Just two weeks after taking the reins of digital payments company Novatti Group (ASX: NOV), CEO Mark Healy has fronted shareholders to outline his ambitious plans to drive the Melbourne-based fintech’s growth and show why more businesses will shift their digital payment needs to Novatti.
In the fast-paced world of payments where a simple tap of a card concludes a transaction within seconds, there is an intricate behind-the-scenes relay between financial institutions to ensure seamless transactions. At the heart of this system lies the merchant service provider, either a fintech, a bank, or both. While customers may only see the simplicity of their transactions, the role of fintech is crucial in ensuring the efficiency and security of the payment ecosystem.
As one of the emerging players within the digital payments industry, Novatti is the only Australian non-bank end-to-end payment solutions provider. On an investor call last week, Healy outlined his vision to position Novatti as a leader in the merchant acquiring sector where Novatti’s Acquiring division has taken major strides forward in the past 12 months while under Healy’s guidance as Executive General Manager of Payments, prior to his promotion to CEO.
Novatti’s core focus has been centred in supporting B2B companies to pay and be paid. The Company’s annual revenue currently sits at just over $39 million and Healy aims to grow that revenue top line at 20% year on year. Demand from customers has prompted Novatti to increase its presence in Australia at a favourable time as Aussie spending habits have trended towards digital commerce, a pandemic trend that has not slowed down.
Novatti takes a unique approach by enabling clients to utilise payments as a competitive advantage for growth and transformation, through a single interface for both in-store and online payments, supporting various payment methods to cater to consumer preferences at the point of sale.
A single interface simplifies the payment process for customers whilst streamlining operations for businesses. It eliminates the complexity of having to navigate multiple platforms and service providers.
Commenting on the achievements that Novatti has attained in FY23, Healy said “We see FY23 as a breakout year for the acquiring business. We’ve delivered 210% revenue growth with comparable growth in margins at 230%, both driven by 400% growth in our underlying processing volume.”
“Importantly, all new merchants are now on-boarded onto our new in-house platform, giving us both greater control and more importantly, a better customer experience. And we expect margin growth to continue to grow in FY24.”
Healy is also excited to work on enhancing online transaction security and anti-fraud measures, a value-add product that has seen established businesses move their acquiring services to Novatti. With cybersecurity and online fraud becoming increasingly sophisticated and headlining the media, many businesses lack the expertise and in-house analytics to effectively manage fraud. To address this, Novatti offers fraud and chargeback protection for merchants.
The payment acquiring market is a mature sector, yet it still has room for significant growth. According to Boston Consulting Group (BCG), payment revenues are projected to grow steadily over the next five to ten years, indicating a strong demand for digital transformation. Novatti anticipates substantial growth driven by the digital transformation agenda and various forms of digital payments, such as online, app-based, embedded, and mobile payments.
Regarding his vision for the future of the business as the new CEO, Healy firmly stated that he sees Novatti transitioning to be more market-led and customer-focused in line with driving constant growth in top line sales.
“Very importantly, strong growth in gross margin through greater focus on our integrated go-to-market approach, cross-selling, and evaluated services”, added Healy.
Novatti aims to maintain a relatively stable expense structure as an ASX-listed and highly regulated business. However, the Company remains committed to cost control and efficiency measures, including exploring automation opportunities.
Clara is a Business Reporter for The Sentiment.
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