While international people flow stagnated over the past two years in response to the pandemic. Opening of borders, though, has seen a big uplift of arrivals in Australia which is being reflected in demand for digital payments from Novatti Group (ASX: NOV) which reported a 105% increase in transaction values processed from its cross border payments business, ChinaPayments. 

ChinaPayments is just one service within Novatti’s broader digital payment services which also include merchant acquiring, card issuing and alternative payments. The strong performance from ChinaPayments comes as little surprise though given the landmark edict declared in China where the Government will not recognise university degrees that have been obtained via remote learning. It quickly prompted a huge influx of international students back to Australian campuses, many of which utilise ChinaPayments to pay their tuition, accommodation and utility bills using their local currency (RMB) while service providers receive Australian Dollars. 

For Novatti, the increased people flow contributed to the Company generating $9.2m in sales revenue across the March FY23 quarter which also saw a Quarterly GTV (Gross Transaction Volume) up 56% compared to previous corresponding quarter with Novatti Managing Director Peter Cook confident of that number increasing in the coming months. 

“The volume of work across Novatti’s overall business continues to increase,” said Cook. 

“Novatti’s quarterly GTV processed grew 3% on the prior quarter and 56% year-on-year to $1.04b. The strongly qualified sales pipeline across the group is circa $15m of new annualised business with a 70%+ confidence factor due for signing between now and the end of the next quarter.”

Demand for Novatti’s cross border payment services is set to continue rising with migration being one of the hottest topics being addressed by the Government. Speaking at the National Press Club yesterday, Home Affairs Minister Clare O’Neil forewarned changes in migration policy to address skyrocketing demand to study, work and live in Australia. 

Core to upcoming changes are the 350,000 migrants that are now forecast to have arrived in FY23. That number is 49% higher than the 235,000 forecast by the Treasury in October 2022. 

To address the spiralling numbers, O’Neil confirmed that the Government will lift the wage floor for temporary skilled migrants from $53,900 to $70,000, from July onwards.  

The policy is aimed to reduce the hiring of migrants by Australian businesses, however for the opportunity to earn a minimum of $70k per annum in Australia, the country will become even more attractive to foreign workers and international students. 

For those that arrive to work or stay beyond their studies, the higher wage and opportunities will flow down to payment service providers like Novatti which also owns a 91% stake in the International Bank of Australia – a specialist digital bank launched to service migrant banking needs. This increased intake should also result in an increased demand for cross border payments to family back home.