Global payments company begins catering to the domain name industry.
Global payments company Payoneer is getting into the domain name escrow business with the help of former Escrow.com president Brandon Abbey.
Payoneer is a large payments company that handles payment distributions for companies like UpWork and Airbnb. It sends payments in 150 currencies to people in 200 countries.
The company acquired escrow company Armor Payments earlier this year to expand into online escrow and has now renamed it Payoneer Escrow.
Scott Reynolds co-founded Armor Payments in 2013. Armor Payments had a technology-centric approach to escrow, offering an API to third-party marketplaces. About half of its business originates through the API.
Reynolds told Domain Name Wire that Armor hasn’t previously focused on domain name escrow because “there was a well-run, well-established incumbent”. He’s referring to Escrow.com.
The desire to cater to domain name buyers and sellers grew as a number of existing Payoneer users requested it. Reynolds also says people were starting to look for an alternative to Escrow.com.
It helped that long-time Escrow.com President Brandon Abbey had left Escrow.com, the leading domain name escrow company. Payoneer brought him on to lead its domain name escrow effort.
“Very few people know this segment like Brandon does,” said Reynolds.
“Now there’s a licensed, legitimate alternative to what’s previously been out there,” Abbey told Domain Name Wire.
“The barrier to entry is extremely steep if you’re going to do it right and get the [escrow] licenses,” he said.
Abbey said that a number of things kept him up at night while running Escrow.com: regulation, compliance, know-your-customer.
“All that stuff is lock, stock and barrel the way these guys have set it up,” Abbey said.
Payoneer Escrow is launching with broker tools to allow domain name brokers to participate in the escrow and receive their commissions.
For now, only brokers and sellers can initiate transactions. The company is building buyer-initiated capability and plans to add credit card payments this fall. It is also working with domain name marketplaces to integrate its escrow services via API.
Expect Payoneer Escrow to compete on price. A price comparison provided by the company shows that it plans to undercut the competition, especially with sub-$10,000 transactions, which make up the majority of the market.
So far, entrants to the domain escrow business have been smaller players. Payoneer is a large company with 24×7 support and over 700 employees, so this will be interesting to watch.