Fintech player IOUpay (ASX:IOU) has inked a deal with iPay88 to expand its distribution footprint in Malaysia.
The company announced today that the two companies have signed a Merchant Referral Agreement (MRA) for a minimum term of one year.
iPay88 is a leading domestic online payments platform in the Malaysian market, where it provides payment gateway services to a large network of banks and merchants.
The MRA will see iPay88 on-board IOUpay’s BNPL solution across its merchant network.
In its announcement, IOU said iPay88 serves a client base of more than 45,000 online merchants and 20,000 in-store merchants in the Malaysian market, with operations across south-east Asia.
The company reported that iPay88 processed over 360 million transactions across its payment gateway in 2020, with a total transaction value of around $10bn.
IOUpay will incur no up-front costs for entering into the agreement. The two companies will commence integration of their platforms this month, with the first round of merchant on-boarding to the IOUpay platform scheduled for April.
“Merchant on-boarding and rollout will initially consist of selected priority merchants for quality control purposes, given the size and scope of iPay88’s merchant network,” IOUpay said.
The distribution deal with iPay88 marks another piece of news flow in what’s been a busy start to the year for the company.
After obtaining a money lending licence for the Malaysian market in January, IOUpay landed a $50 million placement in February priced at 50c per share — a premium of more than 100 per cent to its January trading range.
Following this morning’s announcement, shares in the company rose again, climbing more than 10pc at the opening bell towards 70c.
Commenting on its distribution deal with iPay88, IOUpay CEO Khong Kok Loong said the company hopes to leverage the partnership into a long-term competitive advantage.
“iPay88 are the clear market leader in the online payments industry in Malaysia with a strong presence across South East Asia,” he said.
“We are delighted to be partnering with iPay88 to rollout our BNPL offering to merchants and consumers, and are committed to building a long term strategic relationship.”
First established in 2000, iPay88 built a market-leading footprint across Malaysia over the subsequent 15 years, capitalising on the mass market adoption of online payments.
In 2015, Japanese multinational NTT Data Corp — a Fortune500 company — acquired a 51 per cent stake in the business.
NTT Data accounts for more than 70 per cent of the local online payment market in Japan where it serves more than 200 financial institutions, IOUpay said.
In its core Malyasian market, the company said iPay88 established its advantage by providing the network infrastructure for financial institutions and businesses to process payments quickly and securely.
iPay88’s network certified to meet International Security Standards (PCI DSS Certified Level) which is the “highest standard in the global online payments”, IOU said.
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