CAB Payments turns to New York to revive fortunes
The London fintech behind the “worst IPO of the year” in 2023 is seeking to revive its fortunes with an expansion to New York after it secured a licence to operate in the US.
CAB Payments told markets on Wednesday that it has received approvals from the Federal Reserve and The New York State Department to operate a representative office in New York, via its subsidiary, Crown Agents Bank.
The Southwark-based business, which offers cross-border foreign exchange services, said the New York office will act as a regional business hub to drive new client business in the region, as well as helping strengthen relationships with US Dollar clearing partners and to further support payment flows from clients in South America.
It follows an expansion into the European Union after CAB obtained a payment service provider licence from the Dutch financial authorities, allowing it to operate across the European Economic Area.
CAB Payments CEO Neeraj Kapur told Morning Wire: “A very large majority of our business is US dollars…so there’s no doubt that in terms of its presence within our business it is extremely material.
“Being there will open up more doors for us…and I think it’s appreciated that we have taken the step to be in their jurisdiction.
“We’re not people that come in and out of territories, because we’re there for a very strong strategic reason that isn’t going to go away until we see the wholesale removal of the US dollar as a reserve currency.”
‘Execution is key’
Kapur said Abu Dhabi was another city the company was looking at expanding into “because the Middle East is playing a massive role in providing capital into emerging markets now.
CAB Payments rose 6.4 per cent to 43.9p following the announcement – but the stock remains down by more than a third since the start of the year and has sunk around 85 per cent since its 2023 IPO.
Neil Wilson, UK investor strategist at Saxo, said CAB’s move into the US marks a “major move into region and expands its FX footprint by staking a claim in USD payment networks and establishing relationships with USD clearing businesses.”
“But as ever the key is that it needs to execute on this opportunity,” Wilson said.
“Shares have not really done anything positive for the last year since the news about its EU licence…that development last April baked in a lot of hope and expectation but investors were left disappointed and would be nursing heavy losses if they’d bought in on that hope.”