Money to burn

With increased internet access, improvements to VoIP and technology like Skype, employers are finding it easier to outsource work, or support remote employees, than in previous years. But payment, particularly for firms whose workers inhabit many countries, remains a complex task.

Businesses typically conduct bank wire transfers or use services like Western Union, MoneyGram or PayPal, all of which can result in large fees or complications. Mailing printed checks require postage and a significant snail-mail delay time; foreign banks might also dally 30 days before cashing checks.

These services were intended for use on a person-to-person or person-to-business basis, and are inefficient when used for business-to-person payments, explained the New York Times. And while PayPal, an increasingly accepted option, operates in 190 countries, services vary. Some countries cannot access funds as direct cash; others can only use PayPal balances to shop online.

Payoneer, a start-up of Israeli origin (now headquartered in New York), is one more option to consider when planning compensation for large numbers of overseas workers.

How it works: Company X issues employees a prepaid MasterCard and deposits payments directly onto the account. The card then operates like a debit card. Payees may withdraw cash from an ATM, or use it at stores and online. To date, 200 firms have used the service, dispensing money to 120,000 cardholders — 85 percent of which are outside the United States.

In contrast to PayPal, Payoneer recipients do not need bank accounts, a key advantage for people in countries where accounts are uncommon or distrusted. But it cannot send money to the so-called "Axis of Evil," countries on the Treasury Department's Office of Foreign Assets Control list — Iran, Syria and North Korea.

It is also fee-based. Card activation costs $9.95, cash withdrawals cost $1.35 in the US and $2.15 elsewhere, and money transfers can cost $5 for the first transfer from a checking/savings account ($2 for future transfers), or 3.5 percent of the amount transferred from a Visa or Mastercard.

There is also a three percent currency-conversion fee, which Payoneer argues is a competitively low rate, secured only after it haggled with its issuing bank on customers' behalf.

Payoneer has so far received $14 million in venture funding from Greylock Partners, Crossbar Capital and Carmel Ventures. TechCrunch says the company will use the funding to invest in technologies to improve its fraud detection services.