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Cyber security norms are imposed in order to provide protection to a nation’s data. General Data Protection Regulation (GDPR) of Europe is well ahead of its peers in regard to data protection laws.
In the recent past, Asian countries experienced a higher number of cyberattacks, compared to global peers. Thus, countries like India and Indonesia are enhancing security to address cyber threats.
As countries in Asia-Pacific are not relying on their age-old regulations to respond to cyber threats, they are focusing on enhancing their regulations and are in the process of introducing cybersecurity regulations in line with those in developed nations, primarily in the western countries. Owing to several factors, Asian countries are working towards bringing in stricter regulations, with growing geopolitical tensions and free accessible data to everyone.
Some measures being considered or being implemented such as onerous privacy requirements and restrictive cybersecurity measures are likely to significantly undermine free digital trade in the region, according to the Australian Department of Foreign Affairs and Trade (DFAT).
The statement was made as part of a submission to an inquiry into the fintech and regtech sectors, with the department suggesting the government to ensure that the approach of countries in the region should be in accordance with democracy, freedom, and openness, considering protection to businesses and consumers.
Let us discuss few players from the Australian fintech and regtech sectors.
Zip Co Limited (ASX: Z1P)
A leading player in the digital retail finance and payments industry, Zip Co Limited is engaged in services like digital payment services and point-of-sale credit.
Record Revenue and Transaction Volume in First Half
Z1P announced its half yearly results for the period ended 31 December 2019, highlighting record revenue and transaction volume to $69.6 million and $964.7 million, up 103% and 95% year on year, respectively.
The Company registered record results across all key drivers including customer engagement, transactions, and in-store volume. It generated positive cash EBTDA of $1.5 million (excluding acquisition costs) for the six months to December 2019.
ANZ customer base up 80% to 1.8 million. Moreover, the Company acquired New Zealand-based global buy now pay later technology provider, PartPay Limited and global SME lender Spotcap’s businesses in Australia.
FY20 Outlook: For the full year, the Company is focused on driving growth domestically and expanding globally.
For domestic market, through –
- Customer acquisition / retention
- Onboarding lighthouse brands
For global expansion, through –
- A deliberate lift, shift & scale strategy
Stock Update: The stock of Z1P was trading at $2.740 on 03 March 2020 (AEDT 03:41 PM), with a market capitalisation of $1.11 billion and approx. 390.39 million outstanding shares. The stock has corrected by 24.27% and 17.20% in the last three months and six months, respectively.
Afterpay Limited (ASX: APT)
Through its Afterpay and Pay Now segments, APT caters to customers and merchants with technology-driven payment solutions.
H1FY20 Total Income Up 96%
APT declared its six-month financial highlights, wherein the Company reported total income of $220.3 million, up 96% on pcp terms, aided by accelerated growth in geographies like the US and the UK.
EBITDA (excluding significant items) was recorded at $6.8 million for the half year ended 31 December 2019, down from $13.9 million posted in the prior comparable period.
The Company posted a record number of active customers of 7.3 million, globally. During November 2019 and December 2019, it added more than 22,900 customers on a daily basis. The period was marked by an 86% growth in active global merchants on the Company’s platform, driven by strong growth in all the key markets.
Stock Update: The stock of APT was trading at $34.885 on 03 March 2020 (AEDT 03:42 PM), with a market capitalisation of $8.64 billion and ~264.6 million outstanding shares. The stock has generated positive returns of 4.02% in the last six months.
Tyro Payments Limited (ASX: TYR)
Technology-focused and values-driven company, Tyro Payments Limited (ASX:TYR) is engaged in providing EFTPOS payments solutions and banking products. Recently, the Company announced the appointment of Ms Jairan Amigh for the post of Co-Company Secretary.
Interesting Read: Lens through Tyro’s Growth Story
Transaction Value Crosses $11 Billion in H1FY20
TYR announced its six-month results for the period ended 31 December 2019, posting revenues of $117.289 million, up 28.4% in pcp terms. EBITDA came in at $1.49 million, as compared to an EBITDA loss of $3.026. The business reported net loss of $19.246 million, down from $7.667 million in H1FY19.
Transaction value was recorded at $11.1 billion for the first half of FY20. Number of merchants stood at 32,450, representing growth of 23% from H1FY19, while number of terminals came in at 58,993, witnessed a growth of 26% from the same period a year ago.
The Company reported eCommerce transaction value of $3.1 million in H1FY20 from a zero base. During the period, the business integrated to 11 popular shopping carts and hosted payment pages.
Within the loan business, the business loan originations stood at $37.4 million. The average loan size came in at $31,500, as compared to $33,700 in H1FY19. Within the bank account segment, the business reported 3,127 active accounts and $39.7 million in deposits as on 31st December 2019. Average interest rate stood at 1.1%, up from 0.9% in H1FY19. The business reported average account balance of $12,700, as compared to $12,500 in pcp.
Guidance: For FY20, the Company expects transaction value at ~$22.5 billion while payments revenue and income is estimated at $233.7 million. Number of merchants and number of terminals are expected at 36,000 and 65,000, respectively.
Stock Update: The stock of TYR was trading at $3.8 with a market capitalisation of $1.78 billion on 03 March 2020 (AEDT 03:44 PM). The stock made a 52-week low and high of $3.22 and $4.53, respectively. The stock has generated a YTD return of 2.57%.
Splitit Payments Ltd (ASX: SPT)
Splitit Payments Ltd is a credit card-based instalment solution provider to both businesses and merchants. On 02 March 2020, the Company reported its collaboration with VISA, to cater merchants with instalment payment distribution.
Record Revenue for SPT in FY19
SPT announced its full year results for the 12 months to 31 December 2019, wherein the Company reported record revenue of US$1.65 million, up 108% on FY18, aided by growth in merchant fees.
Active Merchants stood at 720 within Splitit’s platform, depicting a net increase of 97% from FY18. Merchant Sales Volume (MSV) stood at US$88 million, representing a growth of 52% from FY18. Month active shoppers for 12 months stood at 118,783, up 55% from the same period a year ago. The business derived fastest growth from the North American region, where MSV reported growth of 78% on a y-o-y basis.
During the year, the Company made tie ups with several players including iPay88, BlueSnap, EFTPay, GHL, Ally Commerce and Shopify.
Outlook: For FY20, the Company expects instalment solution to grow across new markets along with new strategic partnerships. Going forward, it will also be continuing to explore additional third-party funding arrangements to drive further growth in its merchant funded model.
Stock Update: The stock of SPT was trading at $0.495 with a market capitalisation of $146.42 million on 03 March 2020 (AEDT 03:44 PM). The stock made a 52-week low and high of $0.350 and $2.00, respectively. The stock has generated a negative return of 40.13% and 6.93% in the last three months and six-months, respectively.
