This taken from a research report a few months ago, highlights the forward potential of the RKN investment which apart from the dividend, should add immense value going forward, i would expect uptake of NOV services to RKN customers to be fairly swift
As digital payment providers, all businesses require a payments company to settle their digital payment
transactions which is where Novatti holds the key to unlocking new growth opportunities for Reckon.
These businesses will typically pay ‘merchant fees’ to the payments company, normally around 1-2% of the
transaction value.
At present, Reckon does not offer merchant payment services which means those 106,000 small business
customers must pay their digital payment merchant fees to a third party, likely one of the major banks that
they do their banking with, or a non-bank payments company like Tyro (ASX: TYR). For the small business
operator, these fees are only a small fraction of their revenue where many will even on-charge the fees to
their customers.
However, when those small 1-2% fees are multiplied by the 106,000 business customers
that already use Reckon accounting software, it equates to millions of dollars worth of merchant
fees that may be of interest to Novatti
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