PAX 2022 Interim Financial Results
Android payment solutions become the driving force for PAX growth
PAX Global Technology Limited, the world’s leading provider of electronic payment terminal solutions and related services, has announced its unaudited interim financial results for the six months of 2022, ending 30th June.
In the first half of the year, pandemic restrictions began easing in most countries. As consumers return to brick-and-mortar stores, they now expect electronic payments - especially contactless acceptance - to be a standard feature of their shopping experience. Driven by financial technology advances and government initiatives, the global transition to cashless societies is irreversible, with continuing strong demand for electronic payment terminal solutions. Thanks to PAX Technology's reputable international sales network, extensive product portfolio, and outstanding supply chain management, the Group demonstrated strong resilience and continued to lead the international payment terminal market. In the first half of 2022, revenue increased by 26% to USD 533 million, with notable success in the EMEA region.
(PAX officially reports financial results in Hong Kong Dollars. US Dollars are quoted indicatively in the press release for ease of understanding).
Android SmartPOS & MAXSTORE deliver intelligent value to merchants
PAX Android SmartPOS hardware delivers distinct value to customers when combined with the MAXSTORE SaaS platform. These PAX solutions have become key industry trends and are rapidly reshaping the payment terminal market landscape for merchant service providers. In the first half of 2022, shipments of Android SmartPOS devices soared - almost 78% year-on-year - to USD 290 million, contributing over 50% of the Group’s revenue, becoming a powerful growth driver for PAX.
The MAXSTORE ecosystem continues to grow at an astonishing rate since its launch just a couple of years ago. As of 30 June 2022, over 6.5 million payment terminals were connected to the platform, where more than 7,000 software applications have been made available to merchants, delivering a whole new world of innovative value-added services, and unlocking the full potential of Android SmartPOS well beyond that of traditional payment acceptance. As global shipments of PAX Android SmartPOS and the number of MAXSTORE marketplace users continue to increase, the Group is confident that its SaaS solutions will continue gaining wider adoption, generating recurring revenue growth for 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 and a SaaS interface, our clients can now offer one-stop solutions which deliver cost savings and efficiency enhancements for merchants of all sizes and from different business segments. More acquirers than ever before are incorporating PAX solutions as a key strategic plan to upgrade and modernize their payment acceptance infrastructure.”
Strong growth demonstrates PAX leads the international payment terminal industry
By leveraging the Group’s extensive international sales network, PAX continues forging closer ties with 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, especially in the EMEA region.
Europe, Middle East, and Africa (EMEA)
In Europe, the Middle East, and Africa, large-scale deployments of PAX Android SmartPOS solutions are underway, where acquirers, PSPs and ISOs increasingly appreciate the competitive advantages that the MAXSTORE cloud-based platform offers, in combination with PAX Technology's beautifully designed terminals. In the first half of 2022, sales in EMEA grew by over 62% year-on-year, with particularly strong demand for the flagship A920Pro and A920 models.
In Europe, recognition of the PAX brand continues to grow, with particularly strong revenue recorded in Italy, the United Kingdom, Germany, and Poland. In Turkey and Spain, compared to previous years, sales growth momentum has also been on a positive upward trend. 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 & North Africa, sales continued to be strong in Egypt and Saudi Arabia, the latter helped by the government's ‘Vision 2030’ financial development plan, meaning that cashless transactions are increasingly popular, and merchants continuing to upgrade legacy terminals to PAX Android SmartPOS solutions.
In Sub-Saharan Africa, PAX maintained its market-leading position in Nigeria, with an excellent brand reputation amongst the many local banks, and began winning new market share in South Africa.
Latin America and the Commonwealth of Independent States (LACIS)
In Latin America and the Commonwealth of Independent States, PAX continued as market leader thanks to its innovative product portfolio.
Brazil remains the Group’s key market in South America, where consumers are increasingly conducting electronic payment transactions. With the country’s retail structure highly concentrated in the small to medium size business (“SMBs”) and micro-merchant segments, market demand was primarily for traditional mPOS & POS terminals, although we are now seeing demand for the A-Series Android SmartPOS solutions growing in popularity.
Ongoing efforts to develop market share in other Latin American countries is now producing results, especially in Mexico and Chile where sales increased by a decent amount in the first half of the year. New opportunities for Android SmartPOS solutions are also emerging in niche sectors, such as in Chile where PAX A920 devices were deployed across parking lots to facilitate the digital collection of parking fees.
Asia Pacific (APAC)
Throughout the Asia-Pacific region, a boom in electronic payments has created new opportunities in local payment terminal markets, where PAX continued delivering solutions for a wide range of acquirer and merchant scenarios.
In India, PAX continued to consolidate its dominant market position and is now recognized as the country’s leading and most reputable payment terminal brand. According to the Digital Payments in India report published by the Boston Consulting Group, digital payments are expected to account for nearly 65% of the value of all transactions by 2026, a figure much higher than the current 40%. This will continue to create excellent opportunities for PAX in the payment terminal market.
In Australia, Indonesia and Thailand, the Group strengthened partnerships with 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, while in Hong Kong the government’s electronic consumption voucher scheme encouraged supermarkets, retailers, and restaurants to upgrade from traditional terminals to the PAX A920 Android SmartPOS model.
The United States of America and Canada (USCA)
In the United States and Canada, contactless payments were widely adopted by merchants during the pandemic and have now become more prevalent than in past years. Leveraging our first-mover advantage in launching Android SmartPOS solutions, PAX recorded strong growth in North America, driving sales up by over 27% during the first six months of 2022.
North America is one of the Group’s key strategic regions. Efforts to build brand recognition are now paying off, and our ongoing investments in software certifications and product innovation have laid a solid foundation for future business development. During the first half of 2022, PAX entered into a strategic partnership with one of the largest banks in the United States, with our Android models A920, E700 and E800 being introduced to its merchant base. PAX also continued to work closely with the large network of nationwide ISOs, with whom solid relationships are maintained, to help them accelerate the deployment of Android SmartPOS solutions.
"Looking ahead, the global transition toward cashless societies has become irreversible, creating immense opportunities for the global payment industry and driving even more demand for smarter electronic payment terminal solutions. At the forefront of today's payment terminal industry, PAX is confident of future business prospects, and we will endeavour to deliver secure and innovative payment solutions to acquirers, merchants, and consumers worldwide".
- Jack LU, Chief Executive Officer of PAX Technology