Payment technology provider Mint Payments (ASX: MNW) has taken steps to expand its operations by widening its addressable market in Asia.
Mint signed a Heads of Agreement with United Overseas Bank Malaysia (UOBM), one of the largest business and commercial banks in Malaysia, and part of the UOB Group, the 3rd largest bank in South East Asia.
The deal represents a major milestone for Mint, still a small cap company worth just over A$28 million by market capitalisation and recorded a quarterly revenue figure of A$700,000 in Q3 2017.
In stark contrast, UOBM generated RM1.44 billion (A$465 million) over the same period.
Effectively, Mint’s new partnership will enable it to acquire business customers directly in Malaysia, where the company will look to replicate the same growth that Mint is experiencing throughout Australia.
From fringe to southeast Asia
Just recently, Mint was selected as the “exclusive payments partner” by organisers of the annual Adelaide Fringe Festival.
The event was Mint’s first in terms of servicing major events and festivals, but considering the success of the venture, the company called the event a “pleasing and strategically important development for Mint as it opens up a new and very large vertical.”
At the time, Roberto Cardone, Director of the Royal Croquet Club, gave Mint a glowing assessment by saying: “They’re the only partners who gave us a completely cashless solution we could be confident in.”
News of Mint partnering with UOBM and by extension, its parent entity UOB Group, sent its shares 16% higher up to $0.043 per share this morning.
According to the terms of the deal, Mint will supply and provide its payment systems, services and hardware to UOBM, and deliver what Mint has called “a fully compliant and all-in-one multi-channel payment solution.”
As a key commercial caveat to the deal, UOBM has agreed to a minimum monthly order commitment upon commencement of the payments service provided by Mint. Additionally, UOBM has agreed to pay Mint monthly software and terminal activation fees, hardware and transaction fees over an initial three-year term, with an option to renew on an annual basis.
Mint’s payment solution is a strategic initiative for UOBM aimed at helping the bank to establish a more digitally-centric market position domestically. Also, Mint will enable the bank to meet its obligations to Bank Negara Malaysia, the country’s central bank.
The central bank legislated payment card reforms in 2015 with the aim of developing Malaysia’s payments infrastructure and helping to facilitate more business, from both domestic residents and tourists.
The central bank has said that it is seeking to significantly grow Malaysia’s card payment acceptance base from around 350,000 vendors currently, to over 800,000 card payment acceptance terminals by 2020.
Mint’s CEO Alex Teoh said that “this Heads of Agreement is a significant milestone for the Mint Payments, as it continues to execute its strategy of growing Mint’s presence in key markets in South East Asia.”
“Malaysia is a large and strategic market opportunity, particularly due to the rapid adoption of smartphones, the growth in online businesses and Bank Negara’s Payment Card Reforms which are aimed at reducing the cash economy and providing greater transparency and accountability for the nation’s economy,” Mr Teoh added.