Digital solutions group IncentiaPay (ASX: INP) has entered into a technology partnership with payments innovation platform Paywith Worldwide Inc to deliver new products and value propositions for customers.
IncentiaPay produces loyalty products from organisations and major brands that offer discounts and other incentives across dining, takeaway and travel.
Its most recognised brand is its wholly-owned subsidiary Entertainment Group, which produces the Entertainment membership app (and former Entertainment Book).
Under this new partnership, Paywith’s processing engine, offers marketplace and syndication platform will combine with IncentiaPay’s content and relationships database.
IncentiaPay has also entered into a multi-year agreement to licence Paywith’s platforms, which will be funded by a drawn-down of a capital expenditure facility provided by Skybound Fidelis Investments as trustee for the Skybound Fidelis Credit Fund.
The facility commenced in June for specific capital projects related to IncentiaPay’s planned technology transformation and advancement as part of a business restructure.
IncentiaPay chief executive officer Henry Jones said the Paywith partnership will play an important role in the turnaround.
“We are delighted to be partnering with Paywith – an innovative fintech with a proven track record in building game changing offer syndication, payment and rewards solutions,” he said.
Despite kicking off the June quarter with subdued sales due to COVID-19 disruptions, IncentiaPay finished the period with $7.78 million in cash receipts and $1.4 million in operating cash surplus.
The company’s quarterly report outlined April and the beginning of May showing significantly lower cash receipts from membership renewals than in previous corresponding periods, due mainly to pandemic-related impacts.
Across all states and territories, IncentiaPay’s merchant partners were affected by government-imposed mandates on the closure of pubs, clubs, restaurants, cafes and entertainment venues, which had a flow-on effect to the company’s sales.
As a direct response, it changed its focus from dine-in to takeaway revenue, launching the #EatAloneTogether campaign with the Restaurant & Catering Association of Australia.
The primary purpose of the campaign was to drive immediate redemptions and support customer traffic to merchant partners.
Fundraising season for IncentiaPay’s popular Entertainment platform – which usually starts at the end of the third quarter – was delayed by more than three months, as were fundraiser group launches which shifted from physical to online events.
As restrictions eased towards the end of May, the company re-launched its membership season on 1 June, resulting a resurgence of Entertainment membership revenue inflows for the remainder of the quarter.
However, with unemployment rates growing and many members facing economic hardship due to job losses or decreased income, renewal rates have been expectedly lower than in previous years.
IncentiPpay also conducted a significant cost-cutting initiative during the quarter, achieved in consultation with employees to reduce salaries and working hours.
The importance of short-term sales targets to the company’s bottom line saw select employees temporarily re-instated full time, with the company continuing to tightly manage costs in key functional areas.
IncentiPpay said it will continue to monitor the pandemic for extended impacts.
“We will review the impacts of COVID-19 on a regular basis and manage repercussions as conditions evolve and change,” it said.
“Our current focus is on extending our membership sales season to increase revenue inflows and supporting our merchant partners and fundraising groups [but] we note that further restrictions in some states are likely to have an impact on short-term membership revenue,” the company added.