Euronet Worldwide Inc.'s EFT Processing and electronic payment segments reported strong fourth-quarter transaction growth, but the gains did not translate into increased revenue for the units.
Overall, the Leawood, Kan., electronic payments processor, which operates primarily outside the U.S., reported revenue of $283.8 million for the quarter that ended Dec. 31, down 0.6% from a year earlier. The company swung to a net loss of $60.7 million for the period from a profit of $8.2 million for the fourth quarter of 2009.
Total transaction volume rose 20%, to 475 million.
Revenue in Euronet's EFT Processing segment fell 7.8%, to $50.7 million. Transaction volume, however, was up 12.3%, to 210 million.
Euronet, which announced the results Feb. 15, attributed the unit's lower revenue to a reduction in Poland's ATM interchange rate announced last April. But the rate reduction also helped to increase transaction volume at the machines, Euronet said. The EFT Processing segment was operating 10,786 ATMs at yearend, up 11% from a year earlier.
Euronet's e-pay segment, which processes point of sale transactions, reported revenues of $167.9 million, down 0.5%. Transaction volume during the quarter rose 27.5%, to 260 million.
The company attributed the rise in transaction volume in part to double-digit volume increases in Germany, Italy and India. "E-pay transaction growth [also] was attributed to the Epay Brazilian acquisition completed in 2010," said Rick Weller, executive vice president and chief financial officer, in a conference call.
"Revenues were down largely due to … mobile operator rate decreases, which were passed along to retailers; the conversion of certain customers to transaction-fee arrangements rather than a commission-based arrangement; and transaction declines in certain economies, … most notably the U.K. and Spain." This was almost fully offset by transaction growth in the Middle East, Germany, India and Brazil, Weller added.
At yearend the e-pay segment was supporting 563,000 payment terminals at 276,000 locations in Europe, the Asia-Pacific, the Middle East, North America and South America.
