The professional services market in Australia is set to receive a greater range of funding options “in the coming weeks” courtesy of a new partnership between payment and lending company QuickFee (ASX: QFE) and payment solutions provider Splitit Payments (ASX: SPT).
The deal means QuickFee will launch its new interest-free service in the US and Australia to enable the clients of accounting and law firms to pay their fees via a credit card, and then repay their fees over time.
The new product is expected to accelerate QuickFee’s growth as an online payment provider in the rapidly growing Buy Now, Pay Later market which QuickFee has referred to as “advice now, pay later” to reflect the focus on professional services such as legal and accounting.
According to the terms of the deal, Splitit’s technology will be integrated directly to QuickFee’s payments portal, complementing the existing financing offering to clients and firms.
Expand now, earn later
To fund the rollout and upscale as soon as possible, QuickFee said it has launched a placement to raise $15 million, alongside a Share Purchase Plan (SPP) aiming to raise a further $2.5 million.
The funds raised will be used to “substantially scale up” the company’s US-based customer acquisition team, to fund anticipated growth of its receivables book with the Splitit opportunity, and research and development for future product releases.
QuickFee said it expects the tie-up to “significantly expand” the addressable market within these professional services segments. The company processed more than US$300 million in payments last year via its online payment portal for more than 400 accounting and law firms across the US.
In a trading update published last month, QuickFee reported that its Australian lending peaked at $49.3 million in the last financial year, up 17% from the previous year.
Meanwhile, the larger and more lucrative US market generated US$13 million in revenue, up 63% on the year previous.
The results indicated that although the company’s operations were larger in Australia, the US market carries more commercial potential and is likely to serve up a greater proportion of QuickFee’s total revenues over the coming months and years.
Interestingly, the payments provider said US transaction volumes were up “substantially”, increasing 137% to US$305 million as a result of the COVID-19 pandemic, and accelerating a shift to online payments.
“Having already achieved strong acceptance amongst professional services firms with our online payment portal and existing lending solutions, this new interest-free product allows QuickFee to capture a significantly greater share of the professional services market by providing payment plans to clients of smaller firms, by far the largest part of the market, that we would not normally service,” QuickFee chief executive officer Bruce Coombes said.
How it works
QuickFee’s new interest-free service will allow clients to split their outstanding payments into four instalments with Splitit’s technology responsible for reconciling the first instalment and pre-authorising the remaining payments.
QuickFee confirmed that clients will not need to make new applications given that new credit lines are not being offered.
Professional services firms pay QuickFee’s charges, thereby giving their clients access to an online payment plan and making it easier for clients of firms to access essential legal, accounting and financial advice, the company said.
According to QuickFee, the new partnership will enable it to provide payment services to smaller firms that typically fall outside of the company’s existing credit risk framework, thereby increasing its target market by up to 2,500% in the US and 560% in Australia, equating to approximately 650,000 accounting and law firms in the US.
The US legal services market is considered to be “highly transactional” with QuickFee expecting its new Splitit-powered service to allow legal firms to expand clientele and charge for more advice to existing clients, all while removing payment collection risk.
“QuickFee has a first-mover advantage in the US and Australian professional services market, and we are delighted to partner with them to help people pay their professional services invoices conveniently over time,” Splitit chief executive officer Brad Paterson said.
“We are increasingly seeing that people are open to new and responsible ways to pay for products and services that they need right now, so it’s a great time to be expanding into this new vertical,” he added.