Rapidly growing fintech company Novatti (ASX: NOV) has landed a major coup with the addition of point-of-sale (POS) payments technology, enabling merchants to accept digital payments from Visa and Mastercard without additional hardware. 

A new partnership with MYPINPAD allows merchants to simply download software for their Android device (mobile or tablet) and enable customers to tap their card or their mobile. Such technology eliminates the risk of traditional hardware-based terminal failure where businesses recently had to shut down in response to network outages by Tyro, one of the largest providers of POS hardware. 

The addition of these POS capabilities follows confirmation by Novatti that they have more than 800 active merchants already enabled by their merchant services division and comes just 12 months after Novatti secured licences from Visa and Mastercard for merchant acquiring services; one of approximately 20 payments companies in Australia that can provide this service. 

Growth from Novatti’s merchant services division is significant for Novatti, with Managing Director, Peter Cook highlighting physical devices and online portals as a gateway for payments to enter Novatti’s digital payments ecosystem. This was reflected by the $10.5 million in sales revenue generated by Novatti in the September quarter, a 98% increase on the previous corresponding period which was before being secured their merchant licences. 

“Novatti’s shift from development to monetisation is now fully underway with strong growth across acquiring, issuing and cross border, in particular,” said Cook. 

“This shift is also bringing two further, notable benefits. Firstly, we are able to shift our focus to delivering positive cashflow with cash use down another 10% on the previous quarter. Secondly, we can now leverage our ecosystem to commercialise new products and services quickly and efficiently.”

As sales continue rising for Novatti with more payments processed each month, the Company has reached a point where sales growth is exceeding cash use which decreased 10% in the September quarter. In addition to this, Novatti is now well capitalised with $14.5 million in cash which will be boosted by a $12.8 million dividend payment confirmed via their stake in software company Reckon (ASX: RKN). 

With that dividend scheduled to be distributed in November, the month shapes as a busy one for Novatti which will be launching its AUDD stablecoin at the start of November as the newest payment offering. The 1:1 fiat backed digital currency will assist customers to move money internationally, instantly and with minimal fees compared to traditional banks which take days to process similar transactions. 

Witnessing the rising value of digital payments and accounting automation, Cook has been buoyed to see acquisition interest within the sector coming from the big banks.

“The value of fintech-led solutions is clearly getting noticed,” he said. 

“We recently saw Westpac confirm its interest in acquiring Tyro while ANZ also considered acquiring the accounting platform MYOB. This sort of interest highlights the significant value in Novatti having its own acquiring business in market and the rationale for our strategic stake and partnership with Reckon Limited.” 

Boasting more than 117,000 business users of its cloud-based accounting software, Reckon and Novatti have a partnership established whereby Reckon customers are offered merchant services by Novatti.  Margins are then shared between the partners and have contributed to more than 800 merchants engaging in Novatti’s merchant services. 

Further payments services have been flagged by Reckon to soon include business banking products, potentially facilitated by Novatti which has a banking licence application currently being reviewed by the Australian regulator.