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  1. Analysis
February 11, 2019

Paysafe seeks expansion as an omnichannel US processor

By Robin Arnfield

Paysafe Group sees opportunities to expand in the US, particularly in the SME sector, following two recent acquisitions. It offers a ‘one-stop shop’ to meet merchants’ diverse needs, COO Danny Chazonoff tells Robin Arnfield

Paysafe saw a 66% growth in annualised transaction volumes between 2016 and 2017.

“We reported an annualised transaction volume of over $80bn in 2017, up from $48bn in 2016,” says COO Danny Chazonoff.

“This increase reflects the acquisitions we’ve made as well as organic growth.”

Paysafe offers end-to-end payment services for businesses and consumers across 200 payment types in over 40 currencies worldwide. In 2017, Paysafe, which has around 3,000 employees in over 12 locations, was bought by two private equity firms, Blackstone Group and CVC Capital Partners, for £2.96bn ($3.78bn).

“In terms of where we’re expanding, our focus is supporting our clients to grow into new markets to achieve their business goals,” says Chazonoff. “This, in turn, contributes to the growth of our business.”

The US continues to be a key market. “We’re working to expand our business further there,” says Chazonoff. “Recent US acquisitions, such as that of iPayment Holdings in June 2018 and Merchant Choice Payment Solutions (MCPS) in 2017, are supporting this growth.”

MCPS was a full-service processor for merchants and high-volume Independent Sales Organisations (ISOs) in North America, providing card processing to 60,000 merchants and processing $14bn in sales volume annually. iPayment, a provider of payment processing solutions for SMEs, generated processing volumes of over $25bn in 2017 from 137,000 US merchant clients.

Combined with Paysafe’s acquisition of MCPS, buying iPayment established Paysafe as a top five US non-bank processor, generating annualised processing volumes of over $80bn in full-year 2017. Following these acquisitions, Paysafe sees significant crossselling opportunities across its product range.

“Paysafe’s diverse platform of proprietary payment capabilities covers every aspect of the payments ecosystem,” says Chazonoff.

“Our payment solutions for businesses fall under the Paysafe brand. We also have several consumer payment solutions, which come under the paysafecard, Paysafecash, Skrill, Neteller, Paysafe Pay Later invoicing or instalment payments, and GOLO mobile order-ahead brands. When a merchant comes to us, we can act as a one-stop-shop and offer a mix of alternative payment methods to suit their and their customers’ needs.”

SMB opportunity

Chazonoff believes there is a considerable opportunity in the small and medium-sized business sector for Paysafe for Business services. “This sector is large, fast-growing and profitable,” he says.

“iPayment is focused on the North American SMB sector. Following its acquisition by Paysafe in 2018, we’ve recently been able to cross-sell more iPayment and Paysafe products such as POS solutions, digital wallets, pay later and prepaid cash solutions to a significantly expanded SMB customer base. We continue to launch new products and services for this sector, including Paysafe Accelerated Funding, our new sameor next-day settlement option for SMBs based in the US.”

Paysafe has signed a strategic partnership with Verifone, through which Paysafe became the first firm in the ISO space to deploy Verifone Connect with Carbon and Engage devices. These omnichannel cloud-based POS systems enable merchants to accept payments from digital wallets, MPoS devices, NFCenabled smartphones, and loyalty programme points. Paysafe is rolling out the Verifone devices to its US network of quick-service restaurants and SMBs in the US.

“We also have partnerships with nonpayment companies,” says Chazonoff. “In North America we’re working with Upper Hand, a provider of cloud-based sports and fitness management software and business services. We’ve partnered with them to power a new, fully-automated payment solution called UP Payments, that will provide quick, secure and simple payment processing.”

Paysafe Accelerated Funding is based on a partnership between Paysafe and Company. com, a small business products and services platform, and instant money technology provider Ingo Money. The three partnered in June 2018 to help digitise merchant settlement for instant money transactions.

Paysafe’s prepaid solution, paysafecard, is a 16-digit PIN that acts as a virtual card for online purchases as an alternative to credit or debit cards. It can be bought at Paysafe’s retail partners, and is now available in 47 countries and over 600,000 sales outlets worldwide.

In June 2018, Paysafe launched Paysafecash, an online option for the numerous online shoppers who prefer to pay by cash. Available from Paysafe’s retail distribution network, Paysafecash can be used to upload funds into digital wallets, including Paysafe’s own digital wallets, Skrill and Neteller. “In launching Paysafecash, we’ve been able to create a cash ecosystem that serves a different consumer audience altogether,” says Chazonoff.

Paysafe recently launched the ability to instantly buy and sell cryptocurrencies in Skrill and Neteller. “We continue to strengthen our presence in this space, as we believe we can play a significant role here,” says Chazonoff. “Connecting cryptocurrencies and traditional or fiat currencies in an efficient, user-friendly way is needed for cryptocurrencies to gain real traction.”

In 2018, Paysafe launched the Skrill international money-transfer service. “This service represents huge potential,” says Chazonoff. “Skrill customers can transfer money from anywhere in the world to bank accounts and mobile wallets in 45 countries.

“We currently offer transfers with no fees for sending money or foreign exchange. The World Bank estimates that as of December 2015, around 3.4% of the world’s population, 247 million, lived abroad and needed to send money home to their families.”

 

 

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