A wave of tourists from China is expected to land on Australian shores in the coming months as tour groups return for the first time since before the pandemic.
Chinese tour groups contributed $581 million to the Australian economy in 2019, providing a great opportunity for digital payments company Novatti Group (ASX: NOV), which has a strong foothold on the cross-border payments space between Australia and China.
Novatti has positioned itself as a preferred partner for Chinese migrant and tourism agencies. Within their suite of digital payment products, Novatti offers a range of payment processing services, including payment acceptance, digital wallets and bill payments, which cater to the specific needs of Chinese tourists and migrants. Importantly, these services all allow tourists to make their payments in their local RMB currency, while Australian vendors receive AUD, a feature that Novatti CEO Mark Healy is seeing strong support behind.
“Our China-oriented businesses have seen an increase in activity in the first few months of FY24 with Gross Transaction Value up approximately 67% from these digital payment services that cater for Chinese wallets,” said Healy.
“It’s a segment that Novatti has a strong presence in and will continue to service through our network of migration, tourism and education agencies by providing digital wallet integrations that ensure customers can seamlessly transact with Australian Dollars without the hassle of exchanging cash.”
Novatti’s innovative cross border payment services contributed to the Company processing $4.2 billion in Gross Transaction Value (GTV) in FY23, a 46% increase on the previous year.
Tourism Minister Don Farrell expressed optimism about the returning tour groups, stating, “China is terrifically important to our tourism sector.” He anticipates that travel from China is expected to rebound by Christmas. Notably, there has already been a 111% increase in short-term arrivals from China in July this year, making China the second-largest source of international arrivals after New Zealand.
The Approved Destination Status (ADS) visitor visa, which allows Chinese tourists from select regions to travel to Australia in guided groups, plays a crucial role in attracting Chinese tourists to Australia without the need for them to organise all their individual travel bookings. Due to language barriers, the convenience of tour groups is hugely popular amongst Chinese residents.
Rather than marketing their payment services to individual tourists, Novatti’s focus is partnering with travel agents to service all payment needs of the groups.
In FY23, Novatti reported $39 million in sales revenue, a 20% increase on the previous year.
Trading Desk Assistant at Emerald Financial
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