Wright Express Corp. continues to extend the reach of its virtual cards tied to travel, announcing today a partnership with the Australian operations of Webjet.com, an electronic manager and marketer of travel and related services.
Webjet's parents include Webjet Marketing Pty Ltd., Australia's largest online travel agency, and Farecrawler Inc., a U.S.-based online travel agency.
The deal complements similar partnerships Wright Express has with other online travel-booking companies, including Priceline, Orbitz and Expedia, but for the airline industry instead of hotels, Mike Dubyak, Wright Express CEO, said in an Aug. 1 interview just before the fleet card company reported second-quarter earnings.
Wright Express expects to complete the Webjet implementation process by September, Dubyak said during the subsequent analyst earnings call this morning.
In May, South Portland, Maine-based Wright Express expanded its virtual card capabilities by purchasing United Kingdom-based CorporatePay Ltd., which offers virtual prepaid and credit cards.
The purchase enabled Wright Express to pursue deals with airlines, which prefer to be paid upfront for online ticket purchases, Dubyak said during the interview. Wright Express already issues a virtual MasterCard credit card in the U.S., primarily for hotel bookings.
The acquisition "gives us the platform to say we can do virtual cards credit-wise or prepaid-wise,” he said. “We will look at other opportunities, but if you look at online travel, the two biggest areas are airlines and hotels.”
Though the Webjet agreement's potential is small in relation to the U.S. online travel-agency business, it provides the added asset of a meaningful player in the Australia market, Dubyak said during the call. “With this in hand, we continue to work to build the pipeline in this region as well as other target markets as we work to globalize our virtual card business,” he said.
Wright Express is integrating its virtual credit card program with the virtual prepaid card offered by CorporatePay, which has used various banks to issue and process its cards, Dubyak said.
In the U.S., Wright Express, through Wright Express Financial Services Corp., a Utah industrial bank, issues its own cards. It uses Total System Services Inc., or TSYS, to process the transactions. In Europe, Raphaels Bank issues its cards, and TSYS processes the transactions, Dubyak said.
Working with consultants, Wright Express has identified the U.S., UK and Australia as the chief areas to focus on to grow its virtual card business, Dubyak said, noting the fleet card provider also plans to pursue business in other parts of Europe.
Last month, the company signed a deal with PaySpan Inc. that extends the reach of its virtual MasterCard for the first time to the health care reimbursement market. PaySpan handles $35 billion in reimbursement volume annually.
The Webjet, PaySpan and CorporatePay deals should begin to have an impact on earnings next year, with much of the integration and setup taking place this year, Dubyak said.
“We feel very good about what we've done overall,” he said. “It sets us up to continue growing into the future.”
As a company, Wright Express continues to show positive revenue growth.
Total revenue for the three months ended June 30 were $153.1 million, up 8.4% from $141.3 million. Net income was down 25.4%, to $30.3 million from $40.6 million, primarily because of volatile fuel-price derivatives, Dubyak said. Adjusted net income was up 10.1%, to $39.1 million from $35.5 million.
The company's Other Payment Solutions business, which includes online travel initiatives, generated revenue of $38.4 million, up 39.1% from $27.6 million. Other Payment Solutions processing revenue was $25.4 million, up 28.9% from $19.7 million. Purchase volume was $2.82 billion, up 28.8% from $2.19 billion. The net interchange rate was 0.9%.
Fleet Payment Solutions revenue was up 0.9%, to $114.7 million from $113.7 million. Within that division, fleet payment-processing transactions totaled 63.9 million, up 5.4% from 60.6 million.
Total corporate card purchase volume grew 47.4%, to $2.8 billion from $1.9 billion.
Domestic retail fuel prices rose 1.9%, to an average of $3.79 per gallon from $3.72 a year earlier. The average fuel price in Australia was US$5.60, down 3.4% from US$5.80. The average number of vehicles serviced worldwide was up 7%, to 6.7 million.
In midday trading Aug. 1, shares of Wright Express stock on the New York Stock Exchange were selling for $62.49, down 1.9% from the previous day's $64.38 closing price.