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  5. PAY: Payfare seems to have carved out a nice little niche for itself though revenue looks like it is concentrated in several major customers. [Payfare Inc. Class A Common Shares]
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Q: Payfare seems to have carved out a nice little niche for itself though revenue looks like it is concentrated in several major customers. How susceptible is their business model to competition?
Thanks, Hugh
Asked by Hugh on January 22, 2024
5i Research Answer:

PAY as a fintech company is susceptible to competition, and much depends on its ability to differentiate its offerings and continue to advance its technology. It is a small company ($326M market cap) and at this size, it could be easily outcompeted by larger peers. But, with that said, analysts expect strong sales and earnings growth in the coming years, and its rapid increase in margins over the years has been encouraging. It has a good cash level for its size, and while it is susceptible to competition, it continues to sign agreements with several partners, including international big box retailers, to provide earnings payouts to the retailer's delivery gig workforce in Canada. Given enough time, we could see its competition finding it difficult to compete with PAY's strong momentum.