This week marks the first week of university orientation in major universities across Australia. Among these new students experiencing first day jitters and excitement are more than 40,000 Chinese students who have touched down on Australian soil. Observing opportunities to facilitate and simplify the way these students contribute to the Australian economy, digital payments specialist Novatti Group (ASX: NOV) has equally seen a surge in transaction volumes in line with student arrivals.
Following a surprise edict from the China Ministry of Education declaring that international university degrees obtained by remote learning will not be recognised, international students that had become accustomed to remote learning quickly booked their tickets back to Australia. This also meant that along with paying their tuition fees for on-campus learning, they had to seek accommodation and set up their phone, electricity and water accounts.
Facilitating all of this by enabling Chinese nationals to make digital RMB payments via popular electronic wallets such as Alipay, WeChat Pay or UnionPay with competitive foreign exchange rates is Novatti through their ChinaPayments business. Recipients in Australia such as Universities, housing providers and utility companies are then paid in Australian Dollars.
In an email to Novatti shareholders, CEO Peter Cook confirmed that ChinaPayments observed an increase in Gross Transaction Volume (GTV) in the first 10 days of February, processing $3.88 million in GTV (unaudited). This was a 50% increase on the corresponding days in February 2022.
“This is exciting news for Novatti’s Cross Border Payments business which enables people to make payments in and out of Australia,” said Cook.
“Digital payment products within this division are well established and highly scalable having built the underlying payments network that facilitate cross border payments, backed by Novatti’s focus on technology, operations and processes to meet Australia’s high governance and compliance standards.”
Although the $3.88m GTV in 10 days for ChinaPayments is a boost, it is just a small fraction of the broader Novatti ecosystem which last month confirmed had processed more than $1 billion GTV in the quarter.
Australia’s net migration is now forecast to exceed 300,000 arrivals in 2023, a 25% increase on previous Treasury forecasts. While China forms a large portion of the migration, especially in the education segment, Novatti has intentions to scale the ChinaPayments technology into other countries in 2023. Doing so will leverage the existing partnerships Novatti has in the education sector and provide the same seamless customer experience that is valued by ChinaPayments customers.
Novatti plans to expand the ChinaPayments model under a Novatti BillPay offering into other international wallets and currencies for payments from Indonesia, Philippines, South Korea, Thailand and Malaysia. Novatti already has a strong presence in Southeast Asia after acquiring Malaysia-based fintech ATX 2021, giving confidence that the Novatti BillPay can acquire a larger portion of the non-China markets. The region also makes an ideal market with many of them historically functioning as cash economies but are now transitioning to digital payments via accessibility supported by the likes of Novatti.
As part of Novatti’s agenda to launch Novatti BillPay, they will also continue to work closely with its Alipay, WeChat Pay and UnionPay partners to boost awareness amongst businesses who can offer this payment option alongside students and the benefits that local service providers can gain by accepting payments through these channels to receive funds faster and access the broader Novatti digital payments ecosystem.
Clara is a Business Reporter for The Sentiment.
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