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Novatti well-placed to ‘monetise global partnerships’ in the wake of record Q4 revenue growth

Special Report: Following another strong quarterly update, NOV is positioned to leverage its unique competitive advantage in the global payments landscape.

Fintech payments company Novatti (ASX:NOV) is coming into 2021 with strong momentum, after a record revenue result in the December quarter.

The company booked revenues of $3.79m, a gain of 52 per cent from Q4 2019, and finished the year with $9m in the bank.

Speaking with * about the result, Novatti CEO Peter Cook said that with its robust cash balance, the company is positioned to invest in business development as it scales up.

That includes a strategic investment in the US expansion of its SaaS-based payments subsidiary Emersion, which is scheduled for the March quarter.

And the executive team has also made some key hires, including Kian Jackson – formerly the head of SecurePay at Australia Post – who will head up its merchant acquisition division.

With a client base spanning around 60 countries and ~$2.3bn of transactions processed annually, Cook said the focus is now on sustainable long-term growth.

“We’ve got serious revenues — we’re consistently growth that by around 50 per cent a year, and we think at some point the market will click onto that,” he said.

“Ultimately payments is a scale game, and we’re trying to get an increased share of wallet with our customers.”

And Cook said Novatti now has an opportunity to capitalise on a market-platform opportunity.

“Most of our business at the moment is B2B, and we have well over 100 fintech and banking clients,” he said.

“So it’s important that we leverage the strength of that ever-increasing payments network.”

Global partnerships

While Novatti’s client numbers and payments revenue continue to climb, Cook highlighted that those results are the by-product of some competitive advantages unique to the company.

The digitisation of global payments is a multi-billion-dollar market opportunity. But companies in the space need more than just those industry tailwinds to succeed.

For example, Novatti’s partnerships with global tech giants means its prepaid Visa card offering is now available on major platforms including Google Pay, Apple Pay and Samsung Pay.

And those partnerships are only available because Novatti has already obtained its Australian Financial Services Licence (AFSL) in the domestic market.

Cook added that the number of financial services companies in Australia that have approval to issue cards with global payments platforms is a small group, that includes the major banks.

More broadly, the company’s M&A strategy gives it an opportunity to drive sales with a multi-channel approach, leveraging Emersion’s SaaS platform for billing and invoicing.

“Since acquiring that business, we’ve lifted it from acquiring 1-2 clients a month to around 5 clients a month, looking to accelerate towards 8-10 clients a month,” Cook said.

“We’ve really been able to increase its growth rate by applying capital – we’ve more than doubled that growth rate and we’ve got an opportunity for more rapid growth by taking it into the US market.”

In summary, the company has laid the groundwork for a big year in 2021, with regulatory clearance and key partnerships already in place.

“For us it’s about leveraging our profile and regulatory position to do deals with tier one global payments companies,” Cook said.

“And what we expect to see is ongoing proof that Novatti can monetise those global partnerships.”