GHL System Berhad Annual Report 2017

GHL SYSTEMS BERHAD 18 3. PERFORMANCE BY BUSINESS SEGMENT AND GEOGRAPHY (cont’d) 3.1 Performance By Business Segment (cont’d) a) Transaction Payment Acquisition (“TPA”) Segment (cont’d) (i) e-pay (reload and collection services) (cont’d) Table 1 e-pay (All stated in RM’millions unless stated otherwise) 2016 (Restated) 2017 % change Transaction Value Processed 3,634.0 3,763.3 3.6 Gross Revenue 145.8 139.4 4.4 Gross Revenue/Transaction Value (Note 1) 4.0% 3.7% 7.7 Gross Profit 44.5 45.6 2.4 Gross Profit/Transaction Value (Note 1) 1.2% 1.2% -1.1% Merchant Footprint - e-pay Only (Note 2) 31.7 36.4 14.7 Note 1 – Gross Revenue or Gross Profit respectively divided by the Transaction Value Processed expressed as a %. Note 2 – 2016 figures have been restated to reflect the absolute number of EDC terminals deployed at merchant outlets contracted by e-pay to accept e-pay products and services. This includes EDC Terminals, ePOS (Integrated POS) as well as PayHere (Registered Mobile Application Users). Previously, we reported the total number of acceptance points which included EDC Terminals, ePOS (Integrated POS) and an estimated number of Bank ATMs/CDMs that accept e-pay services. (ii) GHL (electronic payment services) This electronic payment services business is driven by our TPA arrangements with leading domestic banks in our respective markets as well as a leading China e-wallet provider which is expanding into Asean. The existing GHL TPA data as shown in Table 2 comprises of the following activities: a) Various MDR revenue sharing arrangements under direct contracts with merchants and banks in Malaysia, Thailnd and Philippines. b) Malaysian domestic debit card (“MyDebit”) merchant acquisition. c) Internet TPA (“eGHL”). d) e-wallet providers. A summary of key data relating to the card payment business is found in Table 2 below. While transaction values processed grew strongly at +50% transaction margins declined yoy due to ongoing competition in the market for merchant acquiring as banks compete in terms of MDE and monthly rental. Over the longer term, however, margins should stabilise as more merchants are on-boarded and a larger portfolio is built as well as our overseas TPA in Philippines and Thailand gather momentum. The introduction of e-wallets in all three markets in 2018 is expected to contribute positively. MANAGEMENT DISCUSSION AND ANALYSIS CONT’D