B2B payments firm Payoneer is reportedly set to end its escrow service, the company said according to DN Journal.
The publication said Thursday (July 12) that Matt Watts, Payoneer head of enterprise strategy and business development, sent an email notifying that the company plans to end the escrow service two years after it launched.
“It’s with sincere apologies that I’m sharing news that Payoneer is discontinuing our escrow business,” Watts wrote. “While we have been excited and honored to service prospects and partners like yourself, after careful review of our product portfolio, we have decided to commit our focus to other areas of the Payoneer business.”
Payoneer launched its escrow service in 2016 after acquiring Escrow-as-a-Service player Armor Payments. At the time, the takeover aimed to provide customers with reduced uncertainty and risk when businesses make high-value purchases online. After the acquisition was announced, Scott Reynolds — former Payoneer executive, as well as CEO and co-founder of Armor Payments — told PYMNTS that Payoneer was looking to address the friction of completing transactions on B2B commerce sites that don’t offer an integrated service.
The escrow solution holds funds in escrow accounts until both buyer and supplier are satisfied that the trade is completed. B2B eMarketplaces were able to integrate the solution via API to facilitate B2B payments on their platforms.
“The escrow solution of Armor Payments fills in a critical missing link for B2B transactions, and moves beyond payments to address the trust gap that often exists between trading partners,” Payoneer CEO Scott Galit said at the time.
Last year the company issued a blog post highlighting the benefits of escrow services in B2B transactions.
“The benefits to escrow are twofold,” the post read. “One, it completes the task … without having to trust intermediaries, and two, no single institution is in charge of holding the funds.”
Payoneer’s email did not disclose why the company decided to end its escrow service.