Tag: Ecommpay

Ecommpay optimistic on future despite fall in profits

Geoffrey BarracloughLeave a comment

2023 was another year of investment for Ecommpay. The UK-regulated acquirer/gateway, reported lower sales and profits for the year to June 2023 as the business continues its pivot away from high risk merchants.

The company is part of a group of payment businesses controlled by Latvian Aleksejs Sjarki, from his base in Cyprus. Ecommpay has sharpened its focus to a group of “low to medium-risk” targeted verticals including digital services, travel/hospitality and the gig economy where it feels it can carve out a niche for itself. It’s a service-led proposition that promises a dedicated account manager and “no frustrating chat-bots.”

Turnover fell 20% to €37.6m with sales from acquiring services (by far the majority) down 18% to €34.8m while revenue from payouts was 35% lower at €2.9m. Sales to UK merchants were down 22% at €11.8m and to the rest of Europe by 17% to €25.9m.

Management blamed lower sales on macro conditions including rising inflation, reduced consumer spending, general lack of business confidence and the impact of Brexit on UK merchants trading cross-border. 

Gross profit was down just 11% at €12.2m as the business continued to terminate “loss-making legacy contracts with merchants.”

Good cost control meant that administrative expenses rose just 2% at €12.8m, resulting in operating profit down just 8% at €1.87m. Operating margins grew from 4.3% to 5.0%.

Total staff numbers grew from 198 to 217 but employee costs held steady at €39k each.

Ecommpay has moved to a new, larger London office and doubled its UK headcount including hiring Chief Operating, Revenue and Compliance Officers. The beefed up marketing team might want to look at whether the company’s name is Ecommpay, ECOMMPAY or ecommpay. All are used on its website.

Ecommpay sensibly wants to offer a one-stop shop and has expanded its portfolio beyond card acquiring. New capabilities include APMs (for which it sees strong demand), open banking solutions leveraging connections to aggregators including Nuapay, Token and Neopay as well as UK/SEPA direct debits with Go Cardless. To support omni-channel customers, a POS solution is being tested.

Management says it successfully taken a more aggressive approach to new business development eg attending industry events/exhibitions and that hiring vertical expertise has delivered improved brand awareness and profitability. Ecommpay has launched an innovative approach to offering local acquiring in the US with chargeback insurance.

ECOMMPAY shrugs off Brexit and Covid with 19% revenue increase

Geoffrey BarracloughLeave a comment

UK-regulated acquirer/gateway, Ecommpay – part of a Cyprus-based payment group controlled by Latvian Aleksejs Sjarki – has reported a solid performance for the year ending June 2022, with revenue rising 19% to €46.9m.

Despite the challenges posed by Covid and Brexit, the company’s high-risk digital customer base provided some protection against macro-shocks, and management expressed satisfaction with the resilient performance. Ecommpay’s acquiring services accounted for over 90% of its sales, while its revenue from pay-outs declined by 7% to €4.4m.

London headquartered Ecommpay generated twice as much revenue in the rest of Europe as it did in the UK. Its EEA sales grew by 21% to €31m, while UK revenue increased by 14% to €15m. Cost of sales rose by just 10%, leading to a 50% surge in gross profit to €13.6m. The company says it boosted margins by terminating a number of loss-making merchants.

Administrative expenses increased by 53% to €12.5m, while employee costs grew by 13% to €7.7m. Staff numbers remained relatively constant at 198 meaning the cost per employee rose by 14% to €39K. The company’s bottom line was boosted by foreign exchange gains of €4.69m but negatively impacted by a bad debt of €1.15m. Operating profit rose by a creditable 22% to €2.0m, with operating margins ticking up by 10 basis points to 4.3%.

Ecommpay has recently hired a new management team and in-sourced its business development function, previously an agent model. The company’s new approach has improved profitability and brand awareness, with sales teams reporting encouraging results from the resumption of face-to-face contact at trade shows. The company has also sharpened up its marketing, highlighting several good case studies on its website, including one from Accor Hotels in Latvia.

The new management team has developed a more focused go-to-market strategy by targeting a smaller number of verticals, including gig economy and digital services, business aviation and yachts, educational platforms, ticketing, ride-hailing, travel, and video gaming. Ecommpay’s clients include Mirai, a private jet operator, FXCM, a leading FX broker, and holiday companies such as Newmarket and Leger.

Like many high-risk acquirers, Ecommpay aims to de-risk its business by bringing retail merchants into its portfolio, although management says that margins in this segment are lower. To attract more retailers, Ecommpay has added integrations to leading shopping carts and is testing a POS solution, which should enable it to widen its target market to include omni-channel merchants.