“Cash or card?” Just like millions of Aussies who opted to “bring their phone and no more” on a daily basis, you’ve probably lost count of how much you have tapped your phone or card.

According to the Australian Banking Association (ABA), Australia’s shift to digital banking is accelerating, with the number of people leaving home without their wallet or cards, relying on their digital wallet, doubling in three years from 19% in 2019 to 38% in 2022. 50% of smartphone users also say they have used their mobile phone to make a purchase in-store, in-app or on a website, an increase from 18% in 2019. 

The ABA data reiterated RBA data that shows Australia’s rapid transition towards becoming a cashless society, with Australians averaging 650 electronic transactions per year compared to 300 per year a decade earlier

The Global Payments Report 2023 further added that digital wallet apps will overtake credit and debit cards to become the leading eCommerce payment method by 2024. 

With digital payments volumes forecast to hit $269.8 billion by 2027, many contenders within the Australian fintech space are delivering digital payment products to meet the demand.

Novatti (ASX: NOV) is among the fastest rising providers in the field. It offers an encompassing payments ecosystem that enables customers and businesses to pay and be paid anywhere, any time. Having been awarded a Principal Issuer Licence by VISA in 2019, Novatti has been able to issue both physical and digital VISA cards that are commonly used in stores and to purchase goods online without the need to link the payments to a personal bank account. The licence enabled Novatti to add card issuing to its suite of digital payment products which is popular amongst enterprise clients that utilise the service for Novatti to issue cards to their customers or staff for digital use. Even Afterpay engaged Novatti’s issuing services in 2021.  

Novatti offers digital payment products for both sides of any digital payment. For each person that makes a ‘tap’ payment from their smartphone, the merchant must also accept the payment where they may be serviced by Novatti’s acquiring business. 

Novatti’s acquiring division facilitates business owners with a seamless omni-channel experience that consolidates online, face-to-face and in-app payments into one centralised system. They can select a mix of traditional payment methods including credit cards and direct debits as well as alternate payments such as Alipay and WeChat Pay, a trend that CEO Peter Cook expects to accelerate even further as more Australians adopt digital wallets. 

“Most of us generally don’t carry cash. Our society is increasingly reliant on making payments in a digital form and going cashless,” said Cook. 

“Those tailwinds are a perfect theme for us to grow our business and become a sustainable long-term player.” 

Novatti’s future growth engines in Acquiring and Issuing continue to receive strong demand as highlighted in its March FY23 quarter result. These businesses achieved revenue growth in the quarter of 70% and 67% respectively, which contributed to a total of $9.2m in quarterly sales revenue. Novatti’s quarterly Gross Transaction Value (GTV) was up 56% YoY, hitting $1.04 billion for the quarter. 

Revenue is likely to again be on the rise in the coming months with Cook confirming that Novatti has a strong upcoming sales pipeline. 

“In general sales terms, we have had some very significant wins across all divisions,” said Cook. 

“A lot of that goes back to the strategy of having multiple services, in some cases to do cross-selling to be able to bring customers on who are trying to lift up their business or go through a digital transformation for their payments. A key strength is that we can do all that. 

“We have a very strong $15m near term sales funnel, with a 70% degree of confidence to sign up by the end of September. Most of that business becomes semi-recurring in nature. 

“The value in payments businesses is that as you sign clients on, they build for that back book of business that you’ve got and your base of business becomes larger.”