Novatti Group (ASX:NOV) discusses stablecoin and blockchain technology

Interviews

by Melissa Darmawan

Novatti Group Limited (ASX:NOV) CEO and Managing Director Peter Cook discusses innovations in the payment space, strategy and outlook.

Melissa Darmawan: Thanks for tuning in to Finance News. I'm Melissa Darmawan. Here to talk to us about Novatti Group (ASX:NOV) is CEO Peter Cook. Peter, nice to see you in the Sydney office.

Peter Cook: Fin News Network. Hello.

Melissa Darmawan: Hi. It's great to have you back. First up, Novatti prides itself as being an innovator in the payment space. Can you give us an update on some of the innovation that is taking place?

Peter Cook: So, sector’s going through massive change, and with COVID, we've seen an acceleration of the conversion of cash payments to cashless, and whether we're tapping and going, or paying online, sending money across border, we're getting these increasing number of transactions that are digital, and Novatti is exposed to more and more of those transactions as we build our business.

In a real innovation sense at the moment, we're looking at a number of blockchain services, and we're exposing ourselves with technologies to be able to facilitate further blockchain and digital transactions, where we continue to sit in the space of B2B infrastructure. So, I think that consumers and businesses need to be able to access all of these payment types, and really, what we want to do is enable our businesses to simply pay and be paid faster, better, quicker, cheaper, and to access all of the new tools.

Melissa Darmawan: On that note, can you dive in a little bit more as to how Novatti's going to actually play a role in that?

Peter Cook: So, if I talk about stablecoin, a stablecoin is a digital asset that is backed by a traditional fiat currency. So, as an example, if you've got a AU$100 stablecoins, there should be $100 sitting in a bank account that absolutely backs that up. We see lots of uses in remittances, in settling of transactions for cross-border payments, such as for exporters and importers, for on-boarding and off-boarding, for purchases of cryptocurrencies, and use cases that are yet to be seen. So, Novatti will become an issuer of stablecoins. We're working on a significant strategy where we will have what's called a multi-chain stablecoin solution, and in part, that may be deployed as stablecoin as a service for other fintechs and banks. And otherwise, we will deploy stablecoin services directly for our customers.

Melissa Darmawan: Wow. A lot has changed in the last 12 months. So, can you just bring this back to the strategy of Novatti?

Peter Cook: The strategy and the goals that we announced to our shareholders and investors in the July, August timeframe, we said we want to grow revenue very strongly. We had done a major fundraising, and we'd bought the stake in Reckon. And we wanted to work with Reckon on bringing payments to their customers. We wanted to increase our markets in terms of either geographic spread or M&A, or new partnerships. We wanted to bring through the acquiring licences with Visa and MasterCard, and we wanted to bring through the bank license.

So, if I look at it today, we did an acquisition of ATX, which is A, an acquisition, and B, it's given us significant footprint in Malaysia and a jumping-off place for Southeast Asia. We got the acquiring licences with Visa and MasterCard. Our revenues have been growing, really, 50 per cent year on year. If you call it a miss, we are still working with APRA on the bank licence, and so, we are still hopefully close to that. And then, in terms of moving into digital assets, and stablecoin services, and even our patent crypto for acquiring, and even a customer of ours, Cryptospend, that's issuing cards, really they're extensions of our service. It's showing that we're still innovative, but really it's all about continuing to drive our ecosystem, and, of course, top-line growth and getting us towards that scale point where we get to cashflow positive and EBITDA positive.

Melissa Darmawan: So, I know that the bank licence has been going on for some time.

Peter Cook: Yes.

Melissa Darmawan: Can you give us any insights as to where it's at, why it's where it's at, and just some more colour on that?

Peter Cook: The bank licence, the regulator is APRA. Getting a bank licence is far from a trivial exercise. We have been at it for a long time, and there was the one-year hiatus with COVID. We continue to work closely with APRA and hope to be able to bring the bank licence through shortly.

Melissa Darmawan: Finally, Peter, what can we look forward to in the months ahead for Novatti?

Peter Cook: In a reporting sense, hopefully our investors will see this continuation of growth, and they'll see that the growth is across multiple segments. So, we do have multiple revenue streams. We see ourselves as a multi-services payment service provider, and we are getting growth in all of our business units. And so, really, investors should start to look at are the unit economics, are we able to scale the business profitably over time? And hopefully, as we report more and more financially over the next few months, investors will see that we are really driving the scale economics out of the business.

Melissa Darmawan: Peter, it's been an exciting 12 months, and I love how you're embracing blockchain technology and linking it to your strategy. I look forward to speaking to you again.

Peter Cook: Melissa, thank you.


Ends

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