The revenue generated from this agreement with Carpet Court is expected to be material, according to Spenda.

Australian fintech Spenda (ASX:SPX) announced that Carpet Court has committed to integrate the Spenda Platform into its standard operating environment across all its member stores by April 2023.

This agreement was made following the completion of a recent pilot program conducted between the two companies.

Carpet Court is the largest retail floor-covering specialist in Australia, with a growing network of 205 franchised stores in every State and Territory.

Splenda says payments processed via its platform will increase productivity, and create efficiencies for both individual member stores and Carpet Court’s National Support Centre (NSC).

This is possible because the Spenda Platform is able to automatically allocate and reconcile payments in the accounts payable ledger and accounts receivable ledger of the store and NSC, respectively.

“Partnering with a national flooring retailer like Carpet Court provides Spenda the opportunity to showcase the maturity of our software, lending and payments stack,” said Spenda CEO, Adrian Floate.

“What we are solving for Carpet Court is industry agnostic.

“The desire to provide extended and flexible payment terms, e-Invoicing integration and greater cash flow visibility penetrates the whole supply chain.”

Under the agreement, Spenda will receive revenue streams from monthly Software as a Service (SaaS) fees and Transaction-related Payments fees, calculated based on payments volume processed.

The precise amount of revenue is unable to be determined at this  stage, as it will depend on the number of Carpet Court franchises deployed.

However Spenda says that it will be material to the company, with baseline fees estimated at $50k to $75k per month, or $600k to $900k per annum.

As guidance, a total of approximately $21m per month in payments volume is currently processed between all member stores and the NSC.

Significant uplift for Carpet Court

Throughout the pilot phase, Spenda has developed the CC Spenda Platform – a payment solution that  streamlines collections and accelerates payments between Carpet Court’s NSC and its members.

This platform is intended to enable Carpet Court to implement its key strategic initiatives in order to drive an increase in profit.

If the ongoing feedback from Carpet Court members continues to be positive, both Spenda and Carpet Court said they may expand the agreement to include a working capital facility to be made available to Carpet Court members.

A working capital facility  is expected to generate significant uplift for Carpet Court NSC by enabling it to better predict its cash flows.

To provide this working capital facility, Spenda says it could draw funds from the recently established debt warehouse facility, and advance these funds to individual stores to pay their invoices to Carpet Court’s NSC.

“The overwhelmingly positive feedback we have had from member stores demonstrate that when businesses implement a collections and payments software solution, that provides mutual benefits to both businesses in a transaction,” said Floate.

“Not only is there quick uptake and immediate return on investment to the business implementing the solution, but trading relationships are also almost instantly improved,” he added.

Spenda also has the opportunity to sell its retail services as a bundle, which includes Spenda’s Point-of-Sale solution and merchant services, into the Carpet Court franchise network.

The company says it expects significant uptake of this retail bundle.

Mark Hogan, chief financial officer of Carpet Court, says its agreement with Spenda could spur member growth.

“The Spenda platform enables us to leverage best-in-class integration capabilities for efficient end to end payment processing, whilst offering member services such as POS and working capital management facilities to save cost and drive member growth,” Hogan said.

 

 

 

This article was developed in collaboration with Spenda, 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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