I have seen in the industry is that to remain competitive or to try and grow, companies have decided to go into higher-risk verticals that are underserved, meaning gaming, prediction markets, loan and lending type of activities, weapons, things that typically are shied away from, even adult entertainment, things like that. Again, the existing Mastercard and Visa rules still apply, blah, blah, blah. In general, there is a greater risk appetite within fintech in the US to onboard and work with these types of businesses that was not in place when they really grew their SMB market in, let's say, seven years ago.

[[00:46:37]]
Is there anything that currently sets Payoneer apart from the smaller players? Does any competitive moat still remain for a company such as Payoneer?

[[00:46:54]]
Again, focused specifically on SMB. I do think so. I think there are services that they provide and global reach that can't be understated. I think that is their moat. Same back to the original earlier point in this discussion, we talked about regulatory relationships and some companies will get purchased just to get their licence, things like that. That's the same thing I see here is that they have these relationships, these banking partnerships, these long-standing relationships that operationally allow them to settle in a number of different countries. These smaller fintechs that are coming in and taking on SMBs sometimes will maybe have multiple small fintechs that they work with. If you're an iGaming business, you might settle for three different rails because each one can only do certain places. Your fintech is really focused on Singapore. This one company does Singapore for you, but then there's other rails, they only does the UK, for example, or things like that. They would provide a consolidated experience and a number of banking relationships. I think with the stablecoin strategy, if that's executed well, they'll be able to continue to win back SMBs because stablecoin is the future in many, many ways, no matter which one you're looking at and looking to work with.

[[00:48:22]]
Payoneer's CFO mentioned in the Q1 2026 earnings call that the planned price increases were not enacted on its core set of customers. What does that tell you about the fee pressure that the company is feeling from the smaller disruptors that we discussed?

[[00:48:50]]
Yes, in my personal opinion only, I believe that they are likely trying to focus more on the real true ICP, if you know what I'm referring to. They're really looking at trying to focus on the customers who make them the most money without too much high cost to serve. If you're only moving, let's say, USD 10,000, it's another good example, small SMBs. If you're an SMB, is moving USD 10,000 a month, that's not super profitable for them. It might cost more, this is fictional, but it might cost more for them to service you. It's not really advantage for them to have you. You should go churn off of their platform to someone else. When they're raising fees, I think they're likely going to see either people pay for it and stay or they naturally churn. If folks naturally churn, they're thinning the herd and they're lowering their cost, they're getting rid of the clients who they don't want to lose money on per se, if that makes sense. Then in essence, you're decreasing your customer base to make it more profitable. You're leaning up. Then you would lean up your staff theoretically as well, in my opinion. Again, purely opinion. I'm not saying this is a plan or anything that they're doing, but that's what you do. That's what I think that they would likely be doing in that situation is trying to lean up a little bit.

[[00:50:12]]
That's an interesting point, leaning up in regard to your list of customers and potentially in manpower as well.

[[00:50:22]]
Of course, with the rise of AI as well, I think they're very focused on that. They've got a new office in Israel, and they've got offices all over the globe, including continuity in Spain as well. I think it's important to clarify that they want to still be very smart and they claim… This, I don't think is an issue to share, but like it's a meritocracy is what the CEO would say all the time. It's a meritocracy, meaning if you do well, if you push hard, we will take care of you. There are no free handouts in this company is kind of where he was going with it. Again, I'm paraphrasing. I think it's important to… What I just say about leaning up also fits into the broader let's adopt AI across every company in the world right now and meritocracy.

[[00:51:16]]
Do you think there are any specific verticals or areas of the company where that leaning up and that AI capability can really make a tangible impact?

[[00:51:30]]
Speaking generally and not about Payoneer, I think it's possible sales outreach is a big area. Product development like engineers, absolutely. Then lastly, in compliance, frankly, we see a lot of work moving into leverage an LLM to draft a narrative for this case. I know that those are things that every company is looking at, frankly. I think it definitely affects those three areas. In my own personal experience outside of Payoneer, that also drives with exactly what I'm seeing at other companies and friends have told me they're seeing at other companies as well is that sales engineering and compliance are getting hit for that.

[[00:52:16]]
What portion of the compliance function consists of roles that can largely be done by LLMs [large language models] vs critical relationship holders with regulators?

[[00:52:38]]
Exactly, exactly. Right now, anyone building a compliance programme should be focused on lean headcount and relationships. The things that a bot can't do, a bot can draft your KYC procedures in a day with you prompting back and forth, a 40, 50, 60-page document and that's not bad. AI can do that, Claude, whatever, pick your poison. They can't get on the phone with a bank partner and walk them through how we're doing all of this and build comfort, clarity and trust. Also, AI is not very good at auditing itself in my personal experience. Let's say, as a compliance person, you're great or not great at drafting a prompt to build a new procedure. You then have to be extremely detail-oriented to read through the procedure, that 60-page document that was drafted for you to make sure it's all accurate, complete, clear. There's no typos. There's no like overstate as well, where they'll like overgeneralise or be overly specific in other areas. Frankly, use the calculator, but know how to do math by hand, and you'll be just fine, but in 20 years, and people are talking about this now, in 20 years and people are unaware of how to actually work an alert because it's all done by AI. We're going to have a problem because people won't understand how to actually do the long division, as you might say.

[[00:54:16]]
What percentage of a compliance department do you think are mission-critical relationship holders that cannot leave vs people that could potentially be replaced with AI?

[[00:54:48]]
In today's day and age, most compliance organisations, the largest pieces are the teams that do RFI, which send e-mails to clients asking for more information, and the teams that do transaction monitoring. Those two specific areas account for approximately 60% of the organisation and are ripe for AI automation and what I know companies are actively building today towards. There are solutions today that run those programmes for you and basically only escalate alerts to you when you need for transaction monitoring or only escalate RFI responses. It's a matter of hours, like in the grand scheme of things. By the end of the year, I expect significant… Even more so significant strides. Anthropic already built a KYC agent. It's a bit of a marketing ploy, it doesn't really do very much, but it shows where things are going. Yes, I can talk about that for hours. I've done presentations on it and stuff.

[[00:56:00]]
Of the 60% that you mentioned that are doing those more manual or menial tasks, could you realistically see one-third or 50% of them being reduced within the next two years?

[[00:56:15]]
Absolutely. Today, speaking from personal experience without naming names or anything like that, I have seen companies that are building without any… Like there's one person who runs RFIs, that's it. That's it. As you grow and scale, you build the agents to overlay and you're building a different product as you go, so definitely one-third for sure. We're already seeing it today. Citibank, USAA, JPMorgan, Block, a lot of these companies are laying off tons of people. Look at what Block did specifically. They developed Goose with compliance analysts and people helping and then fired everybody, like everybody. They'll rehire some of them, but I'm not joking, even the BSA officer was let go. Now they took it a little heavy-handed and Jack Dorsey was a little crazy about that. I definitely think a third is very reasonable.

[[00:57:22]]
Do you think it would be one-third within two years, or could it even go higher than that?

[[00:57:29]]
Yes. Absolutely. Larger organisations are going to be slower to move, but there are vendors out there today that are helping develop consolidated data sources so agents can run more efficiently. When they run more efficiently and check across multiple systems and multiple things, you then have an agent who can do what an analyst does, period. The role of an analyst will be gone. The role of someone who just simply sends e-mails is not going to work.

[[00:57:56]]
To what extent do you think the announced Nuvei-Payoneer merger would trigger further consolidation in global cross-border payment moving forwards?

[[00:58:14]]
So in general, in the market or specifically for them?

[[00:58:18]]
I'd love your opinion on each of those.

[[00:58:20]]
I think there are other acquisitions that you'll see from the Payoneer-Nuvei situation that are very, very possible. Then within the market, I'm seeing it as well, absolutely. There are small, young, nimble fintechs that are coming out. As with the typical rule, I think most of them will end up dying, but those that survive will stand the test of time and get bought out. There's a lot of private capital coming into this space. Then also in general, I think when the presidency changes, you're going to see more oversight and they're going to either die or get bought out because they're under distress.

[[00:59:05]]
Who might make sense for the merged Nuvei-Payoneer entity to look at? Is there one area that you would say might be the most interesting?

[[00:59:21]]
I think without being too specific, I think any market you want to grow in. If you're saying, "Hey, I want to expand in X country in Latin America or in general in Latin America because there are certain smaller fintechs that love servicing Latin America. Frankly, there's a reason for it and they need it. Then in the far east as well, we mentioned China, but there are other countries as well. You've got most of the biggest markets covered by Payoneer, but LATAM is one that's a challenge, frankly. If you want to get the licence, great, but if you don't, you go buy somebody that has a licence, that has the infrastructure, that has the relationships. Then lastly, I have seen broadly some really interesting things coming out of these like free trade zones. Craziest thing, I saw the other day. Free trade zones have unique regulatory requirements and oversight that allow them to be more flexible. There are some folks who are saying, well, let's really think outside the box here. A company like that could operate cross nationally with very limited oversight. Not to do bad things, but rather lower regulatory requirements as they build. If they build and it works, why not buy them, those kinds of things.

[[01:00:33]]
I think that's a great place to leave it for today. This has been super helpful and insightful. I appreciate your time. We'll likely be in touch in the future.

[[01:00:46]]
Cool. Yes, happy to chat again. Thank you so much for your time. Anything you need, let me know.

[[01:00:50]]
Absolutely I appreciate it. Have a good one.

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