The international online payments landscape is rapidly evolving as yet another ASX-listed payments processor, Novatti Group (ASX: NOV) announced the launch of a bill payment service, able to bridge the gap between Australian supply and Chinese demand.
Earlier today, Novatti announced the launch of its new bill payment service chinapayments.com, a financial technology (fintech) platform enabling consumers to pay bills via Australia’s BPAY system, using funds from their Alipay wallet.
The news sent its shares 38% at market open this morning, currently trading at $0.28 per share and valuing the company at around A$48 million by market capitalisation.
The race for payments dominance in Australia is truly on with several companies now vying to become the go-to brands to court Chinese customers.
Last month, Smartpay (ASX: SMP) struck a deal directly with Alipay, with the deal bringing together the largest online payments provider in China and the largest independently-owned EFTPOS provider in Australia.
Along with WeChat, AliPay is the largest e-wallet provider in China, with the duo controlling around 90% of the market.
Many Chinese do not have access to Visa or MasterCard credit and debit cards, making e-wallets an attractive alternative payment method for residents, including students and new migrants.
In China, bills can be paid both using WeChat Pay and AliPay and are utilised as the standard go-to payment method. However, these transactions are not commonly used in Australia because they fail to adhere to certain financial regulations set by Australian regulators.
With the introduction of chinapayments.com, Novatti hopes to bridge this payments gap and thereby generate a consistently recurring revenue stream as a result.
From a macroeconomic perspective, the number of Chinese-born residents in Australia has reached a new high at 509,555, with China the most common country of birth for the more than one million new migrants who have come to Australia since 2011, according to latest census data.
In March 2017, 30% of the 480,092 international students enrolled in Australia were from China.
The unique service will be delivered directly to Australian’s local Chinese community, enabling Chinese residents, migrants, students and tourists to pay their bills with Alipay.
According to Novatti, the service launch furthers its strategic plans to deploy fintech that enables it to participate in rapidly burgeoning Chinese-Australian trade growth, on the back of growing tourism, property sales and student admissions to Australia.
The company said the launch also extends its existing range of Chinese payments services that will be made more robust and widely available to more customers.
Novatti will receive fees on a per-transaction basis for each bill payment processed via the platform, with its overall return dependent on the take up of the service.
In addition, the emerging payments facilitator said that extensions to the platform will include WeChat Pay and China UnionPay payments, with the features “currently under business development”.
“As a company at the forefront of innovation for new payments solutions for the global market we are delighted to announce the launch of the platform, another plank in our strategy to support the booming China Australia market, “ said Peter Cook, CEO of Novatti Group.
“We believe that this new platform will better benefit Chinese residents in Australia, which is a unique market full of opportunities,” he added.
With companies such as Novatti and Smartpay creating novel ways to enable smarter and more accessible payments, the clear winners are likely to be Australian consumers who obtain a far wider range of payment and money transfer options than before.