Why Online Payments Firm Paysafe is Weighing Sale

Paysafe Ltd, the payments platform that processes transactions between merchants and consumers across global sectors, is exploring a potential sale after receiving takeover interest. 

The London-headquartered firm has appointed a financial adviser to evaluate strategic options.

The NYSE-listed company, which enables businesses to accept credit cards, cash and direct-debit transfers online, has seen its market value decrease to US$1.4bn. 

This represents an 80% decline since its public listing through a special purpose acquisition company (SPAC) in December 2020.

Operational developments

Despite the share price decline, Paysafe reports growth in core segments, including increased average transactions per active user of digital wallets. 

The company has expanded its European presence through a partnership with Revolut, the digital banking service, to provide eCash services to Revolut's 10 million UK customers.

The firm has also partnered with CellPoint Digital to provide payment infrastructure for travel merchants. 

These developments come as Paysafe's total revenues exceeded consensus in the third quarter, though adjusted earnings fell short of Wall Street expectations.

Ownership structure

Paysafe, backed by alternative asset manager Blackstone Inc and private equity firm CVC Capital Partners, is considering the disposal of non-core assets prior to any potential transaction. 

The company went public through a merger with Foley Trasimene Acquisition Corp. II, a SPAC vehicle led by Bill Foley, in a deal that valued Paysafe at US$9bn including debt.

The news triggered a 22% increase in Paysafe's share price, settling at a 12.3% gain in New York trading. Representatives for Blackstone and CVC declined to comment on the potential transaction, while a Paysafe spokesperson was not immediately available.

“Our partnerships and growth prospects remain strong,” said Bruce Lowthers, CEO of Paysafe, when speaking about the company's recent performance.

Paysafe: ‘AI deployment should not be rushed’ 

News of Paysafe’s consideration for a sale comes after its Global Head of Automation, Kenneth Upchurch, spoke about recent AI deployments at the company in comments made to FinTech Magazine. 

Paysafe has developed its own internal AI tool called Ask Paysafe, which integrates with Microsoft Teams and uses GPT-4, a large language model that processes text inputs to generate human-like responses. 

The tool provides staff access to company information resources through natural language queries. “This tool supports thousands of daily chats, enhancing our teams' efficiency,” said Kenneth.

For Paysafe, consumer education around AI adoption remains critical. 

Its research indicates that 30% of consumers have reservations about AI in payments, while 17% express discomfort with the technology. 

The data shows that 28% of consumers feel comfortable with AI in financial services.

The acceptance gap presents challenges for financial institutions implementing AI solutions. 

Companies must demonstrate the technology's practical benefits, including transaction speed improvements and security enhancements.

Financial organisations now focus on educating users about AI's role in reducing friction and strengthening security measures. This education effort aims to address consumer concerns about data privacy and automated decision-making in financial services.

“By leveraging advanced AI-enabled technologies such as biometrics, machine learning, and behavioural analysis, payments providers can create a more secure and frictionless payments ecosystem,” concluded Kenneth.

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