NOV

3.85%

5.0¢ novatti group limited

Ann: RKN: Reckon and Novatti - Payment Solutions, page-12

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16/05/22

13:37

Post #: 61432175
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Originally posted by mockage: ↑

This is really interesting - it seems that both Reckon and Novatti can clearly see the opportunity and have moved swiftly to capitalise on it.

114,000 small to medium businesses. And let's say conservatively 5-10% turn on the "Pay now" function over the next 24 months. Only Reckon will have a good feeling for this - obviously retail shops, for example, will have a low attraction to "Pay now" but many tradies, designers, sole traders etc will find this attractive as saves chasing invoices.

So assume an average small business that has invested in (affordable = Reckon) accounting software is a sole trader + 1-2 helpers, with turnover of say $10k (low) to $50k (high) per month + GST (labour + materials etc). I am thinking say a small design company at the low end, and a sole trader electrician + apprentices at the higher end.

This gives a volume through 'Pay now' of:
Low end : 5% x 144,000 x $10k x 12 = $864 million transaction volume
High end : 10% x 144,000 x $50k x 12 = $8.6 billion transaction volume

1.5% processing fee (to be split 50/50 between Reckon and Novatti) is therefore a wide range of:
Low end: $13 million (50% share = $6.5 million)
High end: $130 million (50% share = $65 million)

I would guess that the true figure will be somewhere between the two. But even at the low end - this outcome would more than double their existing processing revenue.

So the deal sits somewhere between 'very helpful' and 'transformational'.

Expand

I use Xero to run my business they partner with similar PAY NOW services, really easy to connect in Xero, they offer credit card instant payments the partner XERO uses is stripe. NOV are seeking a similar service with Reckon.

The invoice generated out of the system looks liek the following

When a client chooses to pay via credit card the transactions are automatically reconciled and all I do is press one button as it matches the payment to the invoice we send thats generated out of Xero so seamless and we get paid quicker.

Hopfully that offers some more clarity for the reason the Reckon partnership is quite valuable.

NOV Price at posting: 20.0¢ Sentiment: Buy Disclosure: Held
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Ann: RKN: Reckon and Novatti - Payment Solutions, page-12

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Ann: RKN: Reckon and Novatti - Payment Solutions, page-12

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