Asantha Wijeyeratne (paid sauce)
Source: Supplied
NZX-listed fintech PaySauce has signed a proof-of-concept agreement to embed its payroll technology in a third-party employment solution.
Assuming the proof of concept is successfully completed, the deal is expected to increase annual recurring revenue and provide PaySauce with significant new growth opportunities, the company told investors today.
The contracting party remains confidential.
PaySauce CEO Asantha Wijeyeratne said the deal was the first step towards demonstrating that PaySauces’ redesigned technology can lead to accelerated scalability.
It has long been a goal of PaySauce to embed our payroll technology into employment software that is already available in the market,” said Wijeyeratne.
“We always knew that workforce software providers needed a solution they could deploy across multiple jurisdictions. These providers are consolidating rapidly, and with this move comes an increasing demand for payroll solutions that can be quickly deployed across multiple territories.”
The new Gen 2.0 SaaS payroll engine can be configured to comply with complex payroll policies in any jurisdiction around the world, PaySauce said.
“Over the medium term, I expect this agreement to create a step change in terms of growth in our revenues and, importantly, our operating cash flow as we build our Australian micro-enterprise payroll application,” Wijeyeratne said.
Prices are based on pay stub rates, with minimum quantities during the contract period. The terms of the contracts will be for a fixed period and will cover many years.
Although the sales cycle for recruiting partners would be longer initially, PaySauce would not incur later costs when the partner acquired new customers. Partners would also own the customer relationship, lowering PaySauce’s customer service costs.
However, ensuring integration upfront and maintaining ongoing service level agreements would incur higher technical development costs.
PaySauce reported revenue of $5.8 million for the year ending March 31, 2023. However, in the quarter to the end of September, annual recurring revenue increased 32 percent to $7.4 million.
In 2021, PaySauce purchased the business and assets of Palmerston North-based SmoothPay, adding over 1,500 SmoothPay subscribers and bringing the company’s total SaaS customer base to over 5,000.
Tags payroll systemsHRfintechPaySauce systems
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