Australian payments technology innovator Novatti (ASX: NOV) has secured a significant backing with Australian Fintech Investment Group (AFIG) to invest $1.1m in Novatti’s ambitious disruption plans which will initially target new migrants.
The investment will be made directly into Novatti B Holding Company (NBHC) which will be the subsidiary managing the company’s banking services unit, currently valued at $20m by the two companies.
Already operating in the Australian payments sector which has been shaken from buy-now-pay-later service providers, Novatti holds a Principal Issuer Licence from Visa Inc. (NYSE: V) to issue prepaid Visa credit cards. Subsequently, Novatti’s payment processing revenue was up 31% to $1.16m last quarter.
As part of Novita’s growth strategy, the company has lodged an application to APRA for a RADI (Restricted Authorised Deposit-taking Institution) banking licence which will be integral to their digital wallet technology offering, much of which stems from popular tech developed in China.
The investment from AFIG is expected to accelerate Novatti’s digital wallet business.
“AFIG has access to funds and technology that can accelerate both Novatti’s payment processing and banking plans. Customers gained from this new venture will aid the long term bank customer acquisition,” said Novatti CEO, Peter Cook.
Within their Memorandum of Understanding between the two fintech companies, AFIG will provide the consumer digital wallet app, whilst gaining access to Novatti’s banking and financial services licenses.
“Novatti already has an extensive understanding of Chinese and international payment services and, with our access to Chinese wallet technology, we can quickly launch new services for consumers and merchants in Australia,” said AFIG Chairman, David Gao.
“In addition, the application has the ambitious aim of revolutionising consumer banking behaviour and to enhance merchant to consumer interaction over mobile devices.”
Through these new means for banking and payment solutions, Novatti will be targeting new migrants in Australia, many of which will already be familiar with the banking technology via use in their homeland.
If issued, Novatti’s initial suite of banking services will be restricted under their RADI banking licence but the Company intends on applying for a full licence in the future.
Following the announcement of their new partnership with AFIG, shares in NOV surged to an intra-day high of $0.23 in morning trade, a 27% rise on the previous day’s $0.18 closing price.