Paysafe reports disappointing numbers for Q3 and bleak forecast
Paysafe, one of the largest payment processing companies with a global presence, has reported Q3 numbers which showed a slight drop from the earnings and transaction volumes that were reported in Q3 of 2020.
This came in as a big surprise as the numbers in 202 were largely skewed to the downside due to the pandemic when there was not much usage of such platforms. The fact that this quarter has been worse than last year shows how much the company has been suffering. The company posted adjusted earnings of $106.4 million and revenues of $353.6 million which was 1% less than compared to the same quarter last year and its profit forecasts for the rest of the year was also lowered down by the company. The company said that the lower numbers were due to the exit of certain clients in the direct marketing vertical but what it does not say is the fact that it has been facing increasing challenges from new and existing players.
“In the third quarter we reported Adjusted EBITDA in line with our expectations, despite softer than expected revenue, reflecting both market and performance challenges within the digital wallet business,” said CEO Philip McHugh. “While the recent trend will drive an adjusted financial outlook, we continue to see strong momentum across the business.”
The digital payments industry has undergone a large growth in transaction volumes during this year as more people prefer to pay online and on mobile but this has also led to the entry of many startups into the business trying to take a slice of the pie. The existing players like Paypal have also been investing heavily into new technology like crypto and adding upgrades and features, while also looking to expand into new regions with new products, while Paysafe has been generally stagnant during this period. Though it has also got on to the crypto train, it is already a fully loaded train and unless a business innovates itself, it is likely to be left behind quickly in this space. This is the challenge that Paysafe seems to be facing now.
It seems to have realised this challenge a bit late but has been trying its best to catch up as can be seen from its acquisition of viafintech over the last few weeks in a bid to expand into the German and neighbouring regions. It remains to be seen whether this would help to turn around its sagging fortunes.