IOUpay’s development continues in June quarter with successful launch of myIOU BNPL platform, mass merchant onboarding and impressive early BNPL numbers.

Fast-moving fintech provider IOUpay (ASX:IOU) continues to gain momentum with mobile banking transaction numbers up 9.3% in the June quarter along with the successful launch of its myIOU BNPL platform and service offering.

BNPL Total Transaction Value (TTV) for June was $584,459 with Net Transaction Revenue (NTR) of $48,413.  A further $1.6 million in TTV has been transacted already this financial year, delivering NTR of $142,508.

These numbers are all the more impressive given myIOU was launched 15th June in the midst of level 4 lockdown restrictions which were reinstated at the start of June.


myIOU launches with impressive early BNPL numbers

“We are very pleased with the early transaction volumes.  Momentum is already building  despite being in lockdown,” said IOUpay director, Paul Russell, who Stockhead caught up with following the release of the company’s June Quarterly Report & Business Activity Update.

Russell explained that if the growth trajectory can be maintained the company is not far from covering its monthly cash burn rate with new BNPL net transaction revenues.

“The company has reported normalised net operating cash outflow of $594,000 for the June quarter after adding back significant once off costs.  We aren’t too far away from breaking even on a net operating cash basis when you consider the BNPL net transaction revenue being generated,” Russell said.

Based upon the cashflow report announced by the company, the current monthly cash burn (excluding once off costs) is estimated at nearly $240,000 when increased staffing costs are included.  With over $51million in the bank, IOUpay has sufficient cash to cover net operating cash outflow for 30 quarters based upon the June quarter figures.

The company’s myIOU official launch was held as an online virtual event which was covered by various Malaysian media.

“To launch our myIOU App and BNPL offering 2 weeks into a level 4 lockdown was no small feat, so we were thrilled to have the print and broadcast media coverage we received.  Making the prime time national news on TV1, TV3 and Malaysia’s national news agency Bernama as a headline story reaching more than 8.6 million people was a highlight, and we are building on that momentum now,” Russell said.


COVID-19 pandemic digital shift a positive

IOUpay is capitalising on disruption during the pandemic, which has accelerated growth in digital payments, contactless payment methods and e-commerce activity.

Opportunities for innovative financial technologies are rapidly evolving as consumer communities and commercial enterprises seek digital solutions.

“We are in a strong position to benefit from the shift to the new digital economy through all of our business channels including digital payments, mobile banking and BNPL services,” Russell said.

The company believes that consumers and businesses have adapted to the new environment and expects more people to become savvy users of technology to manage their money and organise their lives.

“It really provides companies like IOUpay the opportunity to deliver quality products that facilitate digitalisation in an inclusive way – easy to access and use, saving people time and money,” Russell said.

Due to various Movement Control Order (MCO) restrictions implemented by the Malaysian Government to manage the pandemic, IOUpay has been focusing on online merchants.

“The MCOs have led us to shift our focus towards the online merchants belonging to our signed partnership communities as they are not restricted by the lockdown and many of them are experiencing increased volumes,” Russell said.


Mass merchant onboarding underway

IOUpay continued to expand its footprint in Southeast Asia during the June quarter, securing key partnerships with two of Malaysia’s largest merchant networks MYP1 and Razer Merchant Services, representing over 65,000 merchants.

The deals bolstered IOUpay’s combined merchants available from strategic partnership agreements to more than 135,000.

Russell told Stockhead the partner relationships are building a sophisticated, highly integrated foundation for the distribution of myIOU BNPL service offerings to consumers.

“We expect our collaboration with quality partners like MYP1 and Razer to provide many growth opportunities.  It’s not just about the size of the ecosystem but how we integrate and interact to enhance the lives and businesses of our consumer and merchant communities,” Russell said.

The company has reported signing 1,302 merchants of which 1,206 have been onboarded through a process of mass onboarding of large batches of merchants from IOUpay’s strategic partners.  From this number the company reported 199 merchants having been activated on the myIOU platform but Russell says that number grows each day.

“Partners send over batches of merchants which our credit department reviews and curates for quality, and then selected merchants are processed.  Ultimately, only those that meet our high standards and align with our brand values are activated onto the myIOU platform,” Russell said.


Star power for marketing

IOUpay are developing various new marketing campaigns using social media influencers to drive growth through highly targeted community followings.

“The idea is to bring both global and local community star power to IOUpay and our ecosystem of merchants and consumers with targeted positioning, educational and entertaining content,” Russell said.

“We are about unique, positive and uplifting experiences and we want that to come through all aspects of the brand and marketing.”

The company is hoping to build on the transaction volumes already booked by leveraging social networks to grow the consumer base of myIOU.

“We’re very pleased with the momentum we have already established in the weeks following the launch of myIOU and are wanting to capitalise on this so will be investing in targeted marketing campaigns to penetrate myIOU into new community populations.”


B2B deals set to surge

The company has reported extremely positive indications from business development interactions with SMEs and large corporates.

“B2B is expected to be a growth segment for us.  There has been a lot of early interest from quality counterparties, which we are very excited about,” Russell said.

Russell indicated that B2B interest so far has been particularly healthy in the automotive, technology and professional services industry verticals.  He said the business development team are already working on live transactions.


Key operational moves to drive future growth

Earlier this month IOUpay announced the appointment of senior business development executive Christopher Kok to the key position of regional commercial officer.

With more than 20 years of business development experience in fast-moving consumer goods in international markets, Kok will drive the company’s commercial activities, penetration of its BNPL product in Malaysia and business expansion into other countries in the region.

“Christopher is an outstanding business development executive with an extensive track record of launching new products, developing new markets and leveraging partnerships to grow business volumes.  He is a significant asset to the company, particularly given our strategic objectives,” Russell said.

Once pandemic restrictions are eased, the company expects to resume its expansion into new SEA territories and activate instore merchants already onboarded as well as in-field promotion and marketing.

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.