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Alphyra in Europe card launch to boost funds

The company, which is headed by John Nagle, last week launched a disposable credit voucher in Ireland, in conjunction with Permanent TSB. A spokesman for the bank said that more than 500 people registered for the cards in the first working day a rate of about one registration a minute.

The three partners in the venture are the bank, Alphyra and 3V Transaction Services, a company in which Alphyra is the major shareholder. It is understood the companies plan to gradually introduce the cards into the 19 countries in which Alphyra operates. The joint venture will make use of Permanent TSB's relationship with Visa Europe and Alphyra's network of 150,000 payment terminals. The companies have not disclosed the breakdown of revenue from the new cards, but the relationship is likely to significantly benefit Alphyra.

The company recently appointed advisers and is likely to be sold or floated, possibly before the end of the year. It is understood that it had planned to float on the London Stock Exchange next month, but pulled back from that option after several potential buyers emerged.

Industry sources said a trade sale could value Alphyra which was taken private by its management for €88 million in 2003 at more than €700million. The main beneficiary from a deal would be Benchmark Capital, which owns about 70 per cent of the firm.

Alphyra's management own the remainder and would net more than €200 million from a €700million sale. The majority of that would go to Nagle, who founded the firm and has expanded it through a combination of acquisitions and organic growth. Earlier this year, he told The Sunday Business Post that he planned to transform Alphyra into a major financial services player by targeting the 'unbanked', such as students and teenagers. The credit vouchers are part of that strategy.

'There is massive latent demand for financial services from people who do not have bank accounts,' Nagle said at the time. 'What we are doing is putting a card into their hands. Our next move is into the provision of financial services for the unbanked.'

The company is also expected to launch a money transfer service that will use its payment network and relationships with mobile operators to compete with established firms such as Western Union. First Data Corporation, the parent firm of Western Union, is understood to be among the firms that are interested in buying Alphyra.

It is understood that Nagle would stay on at Alphyra even if it changed hands.