wings
Planet Payment has kept a low profile during what have been several
years spent honing a business model based on its unique
multi-currency credit card payment platform. The company is now
moving ahead rapidly, especially in the Asia-Pacific region, where
it has already scored impressive successes.
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Founded in 1999, Planet Payment (Planet) has built a business model
around a payments platform that enables travellers to pay by credit
card in their own currency while abroad. It is a single platform
that can be deployed in any country and instantaneously perform
conversions of up to 147 currencies; Planet CEO Philip Beck told
EPI “we believe it is unique”.
For travellers, the platform brings the benefit of exchange rate
certainty, said Beck. Currency exchange risk is borne by merchants.
For banks, the platform represents a “tremendous”
revenue-generating opportunity as they can earn about one-third of
the 300 basis points margin on each foreign exchange transaction,
he added. Banks and payments technology vendors can outsource
processing to Planet or integrate its platform into their
processing functions.
Headquartered in New York, Planet is listed on London’s Alternative
Investment Market and has offices in Bermuda, the UK, Singapore,
Hong Kong and China. In the six months to 30 June 2007 it reported
total transaction volume of $174.3 million, a 647 percent increase
compared with the first half of 2006; total revenue increased 462
percent, from $1.21 million to $6.8 million. The growth momentum
continued into the second half of the year. In August, for example,
annualised multi-currency transaction volume reached $410 million,
a 17.6 percent increase compared with the annualised level in the
first half of 2007.
Beck believes that “an exciting story” for Planet is just beginning
to unfold. From a revenue perspective, Planet is eyeing a far
higher share of global revenue from currency conversions that it
estimates total $4.3 billion annually.
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By GlobalDataMuch of Planet’s success so far has been in the US, where it
continues to gain momentum. For example, in August this year the US
unit of Travelex, the world’s largest foreign exchange service
provider, made Planet’s Pay in Your Currency (PYC) service
available to travellers at all its 125 US locations.
Although still viewing the US as a key growth market, Planet has
also set itself the goal of growing aggressively in the
Asia-Pacific region. To this end, in what Beck termed “a
significant achievement”, a wholly owned unit was established in
China in the first half of 2007 and offices opened in Shanghai and
Beijing. The offices complement the Hong Kong office opened in
2005.
A number of key players in the greater China region have already
incorporated Planet’s PYC service into their offerings. The first
was Hang Seng Bank, a unit of UK bank HSBC, which in April 2006
entered into an agreement with Planet to offer the service to
merchants in Hong Kong. Shortly after, in May 2006, a similar deal
was struck with UK bank Standard Chartered to offer Planet’s
service in mainland China.
The impact of successes in Hong Kong and China is also reflected in
a significant increase in the revenue contribution from the region.
In the first half of 2007, 87 percent of multi-currency processing
services transaction volume originated in greater China, up from 50
percent in the first half of 2006. The increased importance of the
region meant the volume generated in the US fell from 36 percent in
2006 to 12 percent and that in Europe fell from 14 percent in 2006
to 1 percent.
Another notable breakthrough came in September 2007 with the
signing of an agreement with the Agricultural Bank of China (ABC),
one of China’s four largest banks. “The tie-up [with ABC]
represents a major deal for us,” said Beck.
China certainly offers significant growth potential for Planet’s
PYC service. Indicatively, Visa reported that international
purchases made by Visa card in China totalled $1.76 billion in the
first half of 2007, an increase of almost 20 percent compared with
the same period in 2006. Growth in tourism to China is expected to
grow at a brisk pace and, forecasts the Pacific Asia Travel
Association, foreign arrivals will approach 150 million by the end
of the decade. To serve the region’s booming tourism industry,
Planet in August 2007 launched a regional switch solution for
integrated payment systems, for the lodging, restaurant and retail
sectors in Asia-Pacific.
Successful alliance
Potential uptake of the new system has been much enhanced by an
alliance formed with Agilysys, a US supplier of management systems
to the hospitality and gaming sectors, whose offering incorporates
Planet’s PYC feature. The alliance notched up its first big success
when its management system was chosen by US hotel and casino
operator the Las Vegas Sands Group for installation in The Venetian
Macao Resort-Hotel (The Venetian), its recently opened $8 billion
entertainment complex in Macao, one of China’s special
administrative regions. One of the largest developments of its kind
in Asia, The Venetian boasts 3,000 rooms, 1.2 million square feet
of meeting, convention and exhibition space, a 15,000-seat arena
and about 1 million square feet of retail space. A key requirement
of The Venetian project was integrated payment support to process
credit card transactions received from a diverse range of POS
devices and environments, including the hotel front desk, food and
beverage and retail outlets, advance reservations website and call
centre, and event ticket sales.
“We believe that Agilysys and Planet Payment have developed a truly
unique solution for the rapidly growing hospitality and gaming
sector in Macao,” said Tina Stehle, general manager of Agilysys
Hospitality Solutions. She added that Planet’s PYC functionality is
a “powerful product enhancement”.
