Card payments in South Africa impacted by global chip shortage
South African financial technology group Araxi said its annual performance was negatively affected by the global microchip shortage, which delayed a major delivery of its card machine payment terminals.
Earnings before tax (EBITDA) for the company, which owns payment processor Pay@, declined 16.4% to R279.3 million in the year marked by significant business restructuring.
Araxi (formerly Capital Appreciation) published its financial results for the year ended 31 March 2026, noting a year marked by significant costs related to ongoing changes at the company.
Alongside the drop in reported earnings, the company indicated that headline earnings per share, a measure of overall profitability, declined by 18.2% year on year.
In the 2026 financial year, Araxi said headline earnings declined to 14.37 cents per share, compared to 17.57 cents per share in 2025.
Araxi still reported that it managed to get 447,000 card payment terminals into customers’ hands in the year, noting a 5.4% increase in the number of terminals delivered.
This was achieved despite the shock of global microchip shortages, driven by an over-demand for manufacturing capacity to produce high-end memory and other chips for AI data centres.
The year was also notable for Araxi as it engaged in widespread restructuring across its business, including the finalisation of the R1 billion acquisition of Pay@.
During the year, Araxi recorded a once-off restructuring cost of R10 million in its software division, as well as early transaction costs of R8.8 million related to its Pay@ transaction.
To separate the impact of these fees, the company also reported its underlying results to give investors a clearer picture of the core business’s performance amid the restructuring.
Underlying indicators paint a picture of a healthier business, with underlying EBITDA increasing 5.9% year-on-year from R267.3 million to R283.2 million.
The software business saw increased traction, with underlying EBITDA up 77%, and Araxi said it saw encouraging pipeline development across both the payment and software divisions.
“Recurring Revenue in Payments increased significantly, and the software division’s H2’26 performance showed marked improvements, pointing to a meaningfully more positive trajectory,” it said.
“Costs were well managed, and there was solid execution against the Group’s strategic objectives.”
However, the missed delivery of the terminal order is called “substantial” due to chip shortages, and a R10 million payment of a five-year banking software licence fee impacted profits.
Helping Apple launch Tap to Pay in South Africa
Araxi’s outlook for the 2027 financial year is brighter, with cautious optimism for future results amid increased clientele, said Group CEO Bradley Sacks.
“We are excited about the prospects that arise from the acquisition of Pay@ and remain cautiously optimistic that these trends and opportunities will support the Group’s growth,” he said.
In the year, the software division generated R384 million in contracted sales, including to several large banks and premier insurance companies, the company said.
“Clients are increasingly open to engaging in specialised projects, with particularly strong demand for cloud migration and intelligent data solutions,” the company said in a press release.
“Other projects include agentic AI, fraud detection, and payment modernisation initiatives. By the end of the year, the Division saw a significant increase in demand and project closures for FY’27.”
Araxi also revealed that its Halo Dot financial technology was an Apple Gateway Service Provider (GSP) for the launch of Apple’s Tap to Pay on iPhone in South Africa.
Apple launched Tap to Pay in South Africa in collaboration with local fintech Yoco and iStore Pay, the payment software of local Apple Premium Reseller, Core Group.
The platform allowed businesses in South Africa to accept card payments directly on their iPhones, no terminals or additional payment hardware required.
Araxi indicated that Halo Dot was used by a “major retailer” to help Apple launch the payment service in South Africa in May.
It said that Apple has approved Halo Dot to enable the launch of Tap to Pay on iPhone solutions in other markets.
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