Strong uptake of BNPL offering accelerates IOUpay (ASX:IOU) growth in first half of Q4

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Strong uptake of BNPL offering accelerates IOUpay (ASX:IOU) growth in first half of Q4

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  • IOUpay has witnessed strong uptake of its BNPL service with a 9.6% income margin for myIOU BNPL transactions in the first half of the December quarter.
  • The pilot group of merchants with RMS is expected to go live by early December.
  • IOU has experienced active merchant acquisitions across industry verticals, driving growth in consumer onboarding and activation.
  • IOU remains optimistic about the completion of its acquisition transaction with IDSB as early as possible.

High-growth ASX-listed fintech IOUpay Limited (ASX:IOU) has been witnessing continued growth across business quarter over quarter with a strong uptake of its BNPL service. Moreover, key developments have taken place for IOU with respect to platform integration as well as acquisition.

IOU has provided a BNPL and operational update for the period from 1 October to 14 November 2021. Considerably, the Company’s flagship BNPL platform, myIOU, was rolled out in June this year. The BNPL business volumes are expected to strengthen further.

A snapshot of the Company’s growth across key metrics is given below:


Let us look at other key events indicating IOU’s progress till mid-November 2021.

RELATED ARTICLE: IOUpay (ASX:IOU) in sweet spot with firm footing in BNPL space

IDSB acquisition transaction

One of the key engagements of IOU has been the acquisition of a non-controlling interest in IDSB. The transaction had been subject to a condition precedent (CP), which was anticipated to be satisfied in November. Moreover, the first tranche payment of 50% of the purchase price was also to be made at this event.

The condition entails third-party consent from one of the banking partners of IDSB for the change of shareholding. The consent is needed in accordance with terms of the respective collaboration agreement between IDSB and the bank partner.


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RELATED ARTICLE: IOUpay (ASX:IOU) on high growth trajectory with myIOU BNPL platform   

IOU sees this as a formality, which has been delayed only as local COVID-19 restrictions continue to impact the ability of the banking partner to organise its planned formal Board meetings.

The Company remains optimistic that the condition precedent would be completed by November end or at the upcoming meeting of the third-party banking partner.

Implementation with RMS

At October end, the IOUpay Merchant Services team concluded the training of RMS internal and sales staff on the myIOU platform subsequent to the successful conclusion of systems integration testing by the RMS Quality Control & Implementation team.  

The Company is currently engaged in preparing a pilot group of merchants, anticipated to go live within the coming three weeks. Furthermore, IOU and RMS would finalise a timetable for activating the complete implementation.

RELATED ARTICLE: High on success of myIOU BNPL service, IOUpay reports solid September quarter

Growth in merchant acquisitions

IOU has been witnessing increased merchant acquisitions as the local Malaysian economy opens up from COVID-19 restrictions.  

The Company has successfully added over 100 merchants, operating across 300 outlets throughout Malaysia to the myIOU platform in the initial half of the ongoing quarter, including new merchants from almost every industry vertical category.

The total number of merchants added in the period exceeded 100. Some of the industry verticals where new merchants were added during the period are highlighted in the image below:

Source: IOU Announcement 23/11/21

Notably, consumer engagement with myIOU has indicated a substantial growth trend over recent weeks due to the expansion of shopping choices as several new merchants have been added throughout industry verticals and physical store locations.

IOU believes that the growth is attributed to the easing of COVID-19 restrictions by the Government as well as the ongoing Digital Marketing Strategy of the Company and numerous promotional campaigns.

RELATED ARTICLE: IOUpay secures Malaysian celebrity Yuna as brand ambassador for myIOU BNPL service  

Growth amid easing COVID-19 restrictions

The Government is slowly reopening the economy in phases and allowing people to travel across regions. Moreover, restrictions concerning interstate and international travel have been lifted for fully vaccinated residents as the essential vaccination limit of 90% of the adult population was achieved.

Seeking this opportunity, IOU has deployed a dedicated Regional Commercial Officer along with the employment of business development operatives and implementation of calling programmes. This has resulted in immediate success for IOU, as evidenced by various merchant relationships established recently.

Bottom Line

While the transaction concerning IDSB remains significant for IOU’s advancement of its BNPL expansion objectives in Malaysia and across the South East Asian region, the reopening of the economy has already favoured the Company’s growth.

RELATED ARTICLE: IOUpay (ASX:IOU) invests $41.3M to acquire 42% stake in Malaysian finance business

All eyes remain on IOU’s progress during the ongoing quarter as the Company is yet to conclude the pivotal acquisition transaction.

IOU’s shares were trading at AU$0.195 midday on 23 November 2021.


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