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Stargroup Ltd boosts EFTPOS future with new deal

Published: 20:39 29 Aug 2016 EDT

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Stargroup Ltd (ASX:STL) has signed an agreement with West International AB to distribute their next generation EFTPOS payment terminals in Australia and New Zealand.

Stargroup has committed to acquiring 2,000 EFTPOS terminals per year and to develop unique EFTPOS software for Australian and New Zealand markets.

Stargroup’s objective is to become the largest independent service operator (ISO) in the payment technology industry in Australia, which it believes it can achieve by the end of 2017.

Todd Zani, CEO, commented: “Our ATM division is profitable and well established and I look forward to cementing our position in the EFTPOS and card payment industry over the course of the next 12 months.

“With circa 900,000 EFTPOS terminals installed in Australia and the industry growing at around 60,000 terminals a year, this is a huge opportunity.”


Background

Stargroup is a technology company that owns a 350+ ATM network in Australia and provides EFTPOS and payWave technologies. Stargroup has a 11% interest in NeoICP Korea Inc, the manufacturer of cashPod ATMs, back office and casino settlement solutions. Stargroup offers two key products - ATMs and EFTPOS terminals. The ATM network generated over $500,000 in revenue for the month of July.


EFTPOS competitive advantage

By gaining access to West International’s technology, and more importantly being in control of the source code within the terminals, Stargroup gains an edge in a number of merchant sectors.

Owning the source code will allow Stargroup to fast track the finalisation and customisation of the EFTPOS solutions for contracted technology partners.

These partners have over 16,500 member businesses and greater than 45,000 businesses that they assist on a daily basis.

Stargroup’s aim is to be the #1 ranked ISO in the EFTPOS and payment industry by the end of 2017.


West International AB

West International AB is a public company listed on the Swedish NASDAQ OMX First North Exchange.

West supplies smart transaction and payment solutions that help the company’s customers to rationalise trade in physical environments.

West provides the infrastructure for the payment methods demanded by the market in the form of reliable card payment terminal solutions.

These are certified to meet the card industry’s highest security requirements and are prepared for the mobile card payments of the future.


Analysis


This distribution agreement represents an important milestone for Stargroup as it builds out its EFTPOS business alongside its profitable ATM network.

By securing access to leading edge technology, Stargroup is able to competitively compete for market share in an industry that is growing at 60,000 EFTPOS terminals per year.

Stargroup’s aim is to become the largest ISO in the payment technology industry. The current dominant ISO player has circa 15,000 EFTPOS terminals.

The company recently reported a record July posting a 11.67% increase on ATM transactions compared to the prior month.

Stargroup continues to exhibit industry best quality metrics and furthermore, continues to improve on these metrics.

Stargroup expects to achieve its first underlying profit and pay a maiden dividend in FY17.

 

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