Novatti isn’t buying Australian milk to send to China, but has found another way to tap the moneyed Chinese population at home and overseas.

The company says its gamble on a payments service for China residents to pay bills in Australia is paying off so well they’re looking at transaction volumes rising from $460,000 in January 2019 to an estimated $700,000 in February.

In the December quarter the dollar value of transactions still only averaged $200,000 a month.

As to the reasons for the pick-up? Novatti CEO Peter Cook attributed it to an increasing level of trust as the product spends more time on the market.

“We think it’s partly the result of a lot of digital marketing, but it’s also just viral behaviour where one person tells their friend and they tell someone else,” he told Stockhead.

“It takes quite a bit of trust to use a product like this and you need some time for that trust to build.”

Paying the man

Early last year the listed fintech (ASX:NOV) was looking for a way to simplify how people who live in China can pay bills in Australia.

And in April, it said it had found a solution: link the process to Alipay, the huge Chinese payments network used on Chinese e-commerce giant Alibaba.

The business, called, is aimed at Chinese nationals who have, say, a child studying in Australia. Novatti’s service allows them to pay rent, bills and university fees straight from their Alipay account.

Novatti clips the ticket on each transaction by charging an “additional service fee” and gets Alipay to take care of the currency exchange.

“The additional fee includes a fee that Alipay charges for the cross border foreign exchange — so the payment starts in yuan from the consumer’s Alipay account and Alipay convert it to AUD when they pay to us,” Peter Cook told Stockhead.

Getting a foothold

Novatti has plans to become a multi-level financial middleman for Chinese consumers in Australia.

Cook told Stockhead that a payment facilitation service for Wechat Pay “will be on within a couple of weeks”.

“We will then roll out a direct integration to the Bank of Shanghai so that a Bank of Shanghai customer can do this direct from their bank account.”

Cook said the platform was a practical way to onboard customers for Novatti’s other banking services.

It’s not a bank per se yet, but in November it applied for an APRA license to operate as a restricted authorised deposit-taking institution (ADI) in Australia.

Novatti shares were flat at 22 cents per share approaching midday trade.