On Feb. 23, a sturdy and completely bald Israeli named Yuval Tal was in Las Vegas at the Rio, where the nightly entertainment includes the Chippendales and Penn & Teller.
Tal, behind a microphone in a blazer and open-collar shirt, was one of five international visionaries, as the brochure for the 2010 Prepaid Expo called them, who had been gathered together for an afternoon panel talk on the state of prepaid cards around the world. The conference, with a keynote address a day earlier from Bill Clinton, who got a standing ovation for a speech titled “Embracing Our Common Humanity,” cost $1,795 per person.
Two days later, Tal would be at the center of one of the globe’s juiciest international intrigues.
Papers from Des Moines, Iowa, to London were reporting that his New York-based firm, Payoneer—which offers prepaid cards, mostly as a way for employers to compensate foreign workers without checks and wire transfers—had been linked to this year’s cinematically brash Hamas assassination in Dubai. In the open view of security cameras, wearing vaudeville-level wigs and mustaches, a group of at least 27 agents plotted the death of the Palestinian militant Mahmoud al-Mabhouh, who was drugged and smothered with a pillow in his hotel room on Jan. 19.
Dubai police said the suspects used more than a dozen Payoneer debit cards for planes and hotels. Its chief declared he was “99 percent” certain that the assassins were from Mossad, Israel’s spy agency. Payoneer says it is cooperating with authorities.
The chronicle of the assassins has unfolded thrillingly, like something out of le Carré: One reportedly slipped into the United States the day after al-Mabhouh was found, another is said to have entered on Valentine’s Day. But the story of Payoneer and its founder, a warm man despite a Special Forces background, is even pulpier.
Payoneer was a good idea. It makes customized, prepaid, private-label Debit MasterCards for companies, which can use them to pay their employees and freelancers. According to its site, Payoneer keeps a 3.5 percent commission, plus fees like a $5 first-time charge. It also has a travel affiliate that works with groups like Birthright Israel, whose Web site says that its participants are required to use Payoneer.
“The money is uploaded to the card. There’s no need for paper, for checks, for stamps, for envelopes,” Tal said in an October 2008 interview with a Web video production site called 1938 Media, which Payoneer has sponsored. “Why stand in line in the Russian winter to cash a check? When you can actually, from your basement, actually continue to do business?”
Russia is indeed one of the biggest sources of traffic to the card’s website. So are shakier Central Asia nations such as Krgyzstan, Uzbekistan and Kazakhstan, according to statistics from Alexa. “If you are going to go after a niche in the payments industry, international payments is about as big a niche as you can get,” the blog TechCrunch wrote after Tal’s company finished a multimillion-dollar round of venture capital fund-raising two years ago. “But it can also be a dangerous game in the post-9/11 world.”
For its cards, Payoneer uses Belize’s quiet Choice Bank Limited and the Midwest’s MetaBank, which as of last year was facing several lawsuits. It used the First Bank of Delaware until early last year, soon after the Federal Deposit Insurance Corporation charged it with deceptive marketing practices. “We decided to cut back in a number of programs. His was just one of them,” First Bank CEO Alonzo Primus said.
Meta, titled like Pynchon, was the bank for most of the Dubai cards. “We have launched our own review of the matter to further assure ourselves that Meta followed proper procedures in accordance with all bank and regulatory requirements,” it said in a statement.
Payoneer would not comment . “I don’t think that we can meet,” Tal wrote, “but I’ll truly try to see that we chat.” He didn’t respond to further e-mails. A visit this week to the 15th floor of 410 Park Avenue, the company’s address, revealed that it was a virtual office that handles mail and call screening for hundreds of firms. Payoneer’s real Manhattan headquarters is a fifth-floor suite on Broadway near Columbus Circle, decorated by large blowups of prepaid cards. Its site says the firm also has a research-and-development center in Tel Aviv.
It’s not clear who handles compliance for the company. Last year’s Prepaid Expo listed Cherie Hamblin, a certified anti–money-laundering specialist, as its chief compliance officer. At this year’s event, she was on the panel of five judges that gave Payoneer a 2010 Paybefore Award for best business-to-employee program.
Las Vegas was nice. Tal went out for coffee with the British attorney Robert Courtneidge, a fellow panel member he’d met at the previous year’s Florida conference. “He comes across as a very nice individual. Very trustworthy,” Courtneidge said. “You meet with him and feel comfortable right away—family man.” They both had pregnant colleagues along with them, who chatted.
The businessmen talked about maybe doing business together in Europe. “There’s a lot of money in the prepaid industry, a lot of people looking with interest at how to capitalize on the growth of the prepaid phenomenon,” said Tony Craddock, the head of an industry organization called the Global Prepaid Exchange, also a panelist. “A lot of people making money and a lot of people who want to make more.”
In 2007, the research firm Mercator Advisory Group said that around $11.3 billion in American wages had been distributed on prepaid cards the previous year. Mercator estimates that last year’s sum was $20.6 billion, and that in 2012 the number will be $33.1 billion.
“He’s a well-respected business professional, he’s got a very clever business model, he’s doing something, as far as anything can be in the world, unique,” Craddock said. “He’s very well backed, and he’s very well referenced. I don’t know what else to tell you.”