FairFX targets SMEs through CardOne acquisition

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International online payment solution and prepaid card provider, FairFX Group, has acquired CardOne to expand into digital banking segment. The deal was sealed at 15 million euros (US$ 17.60 million). FairFX deals in P2P payments platform that enables money transfer for retail and business segments. With this acquisition it aims at reaching out to small and medium businesses. The acquisition was funded by conditional placing to raise a net 25 million euros (US$ 29.33 million) at 58p per share and another 1 million euro (US$ 1.17 million) came in from an open offer. The company stated that placing was comprehensively oversubscribed by new and existing institutional shareholders with around 4.7 million euros (US$ 5.51 million) of funds channelled from VCT/EIS investors.

With this acquisition FairFX will gain access to digital banking segment opening up prospects for larger market opportunity beyond consumer cards. It has stated that it will utilize CardOne’s infrastructure and technical competence to introduce banking products targeting small businesses. Due to its business expense management platform, it can be expected that it will have an advantage in SME segment. In order to promote currency products that include currency cards, corporate cards and international payments as well as for augmenting brand awareness, the brand is running advertisement campaign on Sky Sports F1 racing channel.

Additionally, a revenue boost is anticipated also. CardOne registered a profit of 800,000 euros on sales of 5.5 million euros (US$ 6.45 million) in 2016 and profit of 600,000 euros in H1 2017. It is predicted that this acquisition will enhance earnings in first year following completion. Cost savings and synergies are also likely to add to the value proposition.

2017 has already been profitable for FairFX as it registered 25.8% YoY (year-on-year) growth in turnover reaching 433.5 million euros (US$ 508.58 million) in H1 2017. Total turnover from prepaid cards and international payments segment increased by 23% and 35%, respectively. Usage of corporate card platform also increased by 93% YoY.

Globally P2P transfer market transaction value was US$ 839 billion in 2016 and expected to reach US$ 4.1 trillion in 2021. From 2015 to 2016, the growth rate achieved was 43% while expected CAGR from 2017 to 2021 is projected to be 36.5%.

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