11 Aug PAX Global Announces 2022 Interim Results
Android payment solutions become the strong driving force for PAX growth
The Group’s net profit surges over 36%
PAX Global Technology Limited (“PAX” or the “Company” or the “Group”, HKSE stock code: 00327.HK), is one of the world’s leading providers of electronic payment terminal (“E-payment terminal”) solutions and related services, is pleased to announce its unaudited interim results for the six months ended 30th June 2022 (the “Period”).
In the first half of 2022, pandemic restrictions were eased in most countries around the world. As growing numbers of consumers return to brick-and-mortar stores, they now expect electronic payments to be a standard feature of their shopping experience. Driven by the advancements in financial technology and government initiatives, the global transition to cashless societies has become irreversible and demand for electronic payment terminal solutions continues to be strong. Thanks to our strong international sales network, extensive product portfolio, and outstanding supply chain management, PAX demonstrated strong corporate resilience and continued to lead the international payment terminal market in the first half of 2022. The Group’s revenue increased by 26.0% to HK$4,182.5 million, with notable success in the EMEA region.
Android smart payment terminals and MAXSTORE bring intelligent value to merchants
With the advent of the post-pandemic era, the Group understands that payment services alone can no longer satisfy merchant needs. PAX Android smart payment terminal products – combined with our suite of SaaS solutions such as MAXSTORE – deliver distinct value to customers and meet the new normal of consumption. PAX Android payment terminal solutions have become the key industry trend and are rapidly reshaping the payment terminal market landscape. In the first half of 2022, sales of Android smart payment terminals soared by 77.8% year-on-year to HK$2,276.6 million, contributing over 50% of the Group’s revenue, thereby becoming a powerful growth driver for PAX.
The MAXSTORE ecosystem has grown at an astonishing rate since its launch. As of 30 June 2022, over 6.5 million payment terminals were connected to the platform with more than 7,000 software applications available to merchants, delivering a whole new world of innovative value-added applications to merchants and unlocking the full potential of Android smart payment terminals beyond payment acceptance functionality. As global shipments of PAX Android smart payment terminals and the number of SaaS users continue to increase, the Group is confident that our SaaS solutions will gain wider adoption, generating gradual revenue growth in future years.
Mr. Jack LU, Chief Executive Officer of PAX, said, “Forward-thinking acquiring banks and PSPs are no longer confined to the traditional services they once provided. By leveraging PAX Android smart payment terminals as the SaaS interface, our clients can now offer one-stop solutions which provide cost savings and efficiency enhancement for merchants of diverse sizes and business segments. More and more acquiring banks and PSPs are incorporating PAX solutions as a key strategic plan to upgrade and modernize their payment acceptance infrastructure.”
PAX continues to lead the international payment terminal market with strong growth
Leveraging the Group’s extensive global sales network, PAX continues forging closer ties with sales channel partners, acquiring banks and PSPs to offer innovative solutions to a wider spectrum of market segments, clients, and merchants. During the first half of 2022, the Group achieved strong sales growth, particularly in the EMEA region.
Latin America and the Commonwealth of Independent States (LACIS)
In Latin America and the Commonwealth of Independent States, PAX continued to be the market leader thanks to its innovative product portfolio.
Brazil remains the Group’s key market in South America, where local consumers are prone to electronic payments. With the country’s retail structure highly concentrated in small to medium size businesses (“SMBs”) and micro-merchant segments, market demand remains largely with PAX mPOS and traditional POS terminals, while sales of our A-series Android smart payment terminal solutions are growing rapidly.
Our continuous investment in other potential Latin American markets is now showing growth momentum. In Mexico and Chile, sales achieved a decent increase in the first half of the year. New opportunities for Android smart payment terminal solutions are also emerging in niche sectors. In Chile, for example, PAX A920 Android smart payment terminals were deployed in parking lots to facilitate the digital collection of parking fees.
Europe, Middle East and Africa (EMEA)
In Europe, the Middle East and Africa, large-scale deployments of PAX Android smart payment terminal solutions are underway, where acquirers, PSPs and ISOs increasingly appreciate the competitive advantages that the MAXSTORE cloud-based platform offers. In the first half of 2022, sales in EMEA grew by 62.2% year-on-year, with particularly strong demand for both our flagship A920Pro and A920 models.
In Europe, recognition of the PAX brand continues to grow with strong revenue recorded in Italy, the United Kingdom, Germany, and Poland. Sales in Turkey and Spain have also shown growth momentum compared to past years. Throughout Europe, PSPs deploying PAX solutions have continued to gain additional market share among SMB merchants, as well as in the unattended self-service, multilane retail, and transportation sectors.
In the Middle East and Africa, sales were particularly strong in Egypt and Saudi Arabia. Driven by Saudi Arabia’s ‘Vision 2030’ financial development plan, the development of cashless transactions
has prospered, where merchants continue to upgrade legacy terminals to PAX Android smart payment terminal solutions. In Nigeria, PAX has maintained its market-leading position with a well-acclaimed excellent reputation among many local acquiring banks.
Asia Pacific Region (APAC)
Across the Asia-Pacific region, the boom in electronic payments has created new opportunities in the payment terminal market. PAX continued delivering products to a wide range of markets and application scenarios.
In India, PAX continued to consolidate its dominant market position and is now recognized as the country’s leading electronic payment terminal brand. According to the report ‘Digital Payments in India’ released by Boston Consulting Group (BCG), digital payments are expected to account for nearly 65% of all transactions in terms of value by 2026, much higher than the current 40%. Electronic payments in India are growing rapidly, creating vast opportunities for the payment terminal market.
In Australia, Indonesia and Thailand, the Group strengthened its partnerships with local acquiring banks and PSPs, resulting in steady sales growth. Given the booming development of electronic payments in Singapore, PAX recently established a local subsidiary and is actively engaging in projects with regional fintech companies.
In Japan, a leading PSP began rolling out the A920 Android smart payment terminals across its nationwide network to merchants. In Hong Kong, the government’s electronic consumption voucher scheme also encouraged the upgrade of traditional terminals to the PAX A920 smart model among supermarkets, retailers and restaurants.
The United States of America and Canada (USCA)
In the United States and Canada, contactless payments that began to be were widely adopted by merchants during the pandemic and have now become more prevalent. Leveraging our first-mover advantage in launching the Android smart series, the Group’s innovative smart payment solutions continue to gain significant traction. In the first half of 2022, sales of the PAX Android smart series recorded strong growth in the region, with a double-digit increase year-over-year, thereby driving sales in the USCA region up by 27.2%.
North America is one of the Group’s key strategic markets. Past efforts to build brand recognition, together with our continuous investment in software certifications and product innovation have laid a solid foundation for future business development. During the period, PAX entered into a strategic partnership with one of the largest banks in the United States. Our Android products A920, E700 and E800 have been introduced to its nationwide merchant network. Meanwhile, PAX also maintained solid relationships with our large ISO network, accelerating the deployment of Android smart payment terminal solutions.
Mr. Jack LU, Chief Executive Officer of PAX, commented, “Looking ahead, the global transition toward cashless societies has become irreversible, creating immense opportunities for the global payments industry and driving even stronger demand for electronic payment terminal solutions. At the forefront of the electronic payment terminal industry, PAX is confident of the industry prospects and will endeavor to deliver secure and innovative payment experience to merchants and consumers worldwide.”