The document discusses how online advertising and affiliate networks are expanding globally at a rapid pace. Between 2012 and 2015, an additional $76 billion will be spent on digital advertising worldwide, with the US only contributing 28% of that total, showing strong growth outside the US. Many US and European companies are expanding internationally to diversify and grow their businesses. However, going global presents challenges like different languages, payment methods, tax compliance, and fraud prevention. A payments as a service provider can help companies accelerate their global growth by automating payments, handling tax compliance and Know Your Customer obligations, and offering multiple payment options across currencies to affiliates and partners. This allows digital media firms to focus on their core business instead of dealing with the complexities

1. Affiliate Networks Go Global
Payments as a Service
Scott Galit
Payoneer Inc.

2. Online advertising is even bigger outside the US than
in the US
Online advertising is growing faster outside the US
Leading Digital Media companies and Affiliate
Networks are going global faster & bigger than ever
Going global is complicated – languages, currencies,
payments, tax compliance, OFAC obligations…
A “Payments as a Service” provider enables digital
media companies to accelerate growth, manage
compliance risk, lower costs and improve efficiency

6. “Between 2012 and 2015, an additional
$76 billion will be spent on advertising
globally, with the US contributing 28%
of that total”
Source: emarketer.com| comscoredatamine.com

7. Huge international expansion by industry leaders in last
5 years
US based advertisers and merchants are expanding
internationally to grow diversify their businesses
The same trends are developing in Europe and driving
growth initiatives in Latin America
Digital media companies and affiliate networks are
expanding internationally in response to demand from
their clients

8. The same trends are recognize in Europe that are launching
activities in Latin America
The international markets presenting a challenge that usually
US/European based companies didn’t faced in the past -
languages, currencies, payments, tax compliance, OFAC
obligations, etc…
Globalization of the online marketing world -
getting stronger – Cont.

9. Languages
Fraud
KYC/OFAC
Tax compliance
Payments
Administration
Error handling
Customer service

10. US Companies have tax reporting and withholding
obligations for international payees
Tax form collection is complicated
 W-8BEN
 W-8ECI
 W-8IMY
 W-8EXP
Even more scrutiny with FATCA coming in 2014
“Problems are minimized if appropriate documentation is
obtained from each payment recipient… if the proper
documentation is not received the consequences for the
business can be serious.”
Source:Worldwide ERC

11. What is OFAC?
 US government economic sanctions programs against
countries and individuals, including terrorists and
narcotics traffickers
Who must comply?
 All US citizens, residents, companies, foreign
subsidiaries of US companies…
Penalties include fines of $50k-$10mm and
imprisonment ranging from 10 years to 30 years
How does your company ensure you are complying with
your OFAC obligations?

12. What if you could accelerate the growth of your
business without having to worry about…
 Properly managing tax compliance
 OFAC and AML compliance issues
 Fraud management tools
 Service team to manage lost payments and CS
 Offering the broadest selection of low-cost payment
options to affiliates/payees
 Dozens of languages and currencies with single data
connection
 Automation and reporting
The Answer: Payments as a Service

13. Complete solution that handles all payments,
automates payee administration and solves key
compliance issues
What are the key criteria for selecting a provider?
 Tax compliance solution offering IRS guarantee
 OFAC & AML Screening
 Fraud tools
 Languages and currencies
 Multiple payment options for all countries
 Single data flow and single money flow
 Elegant APIs
 Regulated provider to ensure stability

14. Profile
 2.5bln daily recommendations; 250mm unique users monthly
Key Challenges
 Huge effort to manually collect and manage tax forms
 Payments to many countries in multiple currencies
 Expensive and difficult to manage bank; many lost payments
Payments as a Service
 Complete tax form management solution
 Multiple currencies and payment types automated through
clean API at fraction of cost of bank, saving time and money

15. “ClickBank Partners… to Simplify Expansion into
Latin America” December 2012 PR
ClickBank has more than 100k active affiliate
marketers
ClickBank now expects to be able to serve up to 5,000
more affiliates in Latin America
Payments as a Service enables ClickBank to…
 Reach into emerging markets; and
 Make payments in dozens of currencies with
international EFTs, international wires, prepaid cards,
local checks and ewallets without integration

16. “The Solution is brilliant for any
company sending funds to a large
number of people in numerous
countries, and we are thrilled to offer
our members a better way for them to
receive and access their money…”
ELANCE

18. Processor
LoadPartner
Payee
Register
Invite
Apply
Fulfill
Activate
Account Managers
Request
Documents
Non sponsored
Payee
New Accounts
Request
Documents
Payee
Know Your Customer (KYC) Know Your Customer’s Transactions (KYCT)
Partner
(Sponsor)
Profile
Card Holder
Profile
Program
Limitations
Customer Service
Partner
Payee
Payments
Request
Documents
Debit Credit
Account
Reconciliation
Payoneer
Request
Card
Transaction
API
ATM
POS
Purchase
Cash withdraw
Refund
Refund/Return/
Reversal
Load
Partner
$
Bank
Payee
Limited risk exposure
Risk based treatment
Partner
Payee Transaction
Decline
Decline Decline
Exposure
Monitor
Cancel
Funding limits
Withdrawal limits
Program limitations
Service limitations
Coordinated risk management
across multiple touch points
Private
Load

21. Digital Media is already bigger and is growing faster
outside the US
Going global is complicated – languages, currencies,
payments, tax compliance, OFAC obligations, fraud…
Payments as a Service can accelerate global growth
for digital media companies with a complete solution
that…
 Ensures compliance
 Provides unmatched low-cost payment options
 Reduces headaches by automating processes and
offloading issue resolution

22. QUESTIONS?

23. Thank ouscott@payoneer.com