Financial Technology companies or Fintech companies are those companies which use new technologies for improving as well as automating the delivery and use of financial services. Fintech is also referred to as the application of technology across all the functions of financial services.
In this piece of article, we would be covering two financial technology companies and discussing their recent updates.
Afterpay Touch Group Limited
About the Company:
Afterpay Touch Group Limited (ASX: APT) is a technology-driven payment company, which focuses on making the buying experience of its global client base great. At present, the company has ~ 3.5mn active users along with 25k+ active retail merchants.
On 1 July 2019, Afterpay Touch Group Limited responded to the query raised by ASX on 28 June 2019, regarding the change in the price of shares of APT from as high as $ 28.77 to a low of $ 23.95 on that particular date. Also, ASX noted that there was a significant increase in the volume of shares traded on that day, especially in the last 45 minutes of the trading.
As per the first question, ASX wanted to know if APT was aware of any information which has not been announced to the market, or few in the market know it. Responding to the question, the company stated that it is not aware of any such information.
Since the response to the first question was a ‘no’, ASX wanted APT to throw some light on the recent trading in its securities. In response, the company referred to an article from the Australian Financial Review by Sarah Thompson and Anthony Macdonald and suggested that it might be the reason for the recent impact in the trading in APT securities. As per the AFR article, investors have responded to a Visa Card statement that it would pilot a ‘suite of Visa’s instalment solutions’ under which the users would get the option to pay for transactions through instalments by means of a Visa card. However, the company was not able to confirm whether this was the actual reason influencing the recent trading in APT securities. There are several other factors that might have influenced the intraday price and trading volume of securities on that particular day. APT also highlighted that other ASX listed companies from the same industry had seen similar movements in their share price over the same period of time.
The next question raised by ASX to APT was whether the company is in compliance with the Listing Rules or not, specifically Listing Rule 3.1. In response, the company stated that it is in compliance with the Listing Rules, in particular, Listing Rule 3.1.
At last, ASX wanted to confirm whether responses provided by the company have been authorised and approved as per its disclosure policy or by its board or an officer of APT with delegated authority from the board to respond to ASX on disclosure matters. APT confirmed that the responses were authorised as per the continuous disclosure policy of the company as well as approved by the Continuous Disclosure Committee of the company.
The shares of APT have given an excellent YTD return of 103.33%. APT is trading at A$25.950, up by 6.352% (as at AEST: 12:10 PM, 02 July 2019) as compared to its previous closing price. Afterpay holds a market capitalization of A$ 6.16 billion and has approximately 252.64 million outstanding shares.
Splitit Payments Ltd
About the Company:
Splitit Payments Ltd (ASX: SPT) is another company from the same domain. It operates as an open banking payment platform. The company provides solutions in four ways:
- Monthly Instalment Payments: In this solution, the user can split the purchases into up to thirty-six interest-free monthly payments through the existing Visa or Mastercard.
- Get Now, Pay Later: Under this offering, the shoppers can try any item for a period of maximum 90 days, after which they can decide whether they would like to continue with that item or not. In case they decide to continue with the product, they could either make a full payment, or begin an instalment-payment plan.
- Multi-Card Payments: Those customers who have insufficient balance in one of their cards, have a choice to divide their instalment payments on two different credit cards, as a result enabling them to get what they desire. Moreover, they are not required to apply for another credit card or go into debt.
- Debit-Card Instalment Payments: Shopper who makes purchases worth $ 400 or less than $ 400 can divide the amount into up to three interest-free monthly payments via the existing debit cards.
On 1 July 2019, Splitit Payments Ltd announced that it has entered into an agreement with Kogan.com (ASX: KGN), which is a portfolio of e-commerce businesses. Under the agreement, SPT will provide its instalment payment solution to make online purchases in Australia using the website of Kogan.com.
Kogan.com comprises of a group of retail as well as services businesses which include Kogan Retail, Kogan Mobile, Kogan Money, among others. It is the top consumer brand in the country, which is known for price leadership through digital proficiency. Kogan.com has more than 1.5mn active clients.
The new relationship of the company with Kogan is aligned with the strategic vision of the company and is aimed at providing the customers with a smooth way of making payments for purchases in interest and fee-free monthly instalments via their credit cards. Also, the customers receive instant approval, and there is no requirement of credit checks, applications or registrations.
Gil Don, the CEO and Co-Founder of SPT, stated that the partnership of the company with the major retailer in Australia indicates the growth of the company in the APAC region. He also noted that the company is experiencing a strong interest from major retailers worldwide for its unique payment solution, which is likely to go live in the coming days.
Recently, on 24 June 2019, the company announced that it completed the issue and allotment of the new fully paid ordinary shares under the share purchase plan (SPP). Around 377,500 new shares were issued at $ 0.80 to the share purchase plan participants, raising $ 302,000.
The total funds generated through both share purchase plan as well as placement, which was completed on 24 May 2019, stood at nearly $ 30.3 million. With these funds, the company would be able to improve its potential to meet the existing surplus demand for its products and pursue its growth strategy at a rate faster than expected in its Initial Public Offering prospectus. Moreover, it would allow the company to capitalize on existing as well as new opportunities as they come.
The shares of SPT have generated a return of -16.90% in last one month and -53.36% in the last three months. SPT is trading at A$ 0.540, down by 8.475% as compared to its previous closing price. SPT holds a market capitalization of A$ 181.44 million and has approximately 307.53 million outstanding shares.
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