Special Report: The deal will allow the company to boost its revenue margin on payment transactions by 40 per cent.
Payments company Cirralto (ASX:CRO) is executing on a global partnership approach as it builds market share in digital payments.
The company confirmed this morning that it’s signed a Business Payments Service Provider Agreement (BPSP) with payments giant Visa, and NASDAQ-listed fintech company Fiserv.
The deal follows an extensive period of due diligence from all parties, after Cirralto first established a partnership arrangement with Fiserv in March this year.
Customer focus
As a licensed payments service provider, Cirralto will be able to offer a streamlined service across facilitating both EFTPOS and online payments.
Speaking with Stockhead, Cirralto CEO Adrian Floate said the partnership with two global payments providers allows the company to de-risk client transactions.
“It gives us what’s called a strategic merchant rate (SMR). That means we can insulate clients from chargeback risk and ensure goods are being delivered under the BPSP processing scheme,” he said.
“Ultimately, that allows us to come in and be much more aggressive in terms of how we price payments.”
Streamlining the process will flow through to an improvement on transaction margins of 40 per cent, the company said.
And as it scales up, Cirralto expects to be able to reduce onboarding times by up to 50 per cent, generating more merchant fee revenue at lower per-unit acquisition costs as customer numbers climb.
“So there’s a lot of benefits from our perspective. One of our biggest objectives was to drive down our cost of transactions, and this will do that by allowing us to put more (payments) through the pipe at a lower cost to acquire,” Floate said.
Hitting the accelerator
Discussing the partnership with Fiserv after a multi-month period of negotiation, Floate said the deal is a “fantastic endorsement of where we’re going and what we’ve achieved”.
Via its strategic partnership, Cirralto can now act as the merchant of record for all customer payments across its B2B client base.
That means it’s also subject to additional compliance, and will be regulated by the financial services watchdog AUSTRAC.
“So there’s different rules put on us to make sure we’re being the umpire in the transaction flow,” Floate said.
“But it allows us to mark fees on the way through and accurately attribute payment information on the statement.
“All those things are great but only if it improves the end result for the customer, which we expect will translate into faster sales.”
Looking ahead, Floate said the company is focused on becoming a payments exporter serving an international market.
However, “it’s still early days in terms of our broader strategic vision”.
“Effectively this will allow us to accelerate growth and move through second and third gear. But there’s more to come in terms of our story with these global card processing players.”
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.