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Originally posted by Heyza:
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As a follow up to the latest Analyst Report on Novatti Group (ASX: NOV), I thought you might be interested in news around one of their major partners - Marqeta.12 months ago, Marqeta selected Novatti as the domestic partner for their launch in Australia. At the time, Marqeta was primarily operating in the United States but was already the digital payments provider for the likes of Uber, DoorDash and Square. International expansion has long been on their agenda and it will be funded by their recent IPO in the US where they successfully listed on the NASDAQ on June 9, now trading publicly with a market cap of USD $16 billion. Novatti CEO Peter Cook has been meeting with Fund Managers over the past fortnight since the release of their latest investor presentation, and the question keeps being asked - why is this multibillion dollar company using Novatti as the domestic partner when they can just do it themselves? His response has been the same when asked why Afterpay chose to partner with Novatti for their New Zealand launch - these large corporations simply do not have the regulatory capacity to enter new markets without engaging partners that have long standing relationships with regulators. In these instances, Novatti is that partner thanks to an excellent track record of regulatory compliance with industry-leading technology (regtech). While Novatti has not disclosed its exact fee structure as Marqeta’s domestic partner, we’re expecting more activity in the space soon with Marqeta confirming their expansion into Asia-Pacific. Interestingly, their HQ for the entire APAC region will be in Melbourne, the same as Novatti. Novatti’s banking license (required to launch their neobank) was also a recurring topic of conversation and Peter confirmed they are in continuous discussions with APRA in regards to the license which is being processed. The neobank space is heating up in Australia again, which was one reason Judo Bank was meeting with ASX brokers last month. Judo's potential IPO likely to value them over $3 billion and attract plenty of attention to investing in neobanks. At present, Novatti remains the only ASX-listed company with exposure to neobanking where they secured an $18m commitment last month from a global lender for the launch of their planned neobank.
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It’s looking more and more likely in my humble view that Marqueta will use the Nov banking license for routing payments And give Nov a fee. They want to avoid the banks and current routing networks and scoop up the fees themselves, at a lower rate of course, due to not having expensive legacy payments systems. The banking license will give Nov the opportunity to facilitate this process.
