UK-based bank payment outfit GoCardless is to acquire loss-making Sentenial Ltd, operating globally under the Nuapay brand from EML Payments. The deal is valued at A$54.1.m ($35.6m) and is subject to regulatory approval. EML is taking quite a hit given the price it paid for Sentenial just three years ago.
EML Payments acquired Sentenial in a cash and stock deal valued at $83.2m in April 2021.
Go deeper with GlobalData
The acquisition will significantly scale GoCardless’ indirect channel proposition. It consolidates its position as a key payment provider to existing and new customer segments. This includes Independent Software Vendors (ISVs) and Payment Service Providers (PSPs).
GoCardless will incorporate Nuapay’s offering into its bank payment platform. This enables GoCardless to fast-track the rollout of new disbursement capabilities to its customers and prospects. It will also unlock new vertical sectors and use cases for GoCardless. Examples include payroll, financial services, utilities, insurance, gaming and gambling.
Businesses and partners will benefit from a full-service provider with a relentless focus on bank payments. This enables disbursements and payment collection through direct debit, real-time payments and open banking. In addition, it offers enhanced features for improving payment success and reducing fraud.
EML: share price -77% since 2021, PCSIL woes
EML says that the sale allows it to simplify its organisational structure and provides additional funds to strengthen its balance sheet. According to EML, the Sentenial business was determined to be non-core to EML’s operations. It is unprofitable with a projected A$2m loss in fiscal 2024.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataNews of the sale boosted the EML share price by 11.5%. EML has endured a torrid time since its share price peaked in April 2021. In the three-year period since, its share price is down by 77%. EML woes coincide with the disastrous acquisition of Irish subsidiary PFS Card Services in 2020 for £131.5m. In January this year, EML announced it was winding down PCSIL, stating the business is no longer commercially viable and sustainable. EML said that the prepaid card issuer was projected to lose $13.1m in fiscal 2024.
GoCardless: deal is aligned to its growth strategy
According to GoCardless, the Nuapay deal represents its latest milestone as it accelerates its path to profitability. Over the past 12 months it has announced the launch of GoCardless Embed, its white-label product to PSPs to acquire customers at scale. It has also announced new and renewed customer and partner signings, including JustGiving and Xero.
Hiroki Takeuchi, co-founder and CEO of GoCardless, said: “Nuapay is an established account-to-account payment provider and open banking specialist with a blue-chip customer base. Its business is perfectly aligned to our growth strategy, and will accelerate our vision to become the world’s bank payment network.”
Brian Hanrahan, co-founder and CEO of Nuapay, added: “How the world pays and gets paid is being transformed. Account-to-account payments and open banking are playing the central role in that shift. Building on that shared vision, this acquisition will result in a combined organisation with deep domestic and international payments and open banking expertise plus the scale to harness these opportunities for our clients and partners.”
Significant opportunity for GoCardless
Luke Fossett, General Manager of GoCardless ANZ, said: “The Australian market represents a significant opportunity for GoCardless. We’re committed to continue investing in our local presence since launching our Melbourne-based operations more than five years ago.
Acquiring Nuapay will not only accelerate the execution of our product strategy. It will also enable us to meet the demand for more comprehensive payment solutions from Australian and international businesses. The combination of both organisations will create a full-service bank payment provider that will help businesses collect and pay out via direct debit and PayTo. [That is] something our customers have been asking for across a range of industries. We know that approximately 95 million direct debit payments are made in Australia every month. We estimate the volume of the payout and disbursements market to be almost double that, presenting a significant opportunity for GoCardless.
‘Well-positioned to serve a broader spectrum of the Australian market’
“The acquisition will allow customers to unlock these capabilities via a single payment provider. In addition, they’ll get access to advanced features to help them combat fraud and improve payment success rates. Not to mention integrations into more than 400 platforms they use to run their business, from CRM to billing to invoicing.
“Through this acquisition, we will be well-positioned to serve a broader spectrum of the Australian market. It offers modern and value-adding alternatives to what is typically delivered by a full-service bank. It represents a doubling down on our strategy to deliver simple and secure bank payments. And demonstrates our commitment to listening to and fulfilling the needs of our customers.”
