A decade after it was founded, and three years after supermarkets chain Shufersal became a partner in it, payments application company PayBox, headed by Arik Frishman, could become wholly owned by Israel Discount Bank. The bank, which holds 50.1% of PayBox, is in advanced negotiations with Shufersal on buying out its 49.9% stake for NIS 77 million.
The Shufersal board decided in August 2023 to exit from the investment in PayBox, through which NIS 6.6 billion in payments were made last year and which held NIS 747 million in customer’s balances at the end of the year.
Under the agreement between Discount Bank and Shufersal of January 2021, each was to transfer to PayBox NIS 107 million, NIS 30 million more than the bank is now proposing to pay for Shufersal’s stake. Shufersal’s share of PayBox’s losses was NIS 108 million in 2023 and NIS 66 million in 2022.
The report of the negotiations comes a day after PayBox announced “Joint Box”, enabling a number of users to maintain a joint account.
Discount Bank sees the deal as a strategic move that will turn PayBox into its non-banking arm. PayBox has 1.5 million active users monthly and 2.5 million registered users altogether, 85% of whom are not Discount Bank customers. This means that PayBox has three times as many customers as Discount Bank, and more customers than most of Israel’s banks.
Discount Bank will be able to offer these customers deposits, credit, and other financial products. Although PayBox still makes losses, the bank believes that it will become profitable within three years, and therefore sees the price as attractive.
PayBox’s losses are smaller than those of rival payments app Bit, owned by Bank Hapoalim, which controls most of the market, with 90% of all cash transfers made by means of payment apps.
Published by Globes, Israel business news – en.globes.co.il – on June 10, 2024.
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