Switchpoint Payments Business Plan — Appendix D: Risk Register
Detailed risk register scoring likelihood and impact, with mitigations and the pre-committed trigger points adopted as policy.
Appendix D: Risk Register
Jump to section
- Overview & contents
- i. Important Notice and Basis of Preparation
- 1. Executive Summary
- 2. The Opportunity
- 3. Market and Regulatory Context
- 4. Product, Technology and Security
- 5. Go-to-Market and Unit Economics
- 6. SWOT and Competitive Position
- 7. Financial Projections
- 8. Cash, Funding and the Balance Sheet
- 9. Sensitivity and Scenario Analysis
- 10. Risk Analysis
- 11. Regulatory, Compliance and Licensing
- 12. Organisation and Management
- 13. Implementation Roadmap
- 14. Key Performance Indicators
- 15. The Offer, Returns and Recommendation
- 16. Assumption Register
- A. Appendix A: Consolidated Financial Summary
- B. Appendix B: Volume, Pricing and Unit Economic Schedules
- C. Appendix C: Funding, Cash and Balance Sheet Schedules
- D. Appendix D: Risk Register
- E. Appendix E: Glossary
|
Risk |
Assessment |
Response |
|---|---|---|
|
Sponsor bank agreement not executed or subsequently terminated |
Existential |
No sponsorship means no participation in clearing and settlement, and therefore no business. Condition precedent to drawdown. A second sponsor relationship is initiated by month 18 to remove the single-point dependency |
|
Card merchant discount rate compression beyond plan |
High likelihood, high impact |
25 basis points beyond plan removes FY2031 EBITDA entirely, taking it to negative R7.1m. Accelerate the account-to-account mix, renegotiate partner revenue share at renewal, raise subscription attachment. Partial mitigation only |
|
Account-to-account attachment below plan |
High likelihood, high impact |
The R1.25m per trade merchant per month assumption is load-bearing. At 75% of plan FY2031 EBITDA is R4.8m; at 50% it is negative R9.5m. Instrument the first two integrations to measure migration from month one |
|
Series A not raised on the modelled timetable |
High likelihood, high impact |
The seed funds 19 months to cash zero against a Series A closing in month 16. A three-month slip requires an immediate cut to the acquisition rate, not a bridge. Month 10 is a hard board trigger |
|
Transaction values above the rail limit |
Medium likelihood, medium impact |
The real-time rail carries a per-transaction ceiling of R50 000. Trade invoices above that must split or settle by conventional transfer, which caps the addressable share of trade volume |
|
Integration partner becomes a competitor |
Medium likelihood, high impact |
Vertical software vendors can monetise payments directly at renewal. Mitigated by multi-year terms, merchant contracting in Switchpoint’s name and settlement account ownership |
|
Cost to serve automation not achieved |
Medium likelihood, medium impact |
The 34% decline across the horizon is an engineering assumption, not a contractual saving. Failure removes R19.8m from FY2031 EBITDA |
|
Wholesale cost of the real-time rail rises |
Medium likelihood, high impact |
Rail and sponsor charges are set by parties Switchpoint does not control, and the account-to-account net margin is only 30 basis points. A material adverse change compresses it directly |
|
Merchant fraud or chargeback losses above plan |
Medium likelihood, medium impact |
Budgeted at 4.5 basis points of card volume for a mixed retail and business-to-business portfolio. Credit-push settlement carries no reversal risk, which limits the exposure to the card rail |
|
Key person departure before certification |
Medium likelihood, high impact |
The chief technology officer and head of risk are conditions precedent. PCI DSS Level 1 attestation depends on both |
|
PCI DSS Level 1 attestation delayed |
Low likelihood, high impact |
No live card transaction may be processed before attestation. Qualified security assessor engaged at closing with a scoped timetable |
|
Settlement float misrepresented as company cash |
Low likelihood, high impact |
Merchant settlement funds are held in a designated account, are not company money, and are matched by an equal and offsetting settlement liability |
D.1 Pre-committed trigger points
|
Point |
Trigger |
Committed response |
|---|---|---|
|
Before drawdown |
Sponsorship agreement not executed |
Do not draw. A payments company without a sponsor is a software company with a burn rate |
|
Month 10 |
Series A process not commenced |
Commence the round or cut the trade acquisition plan. There is no third option at this cash position |
|
Month 15 |
Cash below R5.6m against plan |
Reduce the acquisition rate immediately rather than seeking a bridge |
|
Month 18 |
Account-to-account attachment below 70% of plan |
Strategic reassessment, not a sales intervention. This is the reduced-scope path |
|
Month 18 |
Trade acquisition cost above R39 000 |
Stop trade acquisition, retain the existing book and redirect to the practice segment |
|
Any quarter |
Card merchant discount rate falling faster than 5 basis points a year |
Accelerate the account-to-account mix and open partner revenue share renegotiation early |
|
Any time |
A single integration partner above 40% of originated merchants |
Concentration risk in the channel that owns the merchant relationship |