ZipMoney might become one of the few Aussie fintechs to turn a profit
By partnering with a big bank, ZipMoney eyes profitability by FY2018 and has lowered its interest rates.
ASX-listed fintech zipMoney has put the finishing touches on its A$260 million debt warehouse with big four bank NAB and could become one of the few all-Australian fintechs to make a profit.
The partnership - the first of its kind in Australia - also signals that the big four are starting to view fintechs as friends not enemies.
“Historically, if you were in payments or credit, banks didn't want to have anything to do with you because they perceived you as a competitor…But now, I think they realise they just can’t afford to think that simplistically.”
The money raised will go to the “immediate refinance of $70 million of existing receivables”, ZipMoney told the ASX, resulting in lower interest rates across the board. It will also allow the company to increase volumes and hire more staff.
ZipMoney provides a ‘buy now, pay later’ service, offering shoppers loans between $1000 and $10,000 for up to eight months.
Shoppers can use the loans to buy from ZipMoney’s approved retail partners, which sell anything from kids toys to video games to furniture. Loans are offered at the checkout like a debit card.
Asked how Australian marketplace lending has developed since ZipMoney listed in 2015, Mr Diamond said that Aussie fintech was still struggling with customer acquisition.
“We have never really focused on marketplace lending [because of] challenges around customer acquisition in Australia,” he said.
“This contrasts with the tremendous growth we have seen globally, particularly in the US and UK where the model has been highly successful and disintermediated billions of dollars. Here in Oz, it's more like tens and hundreds of millions, with a long way to go.”
But he remained optimistic about the chances for success.
"There is so much disruption everywhere you look, but there needs to be even more, because the financial system is ripe for reinvention... We are at the beginning of that journey here in Oz. It's a blank canvas we want to draw all over."
Join AltFi for its third annual Alternative Income Forum, exploring closed-ended funds (investment trusts) specialising in generating an income using alternative assets such as specialist finance, P2P lending, direct lending, asset leasing and more. Hear from the leading investors and fund managers in this rapidly growing market.