Brad Kelly, Managing Director at Payment Services, has shared his forecast for the coming year.
According to Brad Kelly, 2024 is going to be “a tough year for payment fintechs in Australia with startup corporate and business card issuers likely to fail with little value left.”
He noted that we can expect “consolidation of unprofitable A2A focussed fintechs looking for scale and reduced costs as funding dries up or down rounds at best.”
Big Banks looking for a bargain “may find one.”
Kelly also noted that ANZ is to make a big splash “with their PayTo enterprise product winning IB business away from the other 3.” This could apply pressure “back up the pipe on NPP participants to lift their game.”
Zip Co and Afterpay will “morph into high interest credit card companies and consumer finance businesses as regulation bites and Reserve Bank of Australia signaling surcharging on BNPL transactions.”
According to Kelly, BNPL could become “a feature of a credit card product. Clean out of risky merchants and customers to continue.”
NAB will continue its integration of the Citi cards portfolio which “will give Commonwealth Bank a run for its money. Diners Club International AU looks likely to close.”
Kelly further predicted that the top 3 cards businesses in AU will “be American Express CBA and NAB. AMEX business will continue to grow at double digits.”
He also mentioned that the RBA will “mandate least cost routing on debit transactions giving eftpos Payments Australia a sugar hit. (52% availability currently – 80% target).”
He continued by noting that Regulation, Regulation and did I mention – Regulation? The most significant will be digital wallets such as ApplePay, he predicted.
In a social media post, he also pointed out that Till Payments, which was once valued at $800 Million – reportedly “sold for parts for $40 million but it did manage to get one of the top 10 cap raises in 2023.”
The Till wheels “fell off quickly.” The spin machine was “working over time but it was all too late to save the furniture.” He pointed out that.the company will be “focusing on sustainable growth and fast-tracking profitability.”
That didn’t happen, Kelly noted.
He also shared that this is how it actually played out:
- January – Till fires 40% of staff, shakes up board
- March – Raises $70 Million (Number 9 of the top 10 Cap raises this year)
- August – Material Uncertainty (Losses of $141 Million)
- Burns through $55 million a year to keep the doors open
- November – Sold to Nuvei for parts (around $40 Million-terms unknown)