Into domain name escrow business — Payoneer jumps

Global payments firm begins catering to the domain name industry.

Global payments firm Payoneer is getting into the domain name escrow business with the help of former Escrow.com president Brandon Abbey.

Payoneer is a sizable payments firm that handles payment distributions for firms like UpWork and Airbnb. It sends payments in 150 currencies to people in 200 countries.

The firm purchased escrow firm 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. Regarding half of its business originates through the API.

Reynolds told Reglike that Armor hasn’t previously focused on domain name escrow since “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 states 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 firm. Payoneer brought him on to lead its domain name escrow effort.

“Very few people know this segment like Brandon does,” stated Reynolds.

“Now there’s a licensed, legitimate alternative to what’s previously been out there,” Abbey told Reglike.

“The barrier to entry is extremely steep if you’re going to do it right and get the [escrow] licenses,” he stated.

Abbey stated that a number of things kept him up at night while running Escrow.com: regulation, compliance, know-your-client.

“All that stuff is lock, stock and barrel the way these guys have set it up,” Abbey stated.

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 firm 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 firm 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 sizable firm with 24×7 support and over 700 employees, so this will be interesting to watch.