Spenda Launches PayFac Service

18 September 2023 13:14

Spenda Limited (ASX:SPX) has officially launched its Payment Facilitator (PayFac) merchant payment services after an eight month Program of Works (PoW), with the immediate implementation of customer merchant services totalling $100 million in annual payment volume and an estimated $1 million in new Annual Recurring Revenue.

What is PayFac?

PayFac complements and enhances Spenda’s existing Business-to-Business (B2B) and Business-to-Consumer (B2C) payment rails, and additionally bolsters the Company’s current and planned future lending services.

The PayFac launch unlocks improved efficiency including:

  • Removing the duplicate sharing of compliance data when bundling multiple service lines;
  • The enablement of credit approval for both payments and lending in the same process (assuming customer eligibility);
  • A reduction of Spenda’s compliance costs;
  • A reduction of Spenda’s data breach risk; and
  • A reduction in the cost of issuing and the enablement of the standardisation of Customer statements.

Delivering Substantial Revenue

The Company announced in August that they had reached a significant milestone in facilitating deeper engagement with supplier networks through the Digital Services Delivery initiative with Capricorn Society. Spenda is now directing its attention to enhancing its consumer networks, improving financial services, and increasing operational efficiency.

Spenda plans to initiate the boarding process for customers immediately, expecting to generate $100 million in new payment flow from existing customer agreements in the first quarter. These initial customer implementations are estimated to deliver more than $1 million in new annual recurring revenue.

The PayFac services will be rolled out to Spenda’s existing customer network as an upgrade to their current financial services, and offered simultaneously to new customer programs as a solution to reduce operating costs, increase loyalty and drive Spenda’s total customer value.

One of Spenda’s key customers is retail giant Carpet Court, who in June signed a five-year exclusive agreement to offer lending services to stores across the newly completed network, rolling out the Company’s payment platform to 205 member stores.

The Company anticipates the lead time to revenue generation from the PayFac service will be relatively short, and thus will provide updates to market once it observes material increases in run rate, new customer sign ups, or new partner networks, all of which will influence the annual recurring revenue estimates to higher maintainable levels.

The launch of the PayFac capabilities provides Spenda and its partners with a substantial merchant acquisition and revenue opportunity that it believes will demonstrate Spenda’s unparalleled competitive position as a payments company, with an ability to aggregate entire vertical markets and monetise flows from consumer to retailer all the way through to primary producer.

Spenda’s CEO on PayFac

Spenda’s Chief Executive Officer and Managing Director, Adrian Floate, said the Company was excited in regards to the announcement.

“This is a big day for the Company, as we release yet another piece of the vision that enables us to continue to deliver solutions to our customers that provide real value whilst also delivering Spenda an increase share of the wallet,” he said.

“Becoming a PayFac has been part of the plan for many years and it is exciting to see it come to life. I am very proud of the team, and I want to congratulate them on the speed with which they have delivered the PayFac capability.”

SPX’s Australian Stock Exchange-listed share price is currently trading at $0.009 (1:15pm UTC+ 8 hours).

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