Special Report: The digitisation of payments still has a lot further to run, and Cirralto has a strategy to capitalise.

The 2020 year has been defined in part by investor enthusiasm for new tech solutions around payments and ecommerce.

But for fintech payments platform Cirralto (ASX:CRO), the shift only marks the start of what will become broader tailwinds in the years ahead.

The company has attracted investor attention as it takes a partnership approach to building out an end-to-end business payments solution, with CRO shares doubling since the middle of August.


Industry tailwinds

With more positive news flow in the works, Cirralto CEO Adriane Floate recently spoke with Stockhead about how the company is positioning itself strategically in a high-growth sector.

Despite the post-COVID investor hype (particularly for BNPL stocks), Floate said there’s still “a lot of mileage left in the broader digitisation of payments”.

“People want their payments infrastructure to be more than just contactless. They want to be in control of their own card number from end-to-end and use it to facilitate transactions across multiple vendors.”

Floate said the current trends are part of a broader shift that began with the launch of the iPhone in 2007. Using that new infrastructure, companies such as Uber innovated on top of it with automated, app-based solutions.

The success of that model showed the world is “yelling for change”, Floate said.

However, “there’s still lots of industries that have to change to come to terms with that. It’s broad sweeping in terms of the way in which POS (point of sale) systems work, and the way in which we make bookings.”

“So ultimately we’re positioning to take advantage of the ‘Uberfication’ of payments more broadly — that’s how we see it.”


B2B opportunity

Cirralto’s entry into that market is being driven by its strategic acquisition of tech company  Appstablishment, which gives CRO access to Spenda – a broad technology suite with direct links to the major accounting software providers.

By implementing Spenda, the company is positioning as a market leader in payments facilitation, allowing businesses to trade faster and get paid quicker.

The platform includes automated invoicing, a notification feature to follow up with customers about payments and the capacity to sync the Accounts Payable of the customer to the Accounts Receivable of the supplier in real-time.

So along with point-of-sale and inventory management, the software is designed to provide a full-service support function across the entire business.

To describe how Cirralto’s solution works, Floate used the example of a customer looking to rent a boat-cruise service on Sydney Harbour.

With existing payments technology, that transaction is a multi-step process where credit card details are provided and the amount is charged once the service is rendered.

However, Cirralto’s service is built to improve the efficiency of “workflow payments” to speed up and automate the transaction.

“It removes steps from the process. Because we’re effectively using the card as a guarantee to the boat hire company that you’ll proceed with the transaction,” Floate said.

“Then after you return that boat, the remainder of the transaction is processed.”

It’s a relatively simple concept, but you can “count on one hand the markets that do this”, Floate said.

“Uber, the hotel industry and car hire companies all deal in that model, but no other markets that run that play – where the actual payment event is driven after the invoice is rendered.”

“And for a lot of different industries, it’s a significant efficiency improvement.”

So while commercial pathways are evident across both B2C (business-to-consumer) and B2B (business-to-business) markets, Cirralto is focused on the latter channel.

“We’re pretty excited to do it in B2C, but we’re much more excited in B2B,” Floate said.

“When you look at general services companies, the current model is very expensive but nonetheless they’re relying on the invoice to be rendered and job details to be provided (before payment).”

So we want to establish the ‘Uber-fication’ of those payments – putting traditional EFT payments to card, then sharing that remittance experience end-to-end.”

This article was developed in collaboration with Cirralto, 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.