General Discussion, page-18

Here we go - clown season must be in full swing LOL
So we raised $60mil, spent $21mil to buy IDSB, lost $7mil to "fraud", $42mil spent on BNPL for IOU to now say it was not about BNPL

Now IOU thinks it can imitate IDSB's business model where IOU just originates the loans without taking on any capital risk.
If such a lucrative business model exists, one can be assured it wouldn't be IOU that gets to profit from it imo.

Highlights

• IOUpay, an ASX-listed fintech service provider operating in South East Asia, has described its future pathway
• myIOU BNPL app is inviting new users to register for its services and to also apply for elevated credit limits (Credit+)
• The investment in iDestinasi Sdn Bhd (IDSB), a leading Malaysian finance company, is expected to provide significant growth opportunities
• In future, IOUpay’s lending business will resemble the IDSB model, acting as an originator and servicer of financial products rather than risking its own capital

ASX-listed financial technology (fintech) company IOUpay Limited (ASX: IOU) -- with nearly twenty years’ experience in the digital commerce market of South East Asia -- has announced the beginning of a new chapter in its operations. After a brief pause, the myIOU BNPL service of the company has been resumed in Malaysia, IOUpay's primary market, with an emphasis on improved credit quality and focus on profitable merchants.

The company has informed all stakeholders about this decision -- a brief pause was announced on 22 March 2023 -- and the “modified version” of the company’s myIOU BNPL service has introduced changes consistent with the Company’s measured approach to growth.

Focus

The company's 28 March 2023 announcement describes a clear pathway, with focus primarily on "existing profitable merchant customers”. Against this backdrop, IOUpay has also listed some of the latest developments.

Firstly, IOUpay has changed its approval process for new and existing users who have yet to make their first transaction with myIOU, requiring applications to be made under its terms for myIOU Credit+ with approvals to be provided within two weeks. The stricter credit process requires additional documentation (including income, credit card statement and proof of address) which is expected to further improve the credit quality of the myIOU BNPL portfolio.

Secondly, the available payment plans will include two and three payment options. The six payment plan is no longer available. This should reduce the average term of the loan portfolio and increase the frequency that capital is recycled.

Thirdly, the number of available merchants has been reviewed with a strict focus on profitability, the company has asserted. Information pertaining to available merchants with the myIOU facility is already uploaded on the company's official website.

Lastly, the company is also inviting new users to register and apply for elevated credit limits (Credit+) up to approximately A$3,300.

IOUpay's overview

The listed entity has been operating in fintech and digital commerce software services in the rapidly growing and lucrative market of South East Asia. Primarily, it provides an ecosystem for banks and merchants to connect seamlessly with their customers. This is facilitated through myIOU's smart technology platforms, with support for secure digital transfers, and messaging and authentication services. IOUpay has summed up its business focus as “Digital Payments in Southeast Asia”.

Notably, this was the title of IOUpay's investor presentation released in March 2021. The presentation highlighted the sizeable South East Asian market and demonstrated opportunities that the company's fintech products can seize.

BNPL

The company describes its buy now, pay later offering as a bridge that connects merchants and customers. The consumer app -- seeded with the BNPL platform -- was launched by the company by injecting its own cash to provide short-term credit services to a wide community of customers. The brand has gained popularity in the target South East Asian market, IOUpay mentions, with establishment and early growth facilitated by significant investments in marketing and customer service support.

Beyond BNPL

IOUpay asserts that the BNPL service is not the company’s only product or focus. A capital raising event in February 2021 was conducted to drive IOUpay's expansion in the Malaysian and South East Asian markets and other strategic initiatives. One of the initiatives has been the investment in iDestinasi Sdn Bhd (IDSB), which is among Malaysia’s largest finance companies. IDSB is a specialist outsourcing agent providing services, including in-field origination, execution and settlement of loans, to banks. IDSB generates both upfront and ongoing fee income for originating and managing loans without taking borrower credit risk or applying its own capital.

Notably, IDSB has a high-quality customer portfolio comprising civil servants in Malaysia. Interestingly, IDSB, which has a "strongly profitable business", deducts loan repayments of borrowers directly at the paymaster source, thanks to its Accountant General Salary Deduction Code (renewal is expected by the end of next month), the company update indicates. This is said to provide IDSB with a significant competitive advantage over other lenders in the Malaysian consumer finance market who might seek to target civil servant customers.

IOUpay states that its payment platform - which is already being used by many large financial institutions and telcos -- would support IDSB in its future scaling endeavours, particularly in the upgrading of its IT system so that it can duly meet the requirements of its partner banks.

Mobile Banking

IOUpay mentions that its mobile banking vertical -- with its technology platform being used by over 20 large-scale financial institutions and telcos for bill payments, authentication, and other services -- has hit record transaction volumes over the past months. There are also discussions underway with significant new partners for the division.

The future path could include a wholesale BNPL offering. IOUpay says that the company envisions to act as an "originator and servicer of loans and other financial products". Similar to IDSB, IOUpay would refrain from using own cash for its loan products, the latest ASX announcement of the company asserts.