eServGlobal serves up commercial treat via HomeSend subsidiary and Mastercard

Dual-listed payments company eServGlobal (ASX: ESV) has roused the market this morning by unveiling a recent deal with “one of the world’s largest global financial institutions” to the public.

The deal allows the as yet unnamed financial institution to use Mastercard Send for cross-border payments and leverages the unique capabilities of the HomeSend network to reach millions of disbursement end-points. The deal also adds into a series of existing agreements signed in 2017 and 2018 with more than 20 smaller banks.

Commenting on the deal, eServGlobal Executive Chairman John Conoley said, “This contract is one of the larger opportunities previously communicated to the market and is a clear endorsement for HomeSend from one the world’s largest financial institutions.”

With the contract now announced the company said that it expects to see a volume uplift over the course of 2018 and beyond.

Keeping tight-lipped about the identity of its banking client, Mr Conoley added: “Banks of this nature have the capability of sending multiples of billions of dollars per year through a variety of channels.

The rapid build-up of bank and financial institutions now enabled to exploit the HomeSend network has provided eServGlobal’s Board of Directors with confidence that the JV’s pivot into the bank-led market is succeeding and has provided a volume platform for the future of the business.”

Commercial journey commences

According to Mr Conoley, this deal is the first incremental step for the company and a springboard to larger volumes over time.

“This spread of volume is critical to a small growing business and HomeSend management have skilfully navigated that path and de-risked the challenges faced by many start-ups,” he said.

Today’s news effectively means that HomeSend has succeeded in meeting major commercial and execution milestones, working in conjunction with majority shareholder Mastercard. According to eServGlobal, Mastercard is not only an investor in the joint venture but is also a “key commercial partner” for HomeSend.

Mastercard offers a service called Mastercard Send for cross-border payments which utilise the reach and capabilities of HomeSend to offer international payment capabilities.

eServGlobal said that integration between HomeSend’s international payments capability and Mastercard Send has been “ongoing for some time”, and that “live transactions have now been successfully passed across these platforms enabling an increased set of use cases for individuals and businesses to remit, pay or disburse funds cross-border” with the same convenience and security as they would domestically.

Live first phase volumes are currently expected to begin by the third quarter of 2018, with a second phase already identified and being worked on, according to eServGlobal.

Furthermore, eServGlobal admits that “test transactions have already been completed across a number of corridors and the precise speed of volume build-up will become clear as the “transactions start to flow”.

The news was unexpected and therefore significantly price sensitive, leading to eServGlobal’s shares to jump 19% higher up to $0.19 per share in morning trade.