From the CEO

We enable payments - globally

From the CEO

Our strategic focus on enabling payments globally, through innovations and a solid business foundation based on long-term customer and partner alliances, remains unchanged. Persistently we broaden of our business scope and advance our technology portfolio. Together with progress in important certification and interconnection projects, all these achievements create great competitive assets supporting our continued growth. Westpay is a purpose driven company which is synthesized in “Growing Together”. We live this purpose every day and to us it means growing together as individuals and colleagues, growing together with our customers and partners, and of course growing together with our shareholders!

Currently, we are in the middle of an exciting product generation shift in both payment terminals and self-service solutions. It will have a healthy impact on our revenues for 2019 and beyond.

A few days ago, CARBON, our brand new payment terminal solution was launched. With CARBON, Westpay brings a completely new payment experience to the market. It is a payment solution unlike any other payment solution. CARBON is the first complete product range of payment terminals built on Android, the world’s most versatile and far-reaching operating system. Through Android, CARBON enables Cloud based payment solutions, tight integration to external point-of-sales applications and remote updating for flexible customization. In this first step CARBON is launched on all European markets.

As part of the ongoing cooperation, MAX Burgers and Westpay has reached an agreement to develop the next generation self-service solution for restaurants. It will include unique solutions for both indoor, outdoor and mobile (“que busting”) use. The latter application is something only Westpay can provide, due to our Oracle payment partnership. For a long time, self-service has been an integral part of MAX digital strategy for creating a superior experience for the restaurant guest. Together we have vast experience in what increases revenue and improves customer experience. I am very proud that Westpay continues to be a strategic partner of such an advanced customer as MAX.

During the quarter, we have signed a four-year agreement with Cirralto Limited, who is becoming a new distributor of Westpay’s merchant payment solutions in Australia. It is a substantial agreement with a minimum contracted value amounting to 30 MSEK during the term. I am excited to be engaging with Cirralto in the emerging Australian market. After success in other international markets, I see Australia as the next logical step. Cirralto is a listed company that owns and operates technology assets and services that enable modernization of business IT systems via the conversion, migration and management of server based legacy data and systems to the Cloud. The cooperation with Westpay will allow Cirralto to integrate merchant payment services in its product portfolio, which will strengthen its business with existing and new customers.

It is encouraging to see new research revealing that the number of payment cards in circulation worldwide reached 15 billion at the end of 2017, up by 6% since the end of 2016. As governments and central banks in developing markets continue to encourage financial inclusion, the number of cards has kept growing, providing further opportunities for card payment solution providers. The Chinese card brand Union Pay holds the largest market share with 44 %, trailed by Visa (21 %) and Mastercard (16 %). All of which Westpay support fully, both for contact and contactless payments.

Although we have created a solid business foundation for continued growth, everything is not moving according to a straight line. We are operating on a market where extensive work is needed before any business can take off. All technology must be put in place and plugged in, and all necessary certifications must be approved and completed. The regulatory demands for compliance on companies within the financial industry are increasing drastically which complicates this process, both for us and our customers. It is a solid effort being made in silence, which is definitely moving forward. As a sign of progress, payment terminals are now finally being deployed into production in South Africa, following the completion of the certification of our payment terminals and gateway with the local processor, Absa Bank, Mastercard and Visa. My view on the potential and opportunities of our markets have not changed the least. It simply takes time to get from signing a contract to putting the first payment terminal into production – sometimes several years.

The ongoing product generation shift and the delays in certification on the markets in South Africa and Sri Lanka are putting pressure on our revenues for the third quarter, pushing them forward into 2019. Having completed some key recruitments during the first half of 2018, we are staffed for growth. To support our financial situation and have flexibility to bridge the gap that may occur during this transition period, we have secured 11 MSEK in additional loan facilities from our bank, Danske Bank, and additional financiers.

I am confident that we are well positioned with the right business focus, team size and technology offerings to extend our five-year historic growth journey well into the future. My ambition during 2018 and into 2019 is to continue the intensive work with technology investments and keep our business activity at the highest level.