Nayax (NASDAQ: NYAX) enables electronic payment transactions at 1.1 million unattended devices in 120 countries around the world. Last year the company processed $4.5 billion in payments volume and generated approximately $260 million in revenue. The two most important reasons for a vending machine or other unattended device company to hire Nayax are a) increasing dollar value per purchase by adding electronic payments acceptance which may encourage 25% more spending per transaction at the low end of the range, and b) data analytics on inventory and device performance. All customers are connected to Nayax’s communication network. The company is an internet-of-things (IoT) enabler by providing its own hardware, software, payment gateway. and tokenized payment transactions, which are routed on its own network to 40 banks globally. The company has spent 20 years integrating standard communication protocols for unattended devices, like vending machines. However, many other categories of unattended devices did not utilize recognized communication standards, or have the capability to communicate at all, in which case Nayax wrote its own messaging protocols to fold them into its system. The company has an intuitively good sales pitch: “hire Nayax to increase sales and decrease costs.” To be fair, one market criticism of Nayax’s business model is its inability to write or provide unique end-user applications for specific use cases, however, notwithstanding this constraint, it’s our opinion that Nayax is still the beneficiary of market tailwinds driven by the scaling of automation in a fragmented sector.
