MSL Solutions partners with Openpay in exclusive three-year deal
Openpay has agreed to pay MSL an annual rebate of fees payable to Openpay during each preceding year.
Software-as-a-Service (SaaS) technology provider MSL Solutions (ASX: MSL) has ventured into integrating a novel fintech solution into its service offering after signing a strategic partnership and revenue sharing merchant agreement with leading Buy Now Pay Later (BNPL) payment solution provider Openpay (ASX: OPY).
The exclusive agreement was described by Openpay chief commercial officer Dion Appel as a “smarter way” for hundreds of golf clubs on MSL’s platform to offer Openpay’s BNPL services for the purchase of golf memberships.
Openpay provides BNPL services to customers and merchants in multiple countries in the form of repayment plans to customers in-store, in-app and online.
The BNPL offering enables customers to purchase goods and services upfront while spreading repayments over time with no interest costs.
Additionally, Openpay claims that by providing flexible payment solutions, its BNPL offering also facilitates increased transaction values and conversion rates for merchants at checkout, thereby helping to boost consumer demand and sales among merchants offering its services.
The new three-year agreement will see MSL integrate Openpay’s BNPL offering with its golf and membership products.
This will, in turn, enable participating golf clubs to include Openpay’s BNPL plans as a payment option for member subscription fees “whilst enhancing golf clubs’ operating cashflows”, MSL said.
Resilient financials
Just last week, MSL announced a 78% year-on-year improvement in half-year cash performance and posted $17.9 million in recurring revenue, driven by strong customer engagement, new contract wins, a resilient golf business and “rigorous cost control” in response to COVID-19.
The company reported operating cashflow outflows of $444,000 in Q2 2020 and said the figures represented its best operating cash outcome since June 2018.
Importantly, MSL is partnering with Openpay on an exclusive basis, given that the deal excludes Openpay’s competitors in the Australian market.
Furthermore, according to the deal terms, Openpay has agreed to pay for platform functionality to be established and both parties have agreed to revenue sharing terms, which will see Openpay paying annual fee rebates to MSL payable during each preceding year.
“We are proud and excited to partner with Openpay. As with all potential partners, we have carefully reviewed and selected Openpay on the strength of the quantifiable benefits that we believe Openpay can bring to our customers,” MSL chief executive officer Pat Howard said.
“Openpay is at the forefront of the [BNPL] sector, offering a flexible product delivering attractive terms for golf clubs and their patrons.””
“We expect this partnership to add an attractive new dimension to MSL’s golf suite of services as it allows for greater profitability and customer retention among our golf club customers,” he added.