A decade after its founding, and three years after supermarket chain Shufersal became a partner, payments app company PayBox, headed by Arik Frishman, could become wholly owned by Israel's Discount Bank. The bank, which owns 50.1% of PayBox, is in advanced negotiations with Shufersal to purchase its 49.9% stake for NIS 77 million.
Shufersal's board of directors decided in August 2023 to exit the investment in PayBox, through which it paid NIS 6.6 billion last year and which retained NIS 747 million in customer balances at the end of the year.
Under the agreement concluded between Discount Bank and Shufersal in January 2021, each of them was to transfer an amount of NIS 107 million to PayBox, that is, 30 million shekels more than what the bank now proposes to pay for Shufersal’s share. Shufersal’s share of PayBox’s losses amounted to NIS 108 million in 2023 and NIS 66 million in 2022.
The negotiation report comes a day after PayBox announced the “Joint Box,” which allows a number of users to maintain a joint account.
Discount Bank sees the deal as a strategic move that will transform PayBox into its non-banking arm. PayBox has 1.5 million monthly active users and 2.5 million registered users in total, 85% of whom are not Discount Bank customers. This means that PayBox has three times more customers than Discount Bank, and more customers than most Israeli banks.
Discount Bank will be able to offer deposits, credit and other financial products to these customers. Although PayBox is still loss-making, the bank believes it will become profitable within three years and therefore finds the price 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 via payment apps.
Published by Globes, Israel Business News – en.globes.co.il – on June 10, 2024.
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