Discount Bank completes buyout of PayBox from Shufersal

PayBox app  credit: PayBox
PayBox app credit: PayBox

Discount Bank is paying NIS 77 million for Shufersal's 49.9% stake in the payments app, which it sees as a strategic asset.

The new controlling shareholders and co-CEOs of supermarket chain Shufersal (TASE: SAE), brothers Yosef and Shlomo Amir, have ended the company’s romance with payments application PayBox. Yesterday evening, Shufersal completed the sale of its 49.9% holding in PayBox to Israel Discount Bank (TASE: DSCT), which already held the other 50.1%, for NIS 77 million. The negotiations on the deal between Shufersal and Discount Bank were reported a week ago.

The Shufersal board decided in August 2023 to exit from the investment in PayBox, through which NIS 6.6 billion in payments were made last year and which held NIS 747 million in customer’s balances at the end of the year.

Under the agreement between Discount Bank and Shufersal of January 2021, each was to transfer to PayBox NIS 107 million, NIS 30 million more than the bank is now proposing to pay for Shufersal’s stake. Shufersal’s share of PayBox’s losses was NIS 108 million in 2023 and NIS 66 million in 2022.

Discount Bank sees the deal as a strategic move that will turn PayBox into its non-banking arm. PayBox has 1.5 million active users monthly and 2.5 million registered users altogether, 85% of whom are not Discount Bank customers. This means that PayBox has three times as many customers as Discount Bank, and more customers than most of Israel’s banks.

Discount Bank will be able to offer these customers deposits, credit, and other financial products. Although PayBox still makes losses, the bank believes that it will become profitable within three years, and therefore sees the price as attractive.

Discount Bank CEO Avi Levi said, "PayBox’s success in selling financial products in the past year, and the fact that more than 85% of its customers are customers of competitor banks, make it an important and attractive arm for the group. We are glad of the opportunity to return to holding all of the shares in it and to support its continued growth, with an emphasis on offering unique non-bank services."

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 by means of payment apps.

Published by Globes, Israel business news - - on June 17, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

PayBox app  credit: PayBox
PayBox app credit: PayBox
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