International payments company OFX has managed to compensate for another drop in customer registrations and active customer numbers with an increase in transaction numbers, during the year to March.
OFX released its 2019/20 results yesterday, reporting a net profit of $20.3 million – an increase of 19 per cent over the previous year. Net operating income was up 5 per cent to $125 million.
The company has operations in North America, Europe and Asia, while all grew earnings. The Australian and New Zealand operations account for 55 per cent of profit.
Most of the company’s operational metrics were weaker. New customer registrations fell 13 per cent to 122,100 and the number of active customers fell 2 per cent to 152,700. The average transaction value fell 1.9 per cent to $22,000.
However, the volume of transactions grew 6 per cent, boosting turnover by 4 per cent to $24.7 billion.
The company has commented previously that there have been a number of new entrants in the market, attracting customers by offering cheap deals. OFX has been determined to maintain its margin and has focused on growth in corporate clients, where it sees a more stable customer base with higher transaction volumes.
Last year the company signed an exclusive arrangement to provide international payments services to the share registry operator Link Market Services. That business is now up and running and Link Australia is onboarding registrations.
The Link deal was OFX’s first enterprise partnership in five years and the company is keen to do more.
One new development is the increase is bad and doubtful debts. Once a minor cost of doing business, the bad debt charge grew three-fold to $3.3 million.
OFX said the higher loss rates were mostly in North America and were due to “market payment processes”. In response, it has beefed up its fraud controls and now claims a fraud detection rate of 99.3 per cent.
Commenting on the outlook, OFX chief executive Skander Malcolm said the company is well placed to benefit from growing turnover in cross-border ecommerce.
The main impact of COVID-19 on the business was an increase in trading activity prompted by currency market volatility. Net operating income was up 16.3 per cent in the March quarter.