Change Financial signs up four new NZ financial institutions as clients for a total US$10.5 million
The signing of the four clients in New Zealand is significant, because they are the first direct issuing clients for Change in the Oceania region. The deals will also trigger an incentive payment from Mastercard.
Fintech payments leader, Change Financial (ASX:CCA), was up 17% this morning after signing up four New Zealand financial institutions with a total contract value in excess of US$10.5 million.
The Payments as a Service (PaaS) contracts will see Change offer direct issuing, processing and card management solutions to NZ’s largest building society and three credit unions via its Vertexon platform.
These four financial mutuals currently utilise Finzsoft as their banking platform provider and Change’s existing relationship with Finzsoft has enabled the opportunity to transition all four clients from their existing direct issuing and processing provider to Change.
As a result of the agreement, more than 35,000 cards currently in the market issued by these institutions will be migrated onto Change’s Vertexon platform.
“We are excited to have secured four clients who will leverage our Vertexon platform and Mastercard direct issuing in Oceania,” said Change CEO, Alastair Wilkie.
“The deal will see us establish new debit card programs with First Credit Union, Nelson Building Society, Westforce Credit Union and Police Credit Union.”
The four financial mutuals have over 200 years of operations between them.
Wilkie says that onboarding their clients to Vertexon will allow these institutions to offer better services to their clients.
“Change’s Vertexon platform will deliver critical payments technology allowing the financial mutuals to offer innovative digital and physical card payments capabilities to their customers throughout New Zealand,” said Wilkie.
First Credit Union general manager, Simon Scottsaid “By accessing Change’s Vertexon PaaS, Mastercard issuing and card holder API systems, we can provide modern card features that rival the major banks and fintechs.
Finzsoft chief executive, Helen Hatchard, agreed, saying: “The partnership with Change will allow these financial mutuals to offer a modern digital payment experience to their members, and allow them to better compete with major banks and fintechs.
“Change’s payments experience, product roadmap and strong New Zealand presence will create a truly modern and innovative digital experience for our clients,” Ms Hatchard added.
The onboarding is expected to begin this quarter (Q4 FY22), with launch anticipated in late H1 FY23.
The four institutions are the first clients signed by Change for direct issuing in Oceania, and will trigger an incentive payment from Mastercard to Change.
Earlier in March, Change signed an exclusive six-year direct issuing partnership deal with Mastercard in Australia and New Zealand, which comes with various incentives including US$1 million that Mastercard will pay upon launch of the first card.
“Change is expanding its global capability, and these are the first PaaS clients to leverage our Mastercard direct issuing and Vertexon platform in the Oceania region,” explained Wilkie.
“Change has a strong heritage in Australia and New Zealand, and we are proud to be partnering with community focused financial organisations.”
The terms of each contract are the same for all four clients, containing upfront implementation fees as well as volume and transaction based fees.
Based on approximately 35,000 existing cards being transitioned across to the Vertexon platform, Change estimated that the combined total contract value will be in excess of US$10.5m (A$14.6m) over the initial five-year terms.
This equates to anticipated revenues in excess of US$2.1m ($2.9m) per year, once all four clients complete onboarding and customers are re-carded.
“There are many credit unions and financial mutuals across ANZ that could benefit from the Vertexon platform. We are working hard to capitalise on this opportunity in the near term,” said Wilkie.
This article was developed in collaboration with Change Financial, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.