Small business owners will soon have another mundane bookkeeping task automated thanks to accounting software company Reckon (ASX: RKN) which has introduced a digital payments gateway to their accounting platform making it effortless for business owners to accept digital payments. 

The new service is designed for small business customers that use Reckon’s low-cost accounting software to capitalise on rapidly declining use of cash as the pandemic shifted in favour of digital payments. By offering the merchant services directly to their customers, the 114,000 current Reckon cloud users will be offered attractive merchant fees. 

“As we continue to increase investment in the development and launch of new products, we are exploring a number of ways to drive additional revenue streams and automation solutions for our clients,” said Reckon CEO, Sam Allert. 

The addition of digital payment merchant services to Reckon One comes as a by-product of Reckon’s collaboration with fintech company Novatti Group (ASX: NOV) who is the licence holder for merchant acquiring services from Visa and Mastercard. 

Together, the two companies will leverage Reckon’s large customer base of small businesses and share equally any gross margin revenue generated through the collaboration. 

For Novatti, there is additional earning potential being the largest shareholder of Reckon after acquiring a 19.9% strategic stake in July 2021, a move that will now benefit Reckon’s customers by being able to accept digital payments at reduced fees. 

“Since making our strategic investment in Reckon in July last year, we have really enjoyed working collaboratively with Reckon’s team to identify opportunities to add value to their customers and further monetise Novatti’s payments ecosystem,” said Novatti Managing Director, Peter Cook. 

“The integration of Novatti’s payment solutions into Reckon’s products is the first step in this process. We look forward to continuing to work with the Reckon team going forward and to seeking other opportunities to add value to their 114k+ users.” 

Carving out their position in the market, Reckon owns a unique spot in the accounting software market where they are able to offer their cloud-based software at a fraction of the cost compared to more high-profile likes of Xero and MYOB. 

As user-friendly software designed for small businesses, many will likely appreciate the received digital payments being automatically logged against invoices in order to remove cumbersome bookkeeping. 

While the new digital payments solution will be launched within the next few weeks, more upgrades are likely on the horizon for Reckon customers with the Company flagging further fintech opportunities being explored which include banking and lending services, payment automation and digital cards. These new services are likely to be offered through further collaboration with Novatti and their suite of financial service licences, including their banking licence application which is currently under review by the Australian regulator. 

For the full year ended 31 December 2021, Reckon reported a 1.6% increase in normalised revenue to $71.3m with EBITDA increasing 1.4% to $29.4m over the same period. 

Over the same year, Reckon was able to significantly reduce net debt by 52% to $14.7m, down from $30.7m while accelerating their product development which accounted for $20m in product development investment. 

“This agreement with Novatti Group will provide Reckon with the opportunity to deliver additional services at a competitive rate for our clients whilst providing opportunities to further monetise our existing customer base,” said Allert.