IOUpay has provided a strong update for the first half of December quarter as it prepares to launch myIOU Business+ and enhances its tech platform for two foreign currencies in advance of territory expansion.

Malaysia-focused fintech IOUpay (ASX:IOU) has announced a positive BNPL business offering and operational update for the first half of the Q2 FY23 (Oct 1 to Nov 15).

myIOU BNPL transactions completed in the first half of the December Quarter include $2,948,080 in total transaction value (TTV), delivering $194,491 in net transaction revenues (NTR).

My IOU BNPL has seen continued growth in consumer and merchant sign ups, since its June 2021 launch.

Approval and onboarding, cumulatively includes:

  • 2,844 merchant outlets activated and listed on myIOU, up 5% since Sep 30
  • 51,463 consumer activated accounts, up 14% since Sep 30

Transaction volumes during the first half of Q2 FY23 were lower than the corresponding period in the September quarter given very strong results for July.

The myIOU income margin of 6.6% is above the average margin over the past 12 months reflecting preferences for the six-payment plan, which is paid over five months.

Effective annualised returns for individual transaction profiles remain within the company’s target range.

Over the past 12 months, the company has written TTV of $31,924,683 delivering NTR of $1,985,770 (AUD values assume MYR/AUD exchange rate 3.05).

myIOU Income margin for the 12 months to 15 November 2022 is 6.2%, which remains within the company’s target range.

Strong credit control strategy working

IOU reports non-performing loans (NPL) of $249,430 and NPL Ratio of 0.78% as at 15 November 2022.

IOU believes the NPL and NPL Ratio remain modest, reinforcing the strong credit quality control strategy.

IOU continues to focus on building a community of quality merchants and consumers as part of its ‘best-in-class’ brand positioning in Southeast Asia.

Merchants continue to grow

During the period, 73 new merchants operating 164 outlets around Malaysia were added to the myIOU platform.  New merchants were added to 11 industry vertical categories.

There are now more than 2,800 merchant outlets that are system active on the myIOU platform across 13 industry verticals.

Active consumer engagement has continued into Q2 FY23.  As measured against results at September 30, consumer downloads are up 15%, consumer onboarding up 15% and consumer account activation up 14%.

Mobile Banking Division

Transaction activity levels for IOU’s Mobile Banking Division in November are trending upward indicating another strong month of performance.

The company will report its November numbers in its December quarterly activities report.

Source: IOUpay

Strategic partnerships update

IOU has continued to progress several strategic partnerships including:

  • Pine Labs – Master Services partner agreement
  • senangPay – Master Merchant Agreement
  • SOGO Departmental Stores
  • PayHalal Merchant Acquiring Services Agreement (July 2022)
  • ManagePay – Integration with Payments Platform
  • Revenue Monster – Integration with Payments Platform

myIOU Business+ launch

IOUpay Asia is launching myIOU Business+, an innovative new short-term B2B financing solution.

myIOU Business+ will be available to business enterprises registered with the Companies Commission of Malaysia (SSM) or holding a local authority trade licence.

The product is targeting SMEs but will be able to be accessed by all eligible businesses.  SMEs represent 97% of total business establishments in Malaysia, generating 38% of the country’s GDP.

The new product is an online portal allowing business purchasers of goods and services to facilitate financing for their suppliers in credit terms via a seamless and automated transaction.

Transactions are initiated and payments processed after goods have been delivered and accepted by the purchaser ensuring payment obligations are committed and reducing the risk of disputes.

myIOU Business+ is structured as a ‘pay-in-four’ instalment plan over three months (every 30 days).   Four equal payments, each being 25% of the invoice amount, are collected via FPX-linked automated direct debit to the purchaser’s account.

FPX is an internet-based payment gateway that allows real time payments, operated by Payments Network Malaysia Sdn Bhd (PayNet), a wholly-owned subsidiary of the country’s central bank, Bank Negara Malaysia.

The first 25% payment is collected to initiate a transaction and then three further equal 25% instalments are collected every 30 days thereafter.

Purchasers can view the transaction online for complete visibility of trade cycles and easy report generation.  Participating suppliers will benefit by accelerating the cash flow cycle through early settlement of invoices via the simple, online process.

The new B2B product complements IOU’s existing B2C BNPL service, expanding the company’s addressable market and diversifying its revenue streams.

Technology update

Enhancement to upgrade the merchant app version consistent with the consumer app of myIOU Merchant App UI/UX is on track for rollout during January 2023.

The myIOU 2.0 phase three remains on track for completion in December.  Amongst other enhancements, phase three includes functionality to process myIOU transactions in two foreign currencies.

This will facilitate cross border transactions in anticipation of expansion into additional Southeast Asian jurisdictions.

The technology team is developing a new administration portal to provide more functionality to support the myIOU BNPL business as it grows and expands in capability.

The new administration portal will improve efficiency, data analysis, reporting and performance of the backend system with rollout planned for Q3 FY23.

Integration with Experian is complete with rollout expected by January 2023.   The Experian credit analysis and checking services are additional to and provide a backup for the company’s primary credit reference service provided by CTOS Digital Bhd.

This article was developed in collaboration with IOUpay, 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.

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