Earthport – transforming cross-border payments

Earthport, the AIM-listed cross-border payments service provider, today announced full year results to June 2013, showing revenue up 37% to £4.1m and losses falling by 23% to £6.5m. After a placing last year and a $10m investment by IFC (part of the World Bank Group), the company had year-end cash of £13m. Around £6m will be used to buy Baydonhill, a foreign exchange broker, so Earthport can provide a comprehensive white label service, with investment planned in increasing geographical reach, particularly in Asia, and building the sales effort.

Earthport’s history illustrates the current rate of change within the payments industry. In 2010 the company began to focus on the underserved and oligopolistic cross-border payments network. This market had been dominated by SWIFT and correspondent banking relationships for larger payments and by companies like Western Union for remittances from migrant workers. However, this sector of the payments market is changing fast; there is exponential growth in volume, particularly of low value payments, with many more participants due to the Internet and globalisation of trade, employment and investment, and a demand for faster settlement and lower charges.

Having already signed up Western Union, Earthport is now adding large customers, such as Bank of America, American Express and large e-commerce players, who will use the company’s platform to deliver low-value payments cost-effectively across Earthport’s network into 60 countries. With ever-increasing demands on their resources, banks are more prepared to use scale-advantaged utility platforms such as Earthport. Hank Uberoi, ex-Goldman Sachs and Hedge Fund manager, now Earthport CEO, sees the company as becoming the key provider of low-value cross-border payment delivery across the whole industry and benefiting from exponential growth. If he is right, and so far so good, Earthport will be one of the most interesting companies to watch in this dynamic market.

Please note: Our report on the payments market, “Setting the Scene for Mobile Banking” can be accessed here. To learn more about our new service on the Financial Services, see here.

Posted by Peter Roe at '09:12' - Tagged: payments