Matthew Coad: Hi. Hey guys thanks for taking the question here. Just one on Unified Payments, you guys mentioned that’s the gateway light sea that’s going to be implemented is going into effect in a couple months. Just curious if you could kind of like bifurcate for us that strategy just focused on the smaller customers or will that be impacting the larger customers as well — like any color there on your strategy would be helpful.
Jean Paul Chauvet: Yes so that fee is really the thick. So when you look at our Unified Payment strategy what we’re trying to do is we’re trying to get all of our customers on payments and I think that’s the expected outcome as we want everybody on Unified Payments. But what we’re doing there the carrot is we’re giving away hardware, we’re giving away installation, we’re beating your rates, we’re committed to matching or beating your rates, we’re sending people on site. So we’re giving a lot. But the stick here is. we’re saying well, if you don’t move to Lightspeed payments, we’re going to be charging you a transaction fee of 50 basis points. And so that’s been now communicated to our customers we have a certain percentage of our customers that are now paying this fee, but just being very clear we have a whole set of people that are actually reaching out to those customers that are paying this transaction fee and telling them hey you shouldn’t be paying the fee because you’ll be paying way less if you’re using Lightspeed payment.
So it is just the stick and I think…[Technical difficulty]
Asha Bakshani: Hey, I think we lost JP. I’m going to continue, but I think to answer your question, I think JP answered it but we are ensuring that the transaction fee at 0.5% is across the base. It’s not just for the smaller customers. And so, we are finding that there’s a large contingent of customers that have taken the transaction fee still very early days on Unified Payments and what we are doing is reaching out to those customers to ensure that they understand the implications and trying to again reiterate the benefit of Lightspeed payment. But so far, there’s no concern on our in there.
Matthew Coad: Awesome, super helpful Asha. One other one just on the transaction base gross margin you mentioned the onetime items there, but could you just kind of like walk us through the puts and takes of should we be modeling that similar to what we’ve seen in the past couple of quarters, should that be coming down a little bit due to the shift maybe payment is growing faster than capital, just and any puts and takes that would be helpful.
Asha Bakshani: Right. So the transaction base gross margins, you’re right, there were several temporary items impacting margins this quarter one of which is the one time cost or the launch cost and Unified Payments. We do expect that to dissipate in the coming quarters. There will still be some launch costs in the second quarter but beyond that we expect that to dissipate the commentary on Lightspeed Capital we should see that improve in the second quarter from the front that you’ve just seen in Q1 and to further improve in the back half of the year. So those are the one-time items that will improve and we do expect transaction based gross margins and overall gross margin growth year-over-year to improve in Q2 and then improve even further beyond.
We have to keep in mind referral fees are declining as expected that’s not one time and that will happen every quarter as we take those cohorts of customers on to Lightspeed payments, but we do expect Q2 and beyond transaction based gross margin and overall gross margins to improve given the one time.
Matthew Coad: Thanks, Asha.
Operator: Your next question comes from Richard Tse with National Bank Financial Markets.
Richard Tse: Yes, just had a question on certain payments adoption, and obviously with the focus on larger merchants. What are your existing large merchants saying in regards to adoption like what do they need to be condensed on, like what sort of any obstacles for their adoption. I’m sure you’d had conversations with them, but if you’re going to share that that’d be helpful.
Jean Paul Chauvet: Yes I’ll take this one. Sorry, I’ve got kicked out early on, but the higher GMV merchants are actually more inclined to go with Lightspeed. It’s a much easier conversation, it’s a business conversation and at the end of the day what they want is they want, they’re really focused on optimizing productivity and optimizing number of transactions per employee basically. And so here, the conversation is very easiest like if you can accommodate my rate core, let’s go let’s do it. So I think the conversation is actually easier with the big ones than the small ones. The only thing with the larger ones that have multiple locations like what happens there is there’s a role out. So between the moment they say yes, we’re ready to go ahead and we roll it out to all of the locations to take time.
