News Summary
In a notable shift in the payments industry, Paysafe Limited has sold its direct marketing payment processing unit to Kort Payments, led by former Paysafe CEO Joel Leonoff. This strategic decision comes after a substantial revenue drop in the direct marketing segment, aiming to enhance long-term shareholder value. Meanwhile, Kort Payments views this acquisition as a chance to expand and deliver innovative solutions in the competitive payments landscape.
Exciting Changes in the Payments World: Paysafe Sells Direct Marketing Unit to Kort Payments
In a move that’s causing quite a stir in the payments industry, Paysafe Limited has announced its decision to sell its direct marketing payment processing business to Kort Payments. This transaction is led by none other than Joel Leonoff, the founder and former CEO of Paysafe himself! What does this mean for both companies? Let’s break it down.
A Strategic Move by Paysafe
Paysafe’s decision reflects a clear and calculated shift in focus. According to Paysafe CEO Bruce Lowthers, the sale of the Paysafe Direct line is part of the company’s strategy to optimize its portfolio and resources. After taking a step back to evaluate their options, they recognized that parting ways with the direct marketing payment processing segment would be beneficial for the long-term value of shareholders.
This decision comes on the heels of a disappointing financial report, where the direct marketing segment saw a whopping 46% decrease in revenue during the last quarter. It’s clear that this part of the business was not performing as hoped, leading Paysafe to make this significant decision.
Kort Payments: Ready for Growth
On the flip side, Kort Payments is no stranger to bold moves. With Leonoff at the helm, they are viewed as a growing player in the omnichannel payments arena. This acquisition marks a significant step in their aggressive growth strategy, particularly as they look to break into the U.S. market and expand their footprint across North America.
Leonoff voiced his enthusiasm for the acquisition, saying it enhances Kort Payments’ capability to deliver innovative solutions to their customers. The deal, primarily involving annual earnout payments over the next five years, hints at a collaborative approach as both companies transition through this sale.
What’s Next for Paysafe?
So, what’s in store for Paysafe following this divestiture? The company is focusing on its ideal customers and exploring niches in what they call the experience economy. This pivot indicates a dedication to nurturing sectors that promise greater profitability and sustainability.
Paysafe isn’t sitting on its hands either; they recently secured a payment institution license from the Central Bank of Brazil, setting their sights on the booming markets of iGaming and online sports betting in South America. Moreover, despite the decline in their direct marketing segment, Paysafe reported an increase in total revenue to $1.71 billion for 2024 and anticipates revenue growth of 6.5% to 8% for the following year.
Looking Ahead
Moreover, Paysafe has projected that its net income for fiscal year 2024 will be between $19 million and $25 million, a notable recovery from a loss of $20 million in 2023. To top it off, they announced a $70 million increase to their existing share repurchase program, signaling confidence in their future performance.
The divestiture of the direct marketing business is a vital step toward refining Paysafe’s strategy, allowing them to allocate resources more effectively and enhance their overall financial performance. With expectations of double-digit growth in adjusted EBITDA, it seems that Paysafe is gearing up for a bright future.
As we watch these two companies evolve in the rapidly changing payments landscape, one thing is crystal clear: exciting opportunities lie ahead.
Deeper Dive: News & Info About This Topic
HERE Resources
Additional Resources
- PYMNTS: Paysafe Sells Direct Marketing Payment Processing Business to Kort Payments
- Wikipedia: Paysafe
- Electronic Payments International: Paysafe to Sell Business Line
- Google Search: Paysafe KORT payments
- Gambling Insider: Paysafe FY24 Revenue Up 6%
- Google Scholar: Paysafe Revenue Growth
- Royal Gazette: Paysafe Ltd Sells Business Line
- Encyclopedia Britannica: Paysafe
- Fintech Futures: Merrco Payments Rebrands to Kort Payments
- Google News: Paysafe Direct Marketing
