Mi-Pay Group PLC (LON: MPAY), the leading provider of mobile payment solutions and payment fraud management to Mobile Network Operators and digital content providers, has today announced that the Company has entered into its maiden contract for the provision of fraud management services utilising the Group’s proprietary fraud management platform. The Company is also pleased to announce the appointment of Huub Sparnaay to the Board as a non-executive director.
Fraud management contract
The Company has, on the 17th December 2018, entered into a contract with Alphacomm B.V., pursuant to which the Company will provide fraud management services to Alphacomm. This follows the successful trial of the Company’s fraud management platform since October 2017, which has successfully reviewed over £40.0 million in payment transactions for Alphacomm. Currently, in excess of £4.0 million of payments per month are reviewed using Mi-Pay’s fraud management platform and these will now be processed under the terms of the Contract.
Alphacomm is an online operating service provider for the sale of vouchers for recharging mobile phones and other digital content sales. In addition, Alphacomm provides specialist payments solutions for the telco and digital goods sectors with key relationships in Holland, Belgium and Germany, and recent expansion into North America.
Following the successful trial period, the Contract is for an initial term of 12 months, from 1st November 2018, during which Alphacomm will utilise Mi-Pay’s in-house payment fraud management solution to review the payment transactions processed by Alphacomm for their digital content and mobile top up sales, providing a real time decision to accept or decline the transaction.
In line with Mi-Pay’s other clients, Mi-Pay will indemnify Alphacomm for any subsequent chargebacks and shall only charge Alphacomm for successfully approved transactions. In the six months ended 30 June 2018, the Company generated £0.1 million of revenue through the provision of fraud management services to Alphacomm. This is expected to grow to approximately £0.3 million for the 12 month period ending 31st December 2018.
Appointment of non-executive director
The Board is pleased to announce the appointment of Huub Sparnaay to the board of the Company as a non-executive director, with immediate effect. Through his ownership and development of Alphacomm, Huub brings to the board a great deal of experience of mobile payment solutions and digital content sales, both in the business to business (“b2b”) market directly via mobile operators but also direct business to consumer sales, primarily in Holland, Belgium and Germany via the primary medium of the mobile application. The board believes that Huub can assist the Company in targeting new geographical markets, specifically for its fraud management solutions, understand and consider wider digital content sales to consumers in Mi-Pay’s existing geographical markets and actively review the Company’s current product and mobile app offerings.
Huub Sparnaay has over 20 years’ experience as an entrepreneur in b2c and b2b businesses, primarily focussed on the delivery of on-line digital content and mobile top-ups across mainland Europe and, increasingly, the USA. He initially trained in Business Administration gaining a Master of Science degree at Erasmus University Rotterdam.
As CEO of Alphacomm, Mr Sparnaay’s main role is to adjust mobile and payment related business models to developments in the market. He is also the majority shareholder of Alphacomm Solutions B.V., a service provider focused on delivering payment and fraud management solutions to MNOs, MVNO’s and digital content providers, as well as selling content directly to Alphacomm’s Digital Commerce own consumer base.
Mr Sparnaay is also founder and CEO of No Blue Potato B.V., an investment business focused on the marketing & sales of innovative products and services. No Blue Potato currently has shareholdings in three businesses across Europe.
The Board believes that Mr Sparnaay’s knowledge, experience and track record of growing revenues and payment solutions in complementary geographies and products to that of Mi-Pay’s current portfolio will bring additional value to the Group.
Related party transaction
As Huub Sparnaay is a director of the Company, the Company entering into the Contract with Alphacomm constitutes a related party transaction for the purpose of AIM Rule 13. The directors of the Company (excluding Huub Sparnaay) consider, having consulted with Allenby Capital Limited, the Company’s nominated adviser, that the terms of the Contract are fair and reasonable insofar as the Company’s shareholders are concerned.
Michael Dickerson, Executive Chairman of Mi-Pay Group plc commented:
“We are delighted to announce that we have secured our maiden contract for our fraud management services, a new vertical for us and a product offering that is becoming increasingly relevant to digital merchants. We look forward to working with Alphacomm and developing our relationship further in the future.”
“In addition, Huub’s appointment to the Board brings a wealth of experience and knowledge that is complementary to our existing services but will also bring a deep industry insight in to new product and geographical areas that we are keen to explore. His proven record of building a successful e-commerce digital content payments business will add real value to our strategic discussions.”