After an eight-month program of works, Spenda Ltd (ASX:SPX) has finished the development, certification and launched its Payment Facilitator (PayFac) merchant payment services.
The completion of work gives SPX the ability to start implementing customer merchant services totalling $100 million in annual payment volume.
The initial implementations are estimated to deliver more than $1 million in new Annual Recurring Revenue, with the PayFac merchant payment services to be used to service existing client networks, including major client Carpet Court.
PayFac complements and enhances Spenda’s existing Business-to-Business (B2B) and Business-to-Consumer (B2C) payment rails as well as its current and planned future lending services.
“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 increased share of the wallet,” Spenda’s CEO and MD Adrian Floate 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.”
PayFac brings improved efficiency
The PayFac launch unlocks improved efficiency for the company that includes:
- Removing the duplicate sharing of compliance data when the company bundles 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.
Spenda will begin onboarding customers to its PayFac services, with the aim of capturing an estimated $100 million in new payment flow based on existing customer agreements within the first quarter.
These initial onboardings are projected to generate more than $1 million in new ARR. The services will be integrated into Spenda’s current customer network as an upgrade, while also being available to new customer programs to enhance operational efficiency, customer loyalty, and overall value.
Spenda plans to expand the initial $1 million ARR as it continues to implement new programs. The time frame for revenue generation through these services is relatively short, allowing for prompt market updates as there are substantial increases in the run rate or new customer and partner sign-ups that raise the ARR estimates.
Previously, customer networks such as Carpet Court have been extended offers for PayFac payment services. This development amplifies Spenda’s merchant acquisition and revenue opportunities, further solidifying its competitive standing in the payments sector.
Spenda aims to aggregate entire vertical markets, from consumer to retailer and ultimately to the primary producer, thereby monetising payment flows comprehensively.
About Spenda
Specialising in a wide array of B2B payment services, digital trading software, and integrated solutions, Spenda aims to facilitate the transition from EFT payments to card transactions via its BPSP engagement model and collaboration framework.
The company's unique selling points include end-to-end e-invoicing integration, quick ordering processes, digital trust features and automated reconciliation capabilities.
Spenda offers its clientele a suite of integrated software tools to establish a vertical market standard operating environment (SOE). The software allows for smooth and effective data transfers among various disparate systems, all under one standardised technology solution such as SpendaRetail.
Further reinforcing its competitive edge, Spenda has entered into licensing agreements with third-party vendors, enabling the firm to provide a fully integrated SOE solution to its customer base.