The following is from recent correspondence with Emerald Finance and I post here after receiving express permission to do so from them. ……………….
I appreciate that Nov management have made great progress putting all the licences, technology and partners in place over the past few years. The last 12 months have been at a cracking pace. Bank licence, stablecpin, more tech and security partnerships, etc. So congratulation to the team.
I also applaud the fact that the company is cashed up in a more difficult financial market. Also that transaction volume has increased dramatically.
However, I would have like to have heard more about:
1. Current state of EU licence application.
A. This application is still pending. There has been no material change in the application and EU-based operations are still proceeding as planned where customers can open accounts with Verv as part of the Novatti ecosystem. The licence application situation is similar to IBOA’s banking licence application in Australia where we are in the hands of regulators. In Europe, one regulator oversees a much larger territory and there is no definitive timeline set by the regulator.
2. Current state of Singapore money licence application.
A. Same as EU.
3. An update on Emersions activities in the US.
A. Emersion is live in the United States with a sales team on the ground with customers signed up for billing services already. Getting off the ground there took a bit longer than Novatti had planned due to travel restrictions during the pandemic, which made staffing more difficult, but the business is live and generating revenue from the US. We are continuing to build out our ecosystem of software integrations and partnerships which is needed in parallel with our sales operations.
4. More detail about the Reckon customer payment platform.
A. The partnership with Reckon enables Reckon customers to access merchant services from Novatti’s Acquiring division. This is where a small business, for example, wants to accept online payments via a debit or credit card. By signing up with Novatti for these services, the customer can utilise Novatti’s licences and technology to accept a face-to-face payment at the counter, or enter the 16-numbers on the card into an online payment gateway operated by Novatti (but white-labelled for that business). It will benefit Reckon’s customers by accessing competitive merchant fees and a seamless customer experience, while revenue on merchant fees via this partnership are also shared between Novatti and Reckon.As you may have seen, the gross transaction value of Novatti’s Acquiring business increased 13-fold over the past 12 months while the partnership with Reckon was formalised in April 2022 with customers that were referred to Novatti included in that $54m GTV.
5. Are management still looking at more JV’s/partnerships with other?
A. Yes. The Novatti digital payments ecosystem is in its scaling phase. With the hard work put into securing the relevant licences we have to date, we are regularly seeking to increase transaction flow. The recent $1 billion in quarterly GTV was a big deal internally, even if the market did not share our enthusiasm.
6. Are there any more patents pending?
A. Yes, there is a one pending for PayXCrypto which relates to backend tech for facilitation of transactions between fiat and crypto. Kian Jackson, GM of Acquiring, referenced it in this recent blog post about Acquiring’s expansion in New Zealand: https://novatti.com/novatti-secures-merchant-acquiring-licence-in-new-zealand/
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Patience …. Cheers Anton
NOV Price at posting:
14.5¢ Sentiment: Hold Disclosure: Held
