Valitor was founded in 1983 and is a payment solutions company which provides its customers with diverse services in the field of acquiring, gateway and point of sale services and issuing. The company’s headquarters are in Iceland but it also has operations in the United Kingdom and provides services in 28 different countries.

Business segments

Valitor is an acquirer for Visa, MasterCard and AMEX and provides payments services directly to merchants in Iceland and the United Kingdom as well as to international payment partners who in turn service merchants throughout Europe.

Issuing Solutions provide Visa issuing services to Icelandic banks. Valitor however still provides issuing services to a few international partners but the company is discontinuing international services in this field outside of Iceland and will instead focus on offering processing services in Europe.

A transitional year

Several important milestones were reached in the transformation of the company following extensive restructuring initiated at the beginning of 2020. The company’s financial structure was strengthened with the conversion of loans to equity in March. At the end of 2019, three new directors were brought into the board of directors. At the same time wide-ranging measures were taken to strengthen the business for the future. The company made certain shifts in focus which were designed to consolidate its core business. Valitor had been unprofitable since 2014, except for the positive one-off effect of the sale of the company’s shares in Visa Europe in 2016, and it was obvious that this situation could not continue.

Herdís Dröfn Fjeldsted was appointed CEO of the company at the end of March 2020, after having been chairman of the board of directors since October 2019.

To make the business more efficient key steps were taken to unify the gateway structure for acquiring services. The product range was simplified and Valitor’s acquiring business in Iceland and the UK now offer the same payment solutions for both terminals and ecommerce payments.

The main emphasis in Valitor´s general strategy for 2021-2023 will be standardization, simplification and efficiency along with building a strong partnership model on the acquiring side. With appropriate strategic initiatives and actions, the result will be operational cost reductions, a focused off-the shelf product offering and a positive effect on the profitability of the company.

  • Strengthen Valitor’s core operations and thereby play to the company’s strengths with the aim of adding value and increasing benefits for partners and customers

  • Acquiring services will continue to be offered to SMBs directly in Iceland and the UK as well as building a strong partnerships model throughout Europe. The business will be united under a single and standardized product offering with distinct go-to-market approaches

  • Within Issuing Valitor will continue to offer an established issuing platform and strive to provide continuous quality in customer service founded on extensive knowledge and experience on the market

Operations and financial performance

The numerous challenges presented by COVID-19 as well as the extensive restructuring changes and measures taken to improve the company’s financial standing set the tone for 2020.

Despite the challenges in the external environment, Valitor made a positive turnaround in operations. Net loss from regular operations was ISK 1.5 billion and has improved by ISK 8 billion between years where the loss in 2019 was ISK 9.5 billion. EBITDA have also trended upwards and if not accounting for one-off expense the improvement between years is over ISK 5 billion.

The COVID-19 pandemic has severely depressed revenues and earlier targets on turning around operations are expected to take longer than originally forecasted.

The company’s omni-channel business in Denmark was sold in May and related operations in the UK were sold at the beginning of June. The sale was a vital step towards the turnaround in the company’s financial performance. The omni-channel solutions nevertheless had a negative impact on the company’s cash flow in the first half of the year. This decision represents a huge step forward even though the company is still beset by numerus challenges and uncertainty.

Issuing Solutions performed decently in difficult conditions as the COVID-19 pandemic had a negative impact on revenues from issuing due to the massive decline in the use of payments cards abroad.

Acquiring services in Iceland have been showing signs of recovery, with more customers coming on board and results improving. As a consequence of the COVID-19 pandemic business practices have been evolving in the retail and catering sectors, and these changes have been responded to with innovative new products, particularly in e-commerce and in contactless payment solutions.

Partnerships with payments processors abroad have gone from strength to strength, with a growing client base and new partners coming on board at the beginning of 2021.

Valitor and society

The company had 330 employees at the beginning of the year, decreasing to 214 at year-end in Iceland and the United Kingdom.

There was a strong focus on equality during the year and at year-end the gender ratio was more evenly balanced than at any time, with 53% of employees being men and 47% women. The company’s executive management now has three women and four men. During the year Valitor was recognized by the Equality Balance initiative and has had equal pay certification since 2019.

The shift in focus and reduction in the number of employees meant that the company’s headquarters in Hafnarfjörður were downscaled from 4,400 m2 to 2,200 m2. As a result more efficient use is made of the company’s premises, and all employees will now work in open office spaces.

In 2020 Valitor adopted a new remote work policy. One of its aims is to reduce the amount of pollution by having fewer people travel to and from work, and to cut down on the number of unnecessary business trips abroad.

Valitor endeavors to lead by example on environmental issues. The objective is to minimize the negative environmental impact of the business by nurturing sustainability in both internal and external activities. Valitor has been a signatory to City of Reykjavík and Festa’s Declaration on Climate Change since November 2015. Since 2017 Valitor has methodically worked on reducing the company’s carbon footprint and entered a partnership with Klappir Green Solutions in order to better map its ecological footprint.

It is important to Valitor that its employees are able to identify with and support the company’s values. Valitor has three core values: trust, collaboration, and excellence. The most valuable assets of a financial institution are trust and integrity, values upheld by all its employees. This is how Valitor wishes to operate.