Cuscal talks up mid-teens growth, market share; IPO pricing next week

afr.com:

Cuscal is expected to fix pricing for its IPO next week, after the payments group’s executives and advisers zipped around the world to sell investors on the company and the coming “infrastructure-like” opportunity.

Cuscal chief executive Craig Kennedy and his team are meeting offshore investors this week. Daniel Munoz

Presentations being handed out from London, Hong Kong and Singapore to Sydney and Melbourne said Cuscal primarily earns its $300 million-a-year revenue from per-transaction fees it charges across its three core capabilities: issuing, acquiring and non-card payments.

Each of those three segments is controlled by major banks who have at least a 50 per cent market share. Cuscal’s selling point is it’s the only end-to-end payment player outside them – and it’s putting out numbers to vouch for that.

Take for example, Cuscal’s “issuing” unit which helps its clients make, clear and settle payments from debt cards, prepaid cards or pre-paid cards. The big banks control a 74 per cent slice of the $10.6 billion in market volume, while Cuscal has 8 per cent and smaller players have 18 per cent.

It’s biggest market share is in ATM transactions at 21 per cent to the major banks’ 50 per cent, while its smallest is in taking credit card payments, where it has just 1 per cent of the total $3.3 billion pie.

Local fund managers are being told to think of Cuscal as different from the likes of Tyro Payments, while their counterparts overseas are being pointed to S&P 500 constituent Jack Henry. Potential investors are being told the float should have no troubles getting off the ground despite volatility and a dead IPO market, given its infrastructure-like earnings profile.

In all, the entire business rests on 93 clients, about