Irish e-payments firm makes US$1.6m revenues

15 Nov 2005

An Irish-led international card payments firm that recently established its headquarters in Dublin last night reported a 20pc increase in revenues to €1.6m, up from €1.3m during the same quarter last year. However, the company reported major losses of US$22.1m, which included a legal settlement with a Chinese firm.

FreeStart Technology Corporation is an international online payments company headed by three Irishmen and responsible for processing up to one million credit card payments for global brands such as Ikea and Finnair. The company has moved its company headquarters from the Dominican Republic to Dublin. The company also has offices in Helsinki and Geneva.

The company is led by chief executive Paul Egan, chief financial officer Ciarán Egan and operations director Fionn Stakelum. It’s wholly owned subsidiary Rahaxi Processing Oy, based in Helsinki, and has a robust Northern European Base24 credit-card processing platform. Rahaxi Processing Oy currently processes in excess of one million card payments per month for such companies as Finnair, Ikea and Stockman.

The company’s Enhanced Transactional Secure Software is aimed at empowering consumers to consummate e-commerce transactions with a high level of security using credit, debit, ATM (with PIN) or smart cards.

Egan explained that a higher volume of transactions at wholly owned subsidiary Rahaxi Processing Oy were responsible for the revenue gains. Rahaxi Processing’s transaction volume climbed more than 18pc. The subsidiary processed more than 15.4 million transactions during the fiscal year, up from slightly more than 13 million transactions processed during the year earlier period.

“We are very pleased with our progress,” said Paul Egan. “Processing US$1.7bn in worth of transactions is a substantial achievement. We are on track in establishing Rahaxi as a solid player in the cross-border transaction processing industry. We are rolling out our products in our target markets. We are one of the few companies with a product line nearly fully compliant with the upcoming Express, MasterCard and Visa regulatory changes in the transaction processing industry, which should enable us to continue our growth in the coming months.”

Chief technology officer Angel Pacheco added that after 18 months of technology and business development, the company now has a recognised payment processing platform, providing partners and customers with a wide range of payment and technical solutions from transaction processing and software development to point of sales devices and integrated payment system components.

“In alliances with customers such as Global Refund and vendors such as Hypercom,” he said, “Rahaxi Processing has developed unique and complex products that will ensure its ever-growing presence in the payment industry.”

The company reported a net loss of US$22.1m in the fiscal year, ended June 30, an increase of US$15.7m, or approximately 249pc from the prior year. “We want to be sure our investors understand that more than US$20m of this loss consists of non-cash expenses,” chief financial officer Ciarán Egan, said.

“These non-cash items include stock grants, options, warrants and other intangibles with a fair value of approximately US$15.8m issued to officers, directors and consultants. It also includes warrants and options, valued at approximately US$647,000, issued to Xinhua Financial of China in recognition of its contribution in developing the Chinese market for FreeStar Technology’s products as well as approximately US$1.032m in non-cash costs pursuant to a legal settlement.

“We also took a charge of US$2.5m stock certificates issued in connection with terminated acquisitions that were subsequently cancelled, but as yet remain unrecovered,” said Ciarán Egan.

At June 30, 2005, the company had approximately US$632,000 in cash, an increase of approximately US$431,000 over the prior year.

By John Kennedy