Electronic payment solutions provider VeriFone Systems Inc (NYSE:PAY) has had a tough time this year. Shares have fallen off a cliff as VeriFone’s business strategies have been called into question and competitors have eaten into its market share. That’s why the 10% pop that VeriFone enjoyed last Friday came as a welcome relief to shareholders.
The company, which was once slated to ride the growth of digital payments, lost its way as it tried to change its business model and failed to respond to customer needs. But VeriFone Systems Inc (NYSE:PAY)’s management stated in June that they’ll try and get the company back on track after recognizing their mistakes.
Back on track
Recent moves and developments suggest that VeriFone is indeed moving in the right direction. For starters, research and development spending was up 19% in the previous quarter from the year-ago period. VeriFone Systems Inc (NYSE:PAY) also introduced a new payments software suite known as GlobalBay Merchant, and had signed up around a dozen partners that serve 500,000 merchants. VeriFone is in the process of adding more partners as it looks to build a substantial customer base going forward.
VeriFone Systems Inc (NYSE:PAY) claims to have gained market share at a major retailer in the U.S. It is also in partnership with big names such as Costco, Lowe’s, McDonald’s, Kroger, Safeway, etc. for providing payment solutions. Then there were other positives, such as winning a tender for 450,000 terminals in Russia, a contract renewal with India’s biggest petroleum company, and customer wins in Brazil and the U.K.
These wins should certainly boost investors’ confidence, as VeriFone was probably losing out on contracts to peers such as INGENICO S.A. (OTCMKTS:INGIY). Ingenico would be deploying contact-less payment terminals for Banco Nacional de México (Banamex). Even VeriFone was in the race for this contract and ultimately lost out.
Banamex is looking to put the 1 million contactless cards it issued earlier this year to use, which is why it is looking to roll out payment terminals to around 30,000 retailers. So Banamex’s choice of INGENICO S.A. (OTCMKTS:INGIY)’s solution over VeriFone was no doubt a setback. But now that VeriFone Systems Inc (NYSE:PAY) has replaced existing suppliers in the U.K. and Brazil, perhaps the company’s products are finally gaining some traction.
Mobile moves
VeriFone also announced a mobile platform last month — Way2ride — which would provide taxi passengers in New York City a new payment method. What’s more, VeriFone is also partnering with Hailo, a taxi hailing app. VeriFone is serving as the payment software platform in this partnership and expects more apps to join its platform going forward.
