GHL System Berhad Annual Report 2020

A N N U A L R E P O R T 2 0 2 0 15 MANAGEMENT DISCUSSION AND ANALYSIS CONT’D 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) A full year’s comparison of key data between 2020 and 2019 relating to the e-pay business is found in Table 1 below. The transaction payment value by e-pay grew +5.8% in 2020. The Gross Revenue/Transaction Value declined by -7.6% to 2.9% in the year due to changes in the product mix as well as the merchant mix in which these transactions occurred. Table 1 e-pay (All stated in RM'millions unless stated otherwise) YTD 2019 YTD 2020 % change Transaction Value Processed 4,086.6 4,324.6 5.8% Gross Revenue 126.7 123.8 -2.2% Gross Revenue/Transaction Value (Note 1) 3.1% 2.9% -7.6% Gross Profit 44.9 43.4 -3.4% Gross Profit/Transaction Value (Note 1) 1.1% 1.0% -8.3% Merchant Footprint - e-pay Only (Thousands) 43.5 42.35 -2.6% Note 1 – Gross Revenue or Gross Profit respectively divided by the Transaction Payment Value expressed as a %. (ii) GHL (electronic payment services) This electronic payment services business is driven by TPA arrangements with leading domestic banks in 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 the following activities: a) Various MDR revenue sharing arrangements under direct contracts with merchants and banks in Malaysia, Thailand, and Philippines. b) Domestic debit card merchant acquisition. c) E-commerce TPA (“eGHL”). d) e-wallet providers in Malaysia, Thailand and Philippines. A summary of key data relating to the electronic payment business is found in Table 2 below. While transaction payment value grew strongly at +55.2%, overall revenue declined by -3.3%. due to merchant mix as well as payment type mix which impacts the overall MDR (gross revenue/transaction value) Over the longer term, however, margin should stabilise as more merchants are onboard and a larger portfolio is built as overseas TPA in Philippines and Thailand gather momentum. The introduction of domestic e-wallets in all three markets contributed positively in 2020 and this trend is expected to continue going forward.