Switchpoint Payments Business Plan — Go-to-Market and Unit Economics

Distribution through the vertical software merchants already run, cost per merchant acquired, and the take rate each merchant generates.

Go-to-Market and Unit Economics

Jump to section

On this page

5.1 The integration partner channel
5.2 Acquisition economics
5.3 Retention
5.4 The channel is also the concentration risk

5.1 The integration partner channel

Acquisition runs through vertical software vendors rather than through a field sales force. A practice management vendor or a trade-counter enterprise resource planning vendor already holds the merchant relationship, already has the merchant’s data, and already has a commercial reason to add a payments revenue line. Switchpoint enables the partner once and the partner enables merchants thereafter.

	FY2027	FY2028	FY2029	FY2030	FY2031
Live merchants at year end	149	533	1 249	2 355	3 836
Practice segment	110	384	874	1 601	2 532
Trade segment	39	149	375	754	1 304
Integration partner revenue share, Rm	0.5	2.8	8.0	17.0	29.9
As a share of net revenue	16%	15%	16%	16%	16%

Figure 9. Live merchants at each year end, by segment, net of churn.

5.2 Acquisition economics

	FY2027	FY2028	FY2029	FY2030	FY2031
Practice acquisition cost	R11 800	R10 800	R9 700	R8 900	R8 100
Practice lifetime value, 36 months	R62 909	R62 909	R62 909	R62 909	R62 909
Practice ratio	5.3x	5.8x	6.5x	7.1x	7.8x
Trade acquisition cost	R46 000	R41 000	R35 500	R31 000	R27 500
Trade lifetime value, 36 months	R87 400	R87 400	R87 400	R87 400	R87 400
Trade ratio	1.9x	2.1x	2.5x	2.8x	3.2x

Practice payback is 4.6 months against a contribution of R2 590 a month; trade payback is 15.0 months against R3 074. The difference is not the contribution — the trade merchant is worth more monthly — but the acquisition cost, which is nearly four times higher because it requires integration with the merchant’s enterprise resource planning system and a materially longer sales cycle.

5.3 Retention

Monthly logo churn is modelled at 2.4 per cent in the practice segment and 1.4 per cent in trade, reflecting differential switching cost. A practice can change card acquirer in a fortnight. A trade counter with settlement, reconciliation and payouts embedded in its enterprise system cannot, and will not attempt it for a small price difference.

5.4 The channel is also the concentration risk

Concern	Why it arises	How the plan responds
The partner owns the merchant relationship	Merchants are originated inside software they already run, and the vendor introduced them	Merchants contract with Switchpoint in Switchpoint’s name, and settlement runs to a Switchpoint-controlled account
The partner can monetise payments itself	A vertical software vendor with scale has an obvious reason to take the payments margin directly	Multi-year minimum terms; the 18% revenue share is deliberately generous at seed stage to make displacement unattractive
A single partner could dominate originations	Two integrations at launch means one partner could be half the book	A trigger caps any single partner at 40% of originated merchants; a third and fourth integration follow the Series A
Renewal is the leverage point	The partner’s bargaining position strengthens as the book it originated grows	Renegotiation is modelled at renewal in the company’s favour, but the plan does not assume it. 6 points of share is worth R11.3m in FY2031
Partner failure or acquisition	A vendor acquired by a competitor could terminate at renewal	Merchant contracts survive the partner agreement; the relationship degrades to direct servicing rather than ending

The channel is what makes the acquisition economics work and it is simultaneously the largest structural dependency in the commercial model. Both statements are true and the plan does not resolve the tension — it prices it, at 18 per cent of net revenue on originated merchants, and contracts around the parts that can be contracted around.

Previous section4. Product, Technology and Security

Next section6. SWOT and Competitive Position