Chinese giant PAX makes push for foothold in local payments market

Chinese payments giant PAX is preparing to push into the Australian market after taking over its local agent, aiming to woo big clients with a security-focused pitch.

Michael Johnson, the chief executive for Australian operations for Chinese payments tech company PAX.

Chinese payments giant PAX, which faced raids by the FBI in the US, is preparing to push into the Australian market after taking over its local agent, and industry figures note it appears the firm is focused on wooing big clients with a security-focused pitch.

PAX, headquartered in the Chinese city Shenzhen and listed on the Hong Kong Stock Exchange, is one of the world’s largest manufacturers of point of sale payment products.

In August 2024 the group acquired its local agent, most recently appointing payments industry figure Michael Johnson to head up the division as it makes a push for business across Australia and New Zealand.

Mr Johnson, who boasts more than 20 years in the sector, said the Chinese payments player had a slim operation in Australia, with just 15 staff, but already had more than 100,000 devices in circulation across the market.

One payments industry figure noted this likely put PAX ahead of payments rival Tyro, which last confirmed 73,000 customers.

Mr Johnson said PAX had acquired the local business, previously held and headed up by Nigel Lovell and Debra Taylor, given the potential to grow its Australian operation. This was the latest in a string of acquisitions by PAX, picking up the ownership of its local distribution partners.

“It’s exciting for us given where we are with our market share and our capabilities,” Mr Johnson said.

PAX is pitching for business with major and regional banks, and Mr Johnson noted the company was already in negotiations.

The group also is targeting the transport sector, with PAX terminals already in use at Queensland Rail, A2B cabs, and airline Virgin.

PAX heavily emphasised its security credentials as part of its Australian pivot, installing a hardware security module in Sydney aimed at firewalling its local systems and client data.

The HSM was aimed at instilling “confidence in our customers operating in Australia and the region that their data remains safely within Australia”, Mr Johnson said. “The primary purpose is to safeguard our customer’s cryptographic keys and ensure they are not vulnerable to theft and unauthorised access.”

But PAX has faced scandal over its data integrity after FBI agents raided three of the firm’s facilities in Florida in 2021, triggering a move by some customers to dump its terminals over security concerns.

FBI agents entering PAX Technology offices in Jacksonville in 2021. Picture: WOKV.com

PAX rejected suggestions its devices were used as a “malware dropper” and “command-and-control” locations for staging cyber attacks and collecting information.

Mr Johnson said he couldn’t comment on the FBI raids but pointed to the HSM investments in Australia and work with industry body Australian Payments Network to implement advanced encryption standards.

Industry operators noted the HSM investments, while fairly standard practice, showed PAX clearly was mindful of perceptions of the business in the wake of the FBI raids, which resulted in the company’s share price collapsing.

Chinese tech players have faced scrutiny over their devices, including telecommunications firm Huawei which was banned from Australia’s networks.

Late in 2024 the FBI said it had taken control of 260,000 internet-connected cameras, routers and devices allegedly being used by the Chinese government to spy on sensitive organisations.

Separately, the payments sector is facing the spectre of intervention amid a review of card surcharging. The Labor Party has pledged to bin debit transaction costs. Mr Johnson said PAX didn’t take a view on surcharging but was closely monitoring the Reserve Bank of Australia’s review of cost of acceptance.

“Our positioning is to make sure our solutions can adopt and implement seamlessly any changes if they are to come in and are required,” he said. “I will support whatever the decisions are and ensure we can support our customers and merchants.”