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Fintech firm BankiFi announces Australia expansion to support SMEs

UK-based technology platform BankiFi has announced its entry into the Australian Financial Services market. BankiFi’s technological platform provides quick payment transfer, allowing small and medium-sized enterprises (SMEs) to avoid typical issues like late payment and other cashflow related woes.

The company offers financial services with an API-based solution to banks and individual businesses. Using the platform, users can submit real-time payment requests via SMS, email, and WhatsApp, as well as QR codes for face-to-face transactions.

Lloyd Parata, Australia and New Zealand’s new country manager said: “A combination of both regulation and advances in technology have lowered the point of entry enabling new entrants such as non-bank platforms like Stripe, Square and Shopify to erode bank revenues.

“For these new entrants, small businesses are the low hanging fruit because they contribute massively to the economy, there are lots of them, and they have been underserviced thus far.

“However, making payments is just a seat at the table. Small business owners now also expect a reduction of the time they spend on manual administration and chasing late payments.”

Cash flow is always a major hurdle for SMEs, regardless of the state of the economy, and it may cause serious problems for companies that fail to pay bills on time.

More recently, ScotPac’s SME Growth Index research found that only 27.5% of the 1,253 businesses polled experienced no cashflow issues in the past 12 months. The result from the study implies that cashflow woes still impact 72.5% or three in four businesses.

Teaming up with traditional banks

SMEs now have a wide selection of financial options to choose from due to regulatory reforms in Australia’s open banking.

Furthermore, rising expectations from single traders and micro-business owners put pressure on banks to step up and provide services that they previously did not.  

“What we’re trying to do is help banks realise that opportunity through things like open banking, APIs, and moving away from cash to digital payments.

“Covid has catalysed this even further because it’s shown that we don’t need cash or checks.

“You can do everything on a card or even on your phone now — you don’t even need a piece of plastic,” Mr Parata said.

For the past 18 months, the firm has been engaging with Australian financial service providers from its UK headquarters.

“Many micro and small businesses suffer tremendously as a result of high transaction fees, delayed or late payments, complex financial admin tasks and cash flow disruption. 

“We’ve found small businesses are like low-hanging fruit because they contribute massively to the economy, there are lots of them, and they have been underserviced thus far,” he added.

Australian fintech landscape

A Fintech Landscape 2020 study conducted by KPMG Australia showed a total of 733 active fintech companies in Australia, up from 629 when the landscape was last released in September 2019.

The Australian big banks’ financial performance for the full financial year 2020 declined, with combined cash profit after tax (PAT) from continuing operations down 36.6 % from FY2019, as per the report.

The study shows that:

  • There was an increase in the number of fintech firms within the lending category supported by new players in both consumer and SME lending sub-sectors, as well as an increase in Buy-Now-Pay-Later (BNPL) providers
  • Growth in blockchain and cryptocurrency-associated fintech matched the general support and interest in the technology asset class across the past year.

There has been a surge in the number of startups operating in the neobank sector, such as Volt.

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