Transaction volume for Euronet Worldwide Inc.’s Money Transfer segment continued to grow during the third quarter as the company worked to expand the unit’s reach through additional payout locations and markets, company officials told analysts during an Oct. 27 conference call to discuss company earnings.
Euronet added payout services in Jamaica, Ukraine, Bosnia, Senegal and Guatemala.
For the quarter ended Sept. 30, Euronet’s Money Transfer segment reported revenue of $63.1 million, up 4.6% from $60.3 million during the same period last year. It processed 4.8 million transactions during the quarter, up 6.7% from 4.5 million a year earlier.
Foreign-exchange rate fluctuations had a “pretty sizeable impact on consolidated results,” in this segment, Rick Weller, Euronet chief financial officer, said during the call.
Additionally, the Money Transfer unit benefited from RIA Financial Services Inc.’s global expansion into new markets and payout corridors, Weller said. RIA is a Euronet funds-transfer company that serves 107 countries.
Euronet’s electronic funds transfer processing segment reported revenue of $49.1 million, down 3.3% from $50.9 million. The segment processed 199.4 million transactions, up 5.8% from 188.4 million. The segment continues to benefit from higher transaction fees in Germany that most likely will continue through the fourth quarter, said Mike Brown, Euronet CEO.
The company believes the EFT-processing segment’s income will decrease early next year, when Germany switches to an “uncapped, market-driven surcharge structure similar to the U.S., Brown contends.
The expanded rollout with OMV Refining & Marketing GmbH, a major Central European oil and gas company, in Central and Eastern Europe also contributed to the EFT segment’s transaction growth, Weller said. In 2007, Euronet signed a cross-border merchant-acquiring deal with OMV to provide cross-border transaction-processing services compliant with the Single Euro Payments Area rules.
The company also expanded a network-participation agreement with Citibank Romania S.A. and renewed agreements with Polbank EFG and Lukas Bank S.A., both located in Poland, Brown noted. Additionally, “[Euronet] signed agreements with Development Credit Bank and Barclays Bank PLC in India to outsource a total of an additional 155 more ATMs,” Brown said.
The company’s Epay unit, which processes point-of-sale transactions initiated at 541,000 terminals deployed in 266,000 retail locations in Europe, the Asia-Pacific and the U.S., reported revenue of $148 million, down 3.6% from $153.6 million. It processed 226.6 million transactions, up 16.6% from 194.4 million.
In the U.S., Euronet launched an Epay-branded open-loop gift card, Brown noted.
As a company, the Leawood, Kan.-based electronic-payments processor, which conducts the majority of its operations outside the U.S., posted net income of $21 million, up 11.1% from $18.9 million. Revenue totaled $260.2 million, down 1.7% from $264.8 million. Transactions processed during the quarter totaled 430.8 million, up 11.2% from 387.3 million a year earlier.
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