Hepsipay - budding to be a payments giant, June Q operations update
/Hepsipay operates 86% of Hepsiburada’s GMV as at June. Hepsipay registered circa 12.5 million wallet customers as at June 30, 2023. These are the users who have opened their wallet accounts giving the required consent to Hepsipay. In the June quarter, customers holding Hepsipay wallets generated 86% of GMV compared to 78% in the June quarter of 2022, successfully migrating Hepsiburada customers over to Hepsipay.
The only e-retailer with a full payments license. With Hepsipay, Hepsiburada remains the only e-retailer with all due licenses in payments and consumer finance secured. Hepsipay is in fact the first business launching a “Buy-Now-Pay-Later” (“BNPL”) solution in the country. Its BNPL solution has been used by over 207 thousand customers by the June quarter. In the June quarter alone, circa 159 thousand orders were processed through Hepsi’s non-card affordability solutions platform, which includes the BNPL and the shopping loans feature commanding 5.0% of the total GMV as at 30 June, up from 3.2% registered in the June quarter of 2022. Some 51% of this GMV are the shopping loans provided by commercial banks across Türkiye.
Hepsipay debit card launched. In May 2023, Hepsipay launched the Hepsipay debit card and made it available through its Hepsipay wallet. Hepsiburada mobile app provides the function and issues the card to any customer completing the required authentication steps. The Hepsipay debit card is also linked to the QR payment feature allowing customers to use their Hepsipay debit cards with those off-line retailers accepting QR payments. There is work in progress to offer the service to any other credit card that customers carry in their Hepsipay wallets. Hepsipay debit card holders can also top up their e-wallets via consumer loans provided by three leading banks in Türkiye or make money transfers from their bank accounts. This capability is what the company labels “always full wallet.”
One-click check-out with Hepsipay. In July 2023, Hepsipay introduced its one-click check-out, the so-called Pay with Hepsipay, service on another platform. The growth in one-click check-out integrations should facilitate growth in Hepsipay’s off-platform expansion.
Hepsipay wallet boosted by Hepsipara loyalty now targeting the lucrative consumer loans. Its strong 12.5 million wallet base, the affordability solutions tailored to a spectrum of wants and needs, its own loyalty program with Hepsipara, and the fast and reliable checkout feature already make Hepsipay a unique payments operation all across Türkiye. Hepsipay is now targeting the country’s large and growing consumer loan market capitalizing on its relations with a network of commercial banks. The household balance sheets in Türkiye have low leverage ratios largely due to inflation. The demand for consumer loans is likely to outpace the growth in other loan categories. The secured consumer loans command an estimated 4% of Turkiye’s GDP while the domestic card payments market, the unsecured household loans, is close to 20%.
Strategic partnerships with Visa and Craftgate announced. Following the second quarter of 2023, Hepsipay has taken strategic steps towards strengthening its position across the Turkish fintech/payments space. Two deals are particularly important to boost Hepsipay’s market share further.
Visa agreement. Hepsipay has signed an agreement with Visa to enter into a five-year strategic partnership with Visa Inc. in relation to Hepsipay’s card scheme in July 2023,
Craftgate investment. Hepsipay made $1 million investment in one of the leading payment gateway service providers in Türkiye, Craftgate Technology (“Craftgate”) in August 2023. Craftgate helps e-commerce companies integrate and manage the virtual point of sale of all banks and emoney institutions from a single platform. The investment should foster the growth across the e-commerce industry.
Hepsipay revenue model. We are working on our revenue model for Hepsipay. We intend to isolate Hepsipay from its parent, where we can. We will then report Hepsipay as a standalone business to see if we can value its equity.