Catalyst for Change

The rising tide in payments is driving growth at Change Financial.

The shifting sands in banking and payments are moving quicker than at any time in the past driving a big opportunity for an emerging ASX fintech leader that has so far kept a low-profile.

The ongoing diversion in trade from in-person to digital channels has surged since the start of 2020.

That has rewarded financial service providers with the ability to serve a client base transacting remotely with merchants or customers located anywhere in the world.

At the same time, the competitive pressures from disruptions in banking have also seen the wave of new entrants and offerings accelerate.

Neo banks, specialist online-only lenders, and buy now, pay later (BNPL) providers are taking advantage of the reduced barriers to entry and rise in eCommerce.

But while consumer-facing fintechs continue to capture attention thanks to their visibility, the business-to-business payments service providers behind them are witnessing a period of unprecedented growth.

Known as banking and payments platforms, these businesses enable access to the capital-intensive infrastructure new entrants need to trade.

This includes functions such as customer on-boarding and know-your-client vetting, as well as the Application Programming Interfaces (API) essential to the sophisticated interconnectivity inherent to financial services.

And while rules vary between jurisdictions, these platforms also provide new entrants with access to the licences, networks and legacy systems of banks. For example, a new brand or fintech built on the technology of a platform provider could launch a product using the deposit-taking license of an established institution.

The massive global payments market continues to attract new entrants who are turning to platform providers for access to technology, network and compliance infrastructure.

It is in this market that Change Financial (ASX:CCA) has built global presence. CCA is one of the only banking and payments platform focused companies on the ASX and boasts a blue-chip client base that includes the major banks and brands globally.

CCA’s payments and card issuing platform currently manages and processes more than 16 million credit, debit and prepaid cards worldwide. Change has more than 125 customers across 36 countries utilising its technology and solutions.

Among the services available on its platform is a BNPL feature, which gives CCA’s customers the ability to offer an instalment payment option under their own brand.

One of the CCA customers using the feature is BDO Unibank, the largest bank in the Philippines, but Change has said it is currently exploring opportunities with multiple other banks and institutions.

With the global tailwinds driving the payments market, CCA is pursuing an ambitious growth plan. The company has been focused on integrating assets acquired from Wirecard’s TransTasman business, which were put on the market after the collapse of the group’s German parent last year.

The deal saw CCA pick up the collection of Wirecard’s regional operations for just NZ$6.8 million, with the majority of customer contracts already confirmed as continuing with CCA.

The integration has delivered a competitive suite of features for CCA’s platform, forming a strong foundation for the company to start posting revenue and customer growth milestones that start to grab headlines.