Eservglobal Ltd's (AX:ESV) HomeSend JV has taken some good steps forward over the past month, supporting its ambition of breaking even in FY17. Today’s announcement of a partnership with Ericsson (ST:ERICAs) appears to have gained the most attention, although we believe the partnerships with Korean bank KEB Hana and the Commercial Bank of Ethiopia are more meaningful in the nearer term.
During September eServGlobal announced three partnerships for its HomeSend JV, in which it holds a 35% share with Mastercard Incorporated (NYSE:MA) and BICS. We believe the most significant (particularly in the near term) is with Korean bank KEB Hana, which has the highest volume potential of all the JVs partners yet. The partnership with Commercial Bank of Ethiopia also has good volume potential and is expected to be launched commercially by the end of the year – although volumes for all partnerships will ultimately be dictated by user uptake – and the success or extent to which the banks integrate the solution into their portfolio. We understand that both of these deals were driven by Mastercard, indicating the JV is now benefitting more strongly from Mastercard’s global presence across the global banking industry. Today’s announcement of a HomeSend partnership with Ericsson should support the JV’s drive to broaden reach, but is unlikely to have any direct impact in the near term.
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