As more and more people prefer to go cashless, it is compulsory now for even the smallest corner store to accept card payments, or risk losing customers. Observing a potential growth opportunity by supplying digital payment terminals to businesses, fintech company Novatti Group (ASX: NOV) has partnered with payment solutions provider DataMesh Group to enhance the point-of-sale (POS) capabilities of their rapidly growing network of merchants. 

An emerging player in global payment services and merchant solutions, DataMesh will provide its Android POS solutions terminals to Novatti’s broad customer base, primarily supplied by their merchant services division. Novatti’ Acquiring division already has more than 800 merchants that accept credit and debit cards payments from customers via Novatti’s online payment portals.

The addition of POS terminals will expand Novatti’s range of in-person payment acceptance methods which are now a critical staple of all brick-and-mortar businesses. 

Novatti bolsters DataMesh Group’s multi-acquiring capabilities and enables them to take advantage of Asian payments solutions such as American Express, UnionPay, Alipay and WeChat – all of which Novatti has been a mainstay payments partner for several years. 

Additionally, the partnership also enables DataMesh to process payments via Novatti’s payXcrypto (patent pending) which enables merchants to accept payment in crypto and receive settlement in FIAT through Novatti’s ecosystem which is synced to cryptocurrency exchanges. 

According to Novatti CEO, Peter Cook, the partnership with DataMesh Group puts Novatti in a unique position in offering unified merchant payment solutions. 

“Working with POS network provider DataMesh enables Novatti payments to be extended to potentially many thousands of retailers and businesses with POS devices.

“Our solutions enable businesses to accept payment from consumers online, in-store and through mobile, from credit and debit cards, direct debits to various digital wallets along with Amex, UnionPay Alipay and WeChat Pay. We are incredibly proud of the fact that we have developed and commercialised this business in-house.“

Although Novatti’s merchant services division only kickstarted 12 months ago when securing key regulatory licences to accept card payments, the division already processes more than $45 million in payments per quarter for its 800+ merchant clients.

Revenue is generated for Novatti as small fees where they have the benefit of owning their entire digital payments ecosystem, where other merchant service providers need to outsource to fintechs like Novatti, or banks. Owning the technology, regulatory framework and launching International Bank of Australia last month, merchants are able to accept digital payments from customers through Novatti. 

“Novatti’s Acquiring business is very innovative and is highly scalable,” Cook added. 

“We believe this business has a very bright future and will have an increasing impact on Novatti’s performance, growth and margin contribution going forward.”

For the quarter ended 30 September 2022, Novatti reported $10.5 million in sales revenue which represented a 98% increase on the previous corresponding quarter. 

With the launch of International Bank of Australia which now operates independently of Novatti funding, it’s estimated that this could result in savings of $3 million per annum on top of the organic growth delivered by banking infrastructure, and has Novatti on track to be cash flow positive in FY23. 

This view was shared by a report released by MST Access on 8 December 2022 valuing NOV shares at $0.67. 

As of 2021, the addressable market for merchant services was valued at $677 billion per annum, growing annually at 5.1% annually. This market has since increased even further in the pandemic aftermath where digital payments have become the norm alongside growth in eCommerce.