Payment platform provider QuickFee’s (ASX: QFE) shares have sky rocketed more than 212% within its first two days of trade on the ASX, after it reported (unaudited) a 170% growth in transaction activity in Australia for the financial year ending June 2019, with activity in the US soaring 182% during the same period.
QuickFee began trading on the ASX on Thursday after raising A$13.5 million in its IPO via the issue of 67.5 million shares at $0.20 each.
By Friday, the company’s share price had increased more than 212% to reach an intraday high of A$0.625 – driven by a business operations update for the financial year ending June 2019, which revealed the company had added 618 professional services firms to its books within Australia and 236 firms in the US.
In addition to the high increases in transaction activity during FY2019, lending activity in Australia had risen 17% during the period to A$42 million compared to 2018. In the US, lending activity grew 108% to US$8.3 million.
QuickFee business model
QuickFee’s business model is to provide professional service companies such as accounting and, more recently, law firms a payment gateway solution for their clients.
The company’s payment platform is marketed to these firms, and when a firm adopts the platform, its clients are given the option of paying invoices in full or via monthly instalments using a QuickFee loan.
When a client seeks to pay an invoice, he or she is given the option to secure a loan for the amount of the invoice from QuickFee, with repayment terms extending between three and 12 months.
In Australia, QuickFee’s loans have been used to pay invoices for professional fees, disbursements, out of pocket expenses, counsel charges and similar expenses incurred by family law firms in connection with proceedings.
Australian clients are charged a A$150 establishment fee for the loan and an interest rate between 1.5% and 1.9%.
QuickFee generates revenue by charging monthly hosting levies to the firms that adopt its platform.
The company also receives revenue in the form of credit card processing fees and rapid settlement of EFT transactions in the US.
Additionally, for all loans, QuickFee receives revenue from accrued interest and other associated charges.
Since its 2009 inception in Australia, QuickFee has loaned about A$190 million throughout the country, with lending amounts increasing annually to reach A$40 million in 2018.
QuickFee’s US business was established in 2016, with lending in the region also rising annually to reach US$5.8 million in 2018.
QuickFee plans to use its IPO funds to grow its first mover advantage in the US where there is little or no competition for its services.
In order to shore up its US growth, QuickFee has appointed a further two sales representatives to it team in the country.
IPO funds will also be used to expand the company’s market share in Australia.
By early afternoon trade, QuickFee’s share price was A$0.535 – up 7% on yesterday’s close of A$0.50.