If you’re looking to rent out a city apartment in the coming months, you could get a lot more rental income by waiting for the massive influx of international students set to arrive in Australia in the coming weeks.
The influx has been catalysed by a landmark edict declared in China where the Government will not recognise university degrees that have been obtained via remote learning. For those Chinese nationals that endured online lectures from Australian universities before stepping into the lounge room with a mum’s home cooked meal waiting for them, those days are over.
Instead, the Chinese international students must return to campus and embrace the international experience in full, rather than complete their degrees from the bedrooms.
For Australia, this is a big win for the local economy with more than 62,000 international students from China enrolled at Australian universities and TAFEs. Of those, only 3,500 arrived in Australia in January which means there’s plenty scrambling to secure their flights and accommodation.
International students contribute more than $40 billion per annum to the Australian economy. Preparing to facilitate many of these transactions are digital payments specialist, Novatti Group (ASX: NOV).
Prior to the pandemic, digital payment services for international students were a major revenue contributor for the rapidly growing fintech company. Established in 2017 as a subsidiary of Novatti, ChinaPayments has been enabling businesses with payment gateways to allow their customers to pay using Chinese payment methods such as UnionPay, WeChat Pay and Alipay. ChinaPayments has built up a strong market presence and uptake has created an opportunity for Novatti to extend its bill payments service to 10 other currencies including the Malaysia Ringgit, Indonesia Rupiah and Thai Baht. These services are part of the Novatti Bill Pay platform which is expanding into new regions with high cross-border payments in and out of Australia.
Although those revenue streams slowed down during the pandemic, Novatti substantially increased their fintech service offering to build a global payments ecosystem. Additional services launched by Novatti in the past three years include merchant services, credit cards and blockchain payments – all servicing segments of the international students supply chain where Novatti processes a portion of their $40 billion per annum contribution to the Australian economy.
For the quarter ended 31 December 2022, Novatti reported $9.3 million in sales revenue which represented a 60% increase on the previous corresponding period. Notably, Novatti also exceeded $1 billion in quarterly gross transaction volumes for the first time, putting them on a run rate of $4 billion annualised.
Novatti Managing Director, Peter Cook, said “The December quarter saw Novatti’s business hit a number of significant growth milestones. Most notably, quarterly gross transaction value passed $1b for the first time, up 83% year-on-year. This figure alone highlights the continued growth in Novatti’s base.
“This base will only be strengthened by the momentum building in Novatti’s future growth engines, which are increasingly attracting new, large-scale clients.”
On top of the existing digital payment products offered by Novatti, the biggest could still come with the launch of their International Bank of Australia (IBOA) which is 91% owned by Novatti.
As a dedicated payments bank which was granted a restricted banking licence in November 2022, IBoA has already commenced discussions with international service providers to target migrant banking in Australia.
“Since launching, the team has wasted no time in building the Bank’s commercial base, holding discussions with more than 50 potential partnership channels, such as migration, travel and education agencies,” added Cook.
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