With its platform advantage now established, the company is primed for strong growth in the years ahead.

The booming global market for digital payments is one of the defining features of the post-COVID economy.

With that growth comes competition. And while there are a number of ASX small caps looking to capitalise in the space, Novatti (ASX:NOV) has separated itself from the pack in 2021.

Amid the broader tailwinds in the sector, Novatti’s executive team has focused on a multi-channel approach that includes B2C channels as a complement to its B2B payments ecosystem.

And so far this year, investors have begun take notice. After starting 2021 at around 25c, NOV shares are now trading at around 75c, marking a year-to-date gain of around 200pc.

 

Growth strategy

Through the application of multiple growth initiatives, Novatti now processes more than $2bn of transactions per year, with a suite of more than 400 business customers and annualised revenue of more than $16m.

In an investor presentation this month, the company detailed the strategy around its B2B ‘ecosystem’ which allows it to leverage a number of different revenue channels.

The company’s platform strategy leverages Novatti’s strengths in technology, licences and its global partnership approach to provide “scale without substantial capital”.

“Novatti sees a very bright future in what we do best – enabling businesses to pay and be paid,” said CEO Peter Cook.

“Our B2B ecosystem is enabling businesses and fintechs to meet changing needs and, backed by strong market growth, our focus is on accelerating the expansion of this ecosystem,” he said.

Among its proprietary advantages, Novatti holds an Australian Financial Services Licence (AFSL) in the domestic market.

Its business ecosystem approach is designed to capture revenues at multiple stops along the value chain, starting with card issuing where Novatti is a principal partner for global payments giant Visa.

“Structural change in our key market segments is driving strong growth, including more people choosing prepaid Visa cards for flexibility and businesses looking for online and mobile payment solutions as people shop on the go,” Cook said.

Other key growth areas include point-of-sale payments for ecommerce, merchant billing, and cross-border payment transaction services.

Based on activity in the year-to-date, the Novatti executive team has demonstrated its commitment to building out a genuine payments platform across global markets.

Highlights include the March launch of Emersion — its US subsidiary that operates a cloud-based SaaS billing and business automation service – and a regional partnership with BNPL leader Afterpay.

Looking ahead, Cook said the business is now primed for additional growth as it leverages its niche in the market as a multi-channel payments platform.

“This new vision ensures payments remain at the centre of what we do. Going forward we will continue to deliver even better payment solutions as we partner with businesses to unlock their ambitions,” Cook said.

This article was developed in collaboration with Novatti, 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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