ICYMI: How Tariffs Impact Global Payments
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Last month, shares of Payoneer Global fell more than 13% after the fintech firm withdrew its guidance for the year, citing uncertain macro conditions. The company also reported adjusted EBITDA for the first quarter, Tim, that beat analyst expectations. John Kaplan is the CEO and director at Payoneer. It's got a roughly $2.4 billion market cap. Shares down about 33% so far this year. He joins us now from our Chicago bureau. John, welcome to Bloomberg Businessweek Daily.

I'm curious how you see conditions out there. Are macro conditions more or less certain now than they were a month ago when you pulled your guidance? Yeah, it's great to be here. And I think that's a really important question. You know, as it relates to the global trade environment, we have not seen a pullback in U.S. consumers. I'd also say that as the trade situation

relationships between China and the U.S. and the U.S. and other countries gets resolved, that will lift uncertainty. But we still are existing in an uncertain environment, and we are seeing our customers, entrepreneurs around the globe who do business cross-border, increasing their focus on globalizing their business. At Payoneer,

40% of our revenue is businesses doing business with one another that never touches the United States.

15% of our revenue is customers in China exporting to countries around the globe, not including the U.S. And 20% of our revenue comes from China-based entrepreneurs who are selling high-quality, low-cost consumer goods to U.S. consumers. And as you know, the U.S. consumer is 43% of the world's

consumer consumption and 70% of the US economy is driven by the US consumer. So it's super important that US consumers are healthy, that they're spending money and getting the products that they want. So if you think about where you are now and given what you just told us, John, do you stand by the decision to pull the guidance about a month ago? Was that the right move? Sure.

It absolutely was. One of the things that we do at Payoneer is we are building the firm for long-term growth. And in doing that, it's establishing a trusted relationship with our shareholders and helping them understand exactly what we see. So at the time of our May 7th earnings announcement,

The tariffs were still 145%, effectively an embargo between China and the United States, as Secretary Besant had described it. And so it was important at that time to not play chicken with the US administration or with the market about how trade would resolve, which is call balls and strikes. And at the time, it was prudent and responsible to give our shareholders exactly the guidance we did, and we feel comfortable about it. Do you feel like you have better visibility today

You know, what we said at earnings was that our Q2 results we anticipated would look very similar to our Q1 results. And I can reaffirm that message here. I'm hopeful that the politicians around the world will meet with one another, resolve their structural issues, because I know the entrepreneurs around the world want to continue to do business with one another. Is it really because of the strain between U.S. and China specifically, or is it...

more than that. Yeah, for our business, you know, really our emphasis as we looked at guidance was primarily related to the U.S. and China. But it's important what you just mentioned, which is, you know, at the time there was a pause and a reduction in the tariffs as it relates to countries like Vietnam and elsewhere. Those are anticipated to

that pause was 90 days mid-July that ends and we're hopeful to see resolution. We've got to wait and see. One thing about our customers that we've seen is they are on the front foot growing their business, exporting goods and services around the world. We have customers in 190 countries and territories. We have

you know, really broad, broad business in terms of industries, geographies, size and sort of category. So when we look at our customers, we feel very confident about what the long term future looks like for Payoneer and in fact, see value at these levels. What can you tell us about how you're looking at stable coins and what you do right now with stable coins?

Yeah, you know, I'm glad you asked the question because the Payoneer customers hold $7 billion of funds in their Payoneer account. The Payoneer account is 100% of an entrepreneur's cross-border accounts receivable and accounts payable. And we view the momentum and energy around stablecoins as confirmation of the innovation that's going to come in cross-border trade. Today, we have not made any significant announcements

as of yet, of where we'll go with stablecoins. I think, rest assured, you read lots about Circle and Ripple and other folks. I think they envy the distribution we have, the brand we've built, our last mile relationships, our network of licenses. We feel well positioned to bring the hype into the reality cycle and drive adoption when we choose to sort of put our foot on the gas there. So are you working on a stablecoin?

I'm not going to share yet here today what our plans are, but we're very focused on providing solutions for customers in partnership with others to enable our customers to move funds around the world in a fast, effective, inexpensive way. How would it make it faster and less expensive if you were to have a stable coin?

Yeah, in some ways, the Payoneer account functions as the promise of the new currencies and new technology today. Customers use Payoneer to send an invoice to their business customers around the globe. They get paid. They get paid regularly.

practically instantly today. So I don't think it'll largely change the speed, although we may pick up seconds here or there. What likely it'll give us is more diversity. And that diversity is something we think pockets of the globe are excited about. Argentinean freelancers in Argentina, for example, excited about some of that innovation. We have the ability to drive its penetration. And that's what I was going to kind of ask you. What particular regions would this be the most useful? And if you could, is it Argentina? Is it elsewhere?

Yeah, so we do see adoption, quality adoption occurring in Latin America in some pockets. We see quality adoption and interest occurring in APAC in some regions. But it is, you know, the hype cycle is pretty intense right now. We're very focused on the practical applications of helping 2 million active customers, $80 billion of funds

transacted across the Payoneer platform in 2024. We are a big platform helping cross-border SMBs, and they are diverse and have different needs depending on just what country they're in, what use case they're deploying against. All right. Super appreciate it. John, thank you so much. John Kaplan, he is Chief Executive Officer, Director at Payoneer, joining us from our news bureau in Chicago.

Right.

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