Potential boost for investors as QuickFee targets the US market
\nQuickFee aims to modernise US accounting firms still using cheques.
\nThe company says profits are just around the corner\u00a0<\/p>\n
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When a company unveils an expansion into the US market, it more often than not sparks enthusiasm among investors.<\/p>\n
The sheer size of the US market presents a fertile ground for substantial revenue growth, which in turn could drive an increase in the company\u2019s share price.<\/p>\n
One ASX-listed company that has made clear its plans to expedite expansion into that lucrative market is the fintech play, Quickfee (ASX: QFE).<\/a><\/strong><\/p>\n Following a recent successful capital raise, QuickFee wants to quickly grow its footprint in the US as it seeks to capitalise on a massive opportunity in the American professional services sector which is still in its early stages of adopting digital payment solutions.<\/p>\n Over half of the 6,155 accounting firms in the US still rely heavily on cheques, which are labour-intensive to process.<\/p>\n QuickFee\u2019s digital payment solutions, including the Pay Now<\/em> and Pay Over Time<\/em>, are designed to modernise those outdated practices.<\/p>\n It may sound ambitious, but QuickFee\u2019s tech platform has the potential to lead, and even revolutionise,\u00a0the whole digital transformation of the professional services payment landscape in the US.<\/p>\n \u201cThe amount of cheques that are still being paid in the US is just phenomenal,\u201d said Dale Smorgon, Quickfee\u2019s non-executive chairman.<\/strong><\/p>\n There\u2019s still a significant amount of cheque writing there, particularly in the professional services sector, which for many Australians seems completely foreign.<\/p>\n \u201cSo this modernisation and digitisation of payments in the US is something that Quickfee can really take advantage of.<\/p>\n \u201cWe\u2019re already serving some 760 odd firms now in the US. We feel that we\u2019ve got a really strong competitive advantage and we believe we can grow that number.\u201d<\/p>\n \u00a0<\/p>\n Quickfee\u2019s business is really about providing payment options and solutions to professional firms, mostly CPAs and lawyers.<\/p>\n With QuickFee Pay Now<\/strong>, firms have a variety of convenient payment options available to them.<\/p>\n \u201cThe Pay Now option allows clients of accounting and law firms to pay their invoices via digital means \u2013 whether that\u2019s via ACH in the US, or EFT as we call it in Australia, or even credit card,\u201d Smorgon told Stockhead.<\/em><\/p>\n It also allows them to pay via financing plans, or recurring ACH plans. These solutions are integrated directly into the major systems that clients are already using, like Xero and MYOB.<\/p>\n Quickfee believes there\u2019s plenty of room for its platform to grow market share in both the US, and here in Australia.<\/p>\n Although Australia\u2019s professional services sector is ahead of the US in payment technology, cheque payments are still common here. This indicates that there\u2019s still progress to be made before we fully transition to digital payments.<\/p>\n \u00a0<\/p>\n Quickfee\u2019s Pay Over Time <\/strong>service offers clients of accounting and law firms the convenience of paying their invoices over a flexible period of 3 to 12 months.<\/p>\n Simultaneously, Quickfee provides upfront cash payments to these firms based on the invoices,\u00a0which helps them manage their cash flow better and stay financially secure.<\/p>\n \u201cOur Pay Over Time product is the real innovation here, as it allows clients or firms to take payment plan options,\u201d explained Smorgon.<\/p>\n \u201cEssentially, we pay our clients the face value of the invoice for the work that they\u2019ve undertaken, but allow their clients to pay overtime.\u201d<\/p>\n QuickFee also offers disbursement funding specifically tailored for legal firms.<\/p>\n This is financing provided to cover the costs associated with legal disbursements \u2013 such as court fees, expert witness fees, and other litigation expenses. It enables legal firms to operate more efficiently by providing timely access to the capital they need to support their cases.<\/p>\n In Australia, QuickFee is already serving around a quarter of the $400 million accounting and legal market, which is roughly 40% of the overall market for \u2018fee funding\u2019.<\/p>\n \u00a0<\/p>\n Tbis funding business essentially operates in a similar way to Buy Now Pay Later (BNPL)<\/strong> services, but with a focus on business-to-business (B2B) transactions and without the same level of risk.<\/p>\n \u201cThe accounting or law firms that we deal with provide us with a full recourse on any payments that are made, or effectively any loans that are advanced, to their customer,\u201d explained Smorgon.<\/p>\n In other words, if the firm\u2019s client fails to repay the instalment provided by QuickFee, the responsibility for repayment falls back on the accounting or law firm.<\/p>\n As an example, imagine you\u2019re a small or medium-sized business and you hire an accounting firm to do some audit or business advisory services for you, and the fee comes to $50,000.<\/p>\n If the accounting firm decides to use QuickFee to allow you to spread out that fee over time, let\u2019s say, nine months, and for some reason you can\u2019t make those payments halfway through the plan, the responsibility to repay QuickFee falls back on the accounting firm.<\/p>\n \u201cThat recourse provides us with a great degree of comfort,\u201d says Smorgon.<\/p>\n \u201cFor a default to happen to Quickfee, it requires both the customer and the firm to both go out of business.<\/p>\n \u201cHistorically, our delinquency rates are at an extremely low 0.1%. Also, delinquency rates within accounting firms are historically much lower than in many other cohorts.\u201d<\/p>\n \u00a0<\/p>\n In the latest trading update for Q3 FY24, Quickfee\u2019s revenue grew by 36% on pcp.<\/p>\n US financing revenue was up 54% on pcp, while Australian financing revenue increased by 50% on pcp.<\/p>\n Importantly, there was a 200% increase in new US firms utilising Quickfee\u2019s Finance facility in Q3 FY24, compared to the pcp.<\/p>\n Based on these results, the company said it was continuing its march towards operating profitability.<\/p>\n \u201cWe are on the cusp of consistent results that we\u2019ve already seen in both in our Aussie US businesses,\u201d said Smorgon.<\/p>\n \u201cWe are very close to profitability after three or four years of actively building the business and investing in the technology, the people, and the infrastructure to set up the business.<\/p>\n \u201cCurrently we\u2019re growing at some 30% on an annual basis, so profitability is just around the corner.<\/p>\n \u201cNow with the additional firepower, we don\u2019t see any reason why we can\u2019t continue to see that grow even more,\u201d said Smorgon.<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n\n \ufeff<\/span><\/span>\u00a0<\/p>\n The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead.<\/em><\/p>\n Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.\u00a0\u00a0<\/em><\/p>\n <\/span><\/p>\n The post Excitement builds as ASX fintech Quickfee eyes US expansion and a bigger fish<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"What Quickfee does<\/h2>\n
But here\u2019s the \u201creal innovation\u201d<\/h2>\n
Like BNPL, but less risk<\/h2>\n
Profit is just \u201caround the corner\u201d<\/h2>\n
Quickfee share price today:<\/h2>\n