FairFX set to secure access to US market via agreement with Metropolitan Commercial Bank
FairFX has entered into a binding term sheet with Metropolitan Commercial Bank to offer customers its payments services across the United States.
International payments and banking services provider Fairfx Group PLC (LON:FFX) is about to gain access to the US market. The company has just announced that it has entered into a binding term sheet with Metropolitan Commercial Bank to offer customers its payments services across the United States.
FairFX expects to enter into a multi-year contract in the first quarter of 2019 subject to completion of confirmatory due diligence.
Under the current regulatory permissions of the FairFX Group, transacting with US citizens and businesses has generally not been possible, prompting the Group to turn away regular business. This contract, once signed, will enable FairFX to service this demand and begin to grow a customer base in the USA, representing another point of differentiation for the Group.
The term sheet covers both international payments and prepaid card issuance. Metropolitan Commercial Bank is an Issuing Bank in the USA. The Board believes that there is a strong demand for the FairFX Corporate Expense platform across America and this agreement allows FairFX to roll out the platform more widely.
FairFX’s initial focus for the US market is to have its international payments service operational in the first quarter of 2019, whereas card issuance is planned to go live in the second quarter of 2019, due to the logistics and supply-chain lead-times involved.
During the first six months of 2018, turnover at FairFX was up 146.2% year on year to £1.1 billion, in line with management’s expectations. On a like for like basis, excluding the effects of the acquisition of Cardone Banking and City Forex, turnover for the first six months of 2018 grew 22.8% from a year earlier to £532.9 million. Like-for-like turnover from prepaid cards and international payments increased 8.5% to £181.7 million and 39.1% to £334.6 million respectively.
International payments turnover increased 131.6% year on year, supported by additional volumes from City Forex, which saw year-on-year turnover growth of 39%. Since acquiring City Forex in February, the successful migration of FairFX’s international payments to the City Forex platform has led to increased opportunities for the Group to scale through the platform’s straight-through-processing capability.