Lowthers Cites Steady Progress at Paysafe, But Says ‘We’re Not Done’

When Bruce Lowthers took over a struggling Paysafe Ltd. two years ago, he immediately plunged into what he noted then was a wide-ranging reclamation project. On Tuesday, he called out some progress but also offered a blunt update on his transformation efforts. “We have the right strategy and our execution is working,” he told equity analysts on a call to review his company’s second-quarter results, but added, “We’re not done.”

Indeed, Lowthers reminded his audience that when he assumed command in 2022, “I said it would take three years to turn the company around. There’s still much for us to do.” Progress so far, as he noted early Tuesday, includes growth in the company’s e-commerce business, led by higher e-gaming demand North America, an expanded sales force, and new partnerships. In the last category, Lowthers called out a recently concluded deal with Revolut, a money-transfer app that has 9 million users in the United Kingdom and more than 45 million globally, to sell Paysafe’s eCash product.

At the same time, the company is ditching initiatives it sees as unproductive or unduly risky. “We are taking steps to withdraw from relationships with certain high-risk merchants,” Lowthers said by way of example, without naming any merchants. He is also stressing direct sales to merchants, which can offer “much better margins,” he told the analysts. Partly in response to that initiative, Paysafe has hired 104 more salespeople since the start of the year, according to company figures.

“What we’re trying to do is to be proactive,” Lowthers said by way of illustrating the key difference between the Paysafe of today and the one he took over. “It’s a different stance from where we were historically.” To that end, the company is adopting new products and services. One Lowthers called out, albeit briefly, is pay-by-bank, a capability the company added in the first quarter. Pay-by-bank, an outgrowth of a larger trend toward open banking, enables direct payments from payors’ bank accounts to payees’ accounts.

Paysafe’s merchant-solutions unit, the larger of its two divisions, struck 18 deals in iGaming in the quarter, mainly in North America. The other unit, digital wallets, remained flat at 7 million users, a number Lowthers is hoping to enlarge, and soon. “We want to accelerate digital wallets” with products such as Paysafe’s eCash, he said. ECash lets users make digital payments using available cash and initiated with a barcode. “We can see that 7 million number grow a little bit,” Lowthers noted.

Merchant Solutions produced $32.7 billion in volume in the quarter, up 8%, while generating a 13% rise in revenue to $255 million. Digital Wallets’ volume totaled $5.7 billion, up 6%, good for a 6% jump in revenue to $189.7 million. All told, revenue for the company was $439.9 million in the quarter, up 8%, on $38.1 billion in volume, a 7% increase.

Businesses that aren’t performing will be dropped, Lowthers said, without naming names. “We have the confidence to take these out,” he said. “That will put us in a position for sustainable revenue growth. That’s a different stance from where we were historically,”