Paysafe Gains Momentum As CEO Lowthers Completes His First Year at the Helm

Paysafe Ltd. has been all about growth since Bruce Lowthers took over a year ago as chief executive, and on Tuesday he contended the London-based processor is expanding nicely in its key wallet and iGaming markets.

“We returned to growth in the second half of 2022,” Lowthers told equity analysts on a conference call to discuss Paysafe’s first-quarter results. Driving growth, he added, is an expansive menu of payment options available to merchants “with a single API.” Beefed-up cross-selling, new loyalty and rewards “enhancements,” and “ongoing improvements” in payments products to “reduce customer friction” are also adding to the company’s momentum, he said.

Indeed, Paysafe’s acquiring business, which accounts for more than half of the company’s revenue, exhibited much of the growth Lowthers was talking about. It hit $28.6 billion in payments volume, up a healthy 10% year-over-year, with revenue up 8% to $208.5 million.

Lowthers stressed an opportunity to reach more casinos in North America. The company now supports iGaming in 27 U.S. states, having added Ohio, Massachusetts, and Washington recently and five states total over the past 12 months.

Paysafe’s digital-wallet business, exemplified by the Skrill and Neteller products, generated $188.7 million in revenue, up 6%, on flat volume of $5.4 billion. It’s a smaller business than merchant processing, but it’s far more profitable for Paysafe, generating margins in the low-40% range compared to 25% for acquiring. Here, Lowthers lay stress on cross-selling the wallets to existing clients. “We’re very excited by wallets as a platform,” he said. “They allow us to do both branded and unbranded [products]. We’re very excited about the opportunity that will bring us.”

Lowthers is particularly looking for Paysafe’s wallets to steadily rise along with cards as payment methods in the iGaming market. “You’ll see opportunities for wallets to emerge” in that business, he said.

Overall, the company “is in a stronger position than we were a year ago,” said Lowthers, who was a top executive at the big processor FIS Inc. before taking the reins at Paysafe. “We have a pipeline [of business] much larger than it was a year ago. We like the early results we’re seeing.”

For the quarter, Paysafe hit $33.8 billion in payments volume, up 8%, while revenue rose 7% to $395.2 million. Rising interest expense on the company’s $2.6 billion in debt (including digital-wallet deposits) clipped its net income, which fell 11% to $33.1 million.