The small-cap ASX share Smartpay Holdings Ltd (ASX: SMP) is a leading idea according to a fund manager.

Smartpay allows merchants to take payments from customers with a "versatile, portable EFTPOS machine".

Recent result

Less than a month ago, the business announced its interim result for the six months to 30 September 2022.

It revealed revenue of $35.4 million, an increase of 68% year over year. Smartpay generated $8.1 million in earnings before interest, tax, depreciation and amortisation (EBITDA), which was a rise of 119%. The company also reported net profit before tax of $2.7 million, an increase of 637%.

The company saw $5.5 million of monthly Australian acquiring revenue at September 2022.

The ASX share made positive operating cash flow of $10.1 million in the period. The operating cash flow is being used to fund the purchase of new terminals, ongoing development of software and reduce bank debt.

The company is working on its Android in-store proposition, which is a "key focus". It is seeing momentum and an acceleration. It's looking forward to a "strong" second half.

Fund manager thoughts on the Smartpay share price

The fund manager of EGP Capital, Tony Hansen, shared some comments about Smartpay in the fund update for November 2022. Hansen said that the Smartpay update in mid-October was "spectacular".

The fund manager commented that "the miracle of operating leverage in a fast-growing, negative working capital business is on display in all of its glory".

He noted that while he would prefer to see every cost line grow slower than revenue, he is happy enough that marketing doubled. Hansen pointed to the "positive outcomes every increase in marketing Smartpay has had over the past few halves has had."

In the prior year, marketing costs increased by 74%, while revenue went up 68% in this latest period.

Hansen remains "very bullish" despite the "sharp increase" of the Smartpay share price.

One reason to like the ASX share is that the stated customer churn was just 1.1%. On the current Australian terminal fleet, that equates to only 12 terminals per month that would need to be replaced to maintain the fleet size.

Hansen suggested that the customer churn is so low that the marketing budget could be "almost completely extinguished and the business would probably hold similar revenue in perpetuity".

ASX share cash flow machine?

Hansen thinks that the business is consistent and could make a lot of money if management wanted it to. He concluded:

It is truly an annuity business, and at the flip of a switch, could be turned into a cash flow monster should management (or an acquirer) choose to do so. We prefer that given they still speak for a low single-digit market share that they continue to grow at the fastest pace prudence enables.

Smartpay share price snapshot

Over the last month, Smartpay shares have risen by around 20%.

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In the chaos of 2022, investors of ASX shares can fall prey to a massive psychological trap.

That's focusing too much on macroeconomic factors such as inflation, interest rates and recessions.

Yes, they matter — but so does the internal performance of the business.

Because there has been so much upheaval in the world making the news feeds this year, this seems to have been forgotten in many people's minds.

That's why it's worth listening to the portfolio managers at Elvest Fund, who recently pointed out two businesses it holds that have shown triple-digit percentage growth.

Regardless of the external factors, such fast-growing enterprises have a great chance of delivering value back to investors.

Tripling its earnings this financial year

RPMGlobal Holdings Ltd (ASX: RUL) provides technology and consulting to the mining industry.

For an ASX technology share, its price has remained relatively resilient. There's been a 24% resurgence since early October, leaving it just 12% lower than where it started the year.

The Elvest analysts told clients that the company is at a crossroads.

"At its AGM, RPMGlobal provided a solid trading update and reiterated FY23 guidance," read the memo.

"RPMGlobal is at an earnings inflection point, reflecting business maturation and growing demand for its mining operations software."

It was one of Elvest Fund's best performers last month, but with a sensational financial year under way, the team will keep riding it all the way home.

"The company is on track to deliver EBITDA of $14.2 million this financial year, up 215%."

While coverage remains sparse for RPMGlobal, CMC Markets reports analysts at both Moelis Australia and Veritas rate the stock as a strong buy.

Forager Funds Management portfolio manager Alex Shevelev last week, without hesitation, named RMPGlobal as the stock he would hold for the next four years.

"Great management team, plenty of skin in the game and it may well be, given all the corporate activity in the space, that the business wouldn't be around in four years in any case."

'Significant lift in free cash flow' next two years

Smartpay Holdings Ltd (ASX: SMP) is a New Zealand company that provides point-of-sale payment terminals.

While the majority of its revenue comes out of its home country, the Australian operations are seeing explosive growth.

"Smartpay provided another strong quarterly trading update, with consolidated revenue up 91% year-on-year, driven by 145% growth within the Australian division," read the Elvest memo.

The Smartpay share price is up almost 8% year to date, after enjoying a 24% rally since mid-October.

The future is looking bright with the ASX share's zero-cost product 'Smartcharge' striking a chord with merchants, according to Elvest analysts.

"The business has healthy momentum heading into the seasonally stronger December quarter," the memo read.

"Continued execution should drive a significant lift in free cash flow over the next two years."

The $200 million business, much like RPMGlobal, is not yet attracting much analyst attention.

But according to CMC Markets, both Blue Ocean Equities and Shaw & Partners are recommending this ASX share as a strong buy.

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The S&P/ASX All Technology Index (ASX: XTX) is up 3.64% so far today, but these three ASX tech shares are soaring far higher.

Megaport Ltd (ASX: MP1), Vection Technologies Ltd (ASX: VR1), and SmartPay Holdings Ltd (ASX: SMP) shares are have all risen by more than 15%.

Let's take a look at why these ASX tech shares are leaping ahead on Wednesday.

Megaport

Megaport shares are up 20% at the time of writing. However, in earlier trade, the company's share price lifted 38%. Investors bid up the company's shares following Megaport reporting an EBITDA profit for the first time. Monthly Recurring Revenue jumped 13% on the previous quarter to $10.7 million. This was underpinned by an increase in multi-cloud connections, strong port sales, a rise in customers, and the company's launch in Mexico. Commenting on the results, CEO Vincent English said:

The underlying Megaport network and business model has strong operating leverage to further increase profit and generate cash as revenue grows.

Vection Technologies

The Vection share price also leapt 20% earlier today despite no news out of the company. At the time of writing, Vection shares are fetching 8.8 cents each, after reaching a high of 9.5 cents a share this morning. It seems the overall strong performance of the technology sector could be boosting the company's shares today. ASX tech shares are rising today following a strong day on the NASDAQ in the US. The technology-heavy index surged 3.1% in America on Tuesday. Other Australian tech shares surging higher include Life360 Inc (ASX: 360), up 5%, and BrainChip Holdings Ltd (ASX: BRN), lifting 13.64%. Vection helps businesses connect to the digital world via 3D technology, virtual reality, augmented reality, and IoT. In FY22, Vection boosted its total contract value to $19 million, according to a release on 30 June. The company is expecting to report revenue of $17 to $19 million for the financial year.

SmartPay Holdings

Finally, SmartPay Holdings shares are nearly 16% higher today. This follows the company providing a quarterly trading update. Australian total transaction value lifted a mammoth 71% year on year, while consolidated revenue leapt 48%. Smartpay said customer acquisition results are essentially back to the levels seen prior to COVID-19. Commenting further on the result, SmartPay said:

Increasing the investment in marketing and sales has resulted in record months for lead generation and has delivered accelerated customer acquisition in the first quarter of FY23 with over 1,200 new transacting terminals added through to the end of June '22.

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The Smartpay Holdings Ltd (ASX: SMP) share price has jumped in afternoon trade after the payment technology company released its trading update for the fourth quarter.

At the time of writing, the Smartpay share price is trading at 92.5 cents a share, an increase of 4.5%.

High growth story continues

It appears the payment solution providers' trading update has fallen roughly in line with shareholder expectations. Despite the continuation of growth metrics, the Smartpay share price has failed to gain momentum.

The company's fourth quarter, ending 31 March, experienced continued growth in Australian acquiring revenues. Smartpay delivered a 97% year-on-year revenue increase to $5.784 million – a further 15% increase on the previous quarter.

Additionally, Smartpay's transacting terminals reached record levels. At the end of March, the company's payment terminals in use reached 6,754 – up from 5,775 from the previous quarter.

Total quarterly revenue for the company came in at NZ$10.05 million on a consolidated basis for both Australia and New Zealand operations. This reflects an increase of 36% year-on-year for the business.

Potentially disappointing shareholders, the company did not indicate growth in its New Zealand operations. Instead, Smartpay stated, "Our New Zealand business provided stable and consistent revenue contribution through the quarter."

Context is important for Smartpay share price

Smartpay is a much smaller peer of ASX-listed Tyro Payments Ltd (ASX: TYR). Comparing the two competitors we can see how Smartpay is stacking up.

Based on current metrics, Tyro is generating roughly 7.1 times more revenue than its smaller contender. However, the company is utilising 10.1 times more transacting terminals than Smartpay to do so, at 68,338.

Adding to this, despite only accruing sevenfold the revenue, Tyro is valued at 9.7 times the market capitalisation of Smartpay. This might explain why the returns from the Smartpay share price have outpaced its bigger competitor over the last year (108% versus 38.6%).

The market might be imposing a discount on the smaller terminal provider, given the heightened risk profile. This risk was displayed during the COVID-19 crash, as the Smartpay share price fell dramatically 64% in one month.

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The Smartpay Holdings Ltd (ASX: SMP) share price is not having a great day today. At the time of writing, Smartpay shares are down 1.14% to 87 cents a share.

On the surface, that move doesn't look great for Smartpay shares. But if we zoom out, the picture gets a whole lot rosier. Smartpay shares are still up almost 30% year to date. They are also up more than 97% over the past 12 months. And with a 52-week range of 28-98 cents per share, Smartpay is definitely still in the upper echelons of this range. 

So what has gone so well for this payments company over the past 3-and-a-half months?

Smartpay share price pays off

Well, there hasn't been too much to talk about with Smartpay in recent months. We haven't had any meaningful announcements of consequence for the company since 12 March. And that was a notice from S&P Global that Smartpay would be joining the S&P/ASX All Technology Index (ASX: XTX), effective 22 March. This does have the potential to be a growth catalyst for the Smartpay share price, seeing as ASX tech shares are an area that is attracting more and more attention these days. The ASX exchange-traded fund (ETF) that tracks the XTX Index – the BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) – is an increasingly popular ETF that now has more than $200 million in net assets. It has also appreciated more than 83% over the past 12 months, which doesn't hurt either.

Remember, part of every dollar that gets invested with this ETF goes into Smartpay shares. So that's certainly a tailwind for the Smartpay share price.

But we could still be seeing the aftershocks of a very well-received quarterly trading update that the company released back in January. As we reported at the time, this trading update saw the Smartpay share price reach its current 52-week (and all-time) high soon after. 

And for good reason. The update told investors that revenues were up 18% quarter-on-quarter and 24% over the prior corresponding quarter to NZ$9.2 million. Perhaps most impressively, Australian revenues grew 35% over the previous quarter's numbers, and 75% against the prior corresponding quarter. 

Those are objectively strong numbers and have almost certainly done the lion's share of the legwork when it comes to the Smartpay shares' 2021 performance thus far. 

Those factors are likely to be behind the Smartpay share price's 28% gain in 2021 so far. At the current share price, Smartpay has a market capitalisation of $204.25 million.

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The Smartpay Holdings Ltd (ASX: SMP) share price is storming higher today following the release of a positive third quarter trading update.

In the first 30 minutes of trade, the payment solutions' share price reached an all-time high of 90.5 cents. However, the Smartpay share price has since retraced to 88 cents, up 7.3%, at the time of writing.

Smartpay is the largest independently owned and operated EFTPOS provider in both Australia and New Zealand. The company develops innovative point-of-sale (POS) systems for more than 25,000 business customers including banks, retailers and merchants.

How did Smartpay perform?

In today's release, Smartpay advised it has booked strong growth over the third quarter of FY21, particularly in its Australian segment.

For the period ending December 31, Smartpay delivered total group revenue of NZ$9.2 million for the third-quarter. This reflected a 24% increase on the prior corresponding period (pcp), and 18% lift quarter-on-quarter.

Most notably for the company was its Australian segment performance which drove the overall higher result. Smartpay recorded $5 million in Australian acquiring revenue in the 3 months, representing a 75% jump on the pcp, and 35% gain over the last quarter.

In comparison, New Zealand climbed just 2% higher through the period against the prior 3 months.

Transacting terminals in Australia stood at 5,775, which grew an additional 1,164 units at the end of the third quarter. The surge was attributed to an uptick in lead generation and customer acquisition activities. Also having some positive impact, was the return of some terminals to transacting status following the COVID-19 disruption.

In addition, transaction volumes across the existing network reported robust trading conditions through the holiday season. Merchant partnerships coupled with higher margin products accounted for 70% of Smartpay's base now using its SmartCharge solution.

About the Smartpay share price

On the back of the sound performance update, the Smartpay share price has reached an all-time high today. Compared to the same time last year, the company's shares have soared more than 72%.

The Smartpay share price reached a 52-week low of 22 cents in March.

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The Smartpay Holdings Ltd (ASX: SMP) share price is falling today after the company announced its half-year results for FY21. During early morning trade, the Smartpay share price fell as low as 55 cents. However, its shares have since recovered to 62 cents, at the time of writing, down 10.14%.

Let's take a look at how Smartpay performed for the first six months of its new financial year.

What's driving the Smartpay share price lower?

The Smartpay share price hasn't fared well today as the company reported a mixed result for the first half of FY21.

For the period ending 30 September, the company achieved record levels of lead generation and sales conversion in its Australian segment. This translated to total group revenue of $14.5 million, an increase of 8% over the prior year.

Most pleasingly for Smartpay is that it saw September as its strongest month in revenue since the COVID-19 pandemic began. In Australia alone, $6.3 million was realised, representing a 67% increase on the the first half of FY19. Based on current calculation, the annualised run-rate return equates to over $19 million thus far. This is double that of the $9.5 million attained for the entire FY20 year.

Earnings before interest, tax, depreciation and amortisation (EBITDA) fell to $3.6 million, reflecting a 6% decline. The drop was attributed to COVID-19 having a $500,000 impact on the business and a significant spend on marketing and sales activities.

Smartpay revealed an after-tax net loss of $9.2 million, mostly comprising a $7.7 million adjustment of its existing convertible notes.

Furthermore, net debt excluding the convertible notes, was mostly paid off through its capital raise conducted in June. In total, net debt stood at $4.8 million, a sizable drop from the $19.4 million recorded at the beginning of April.

Management commentary

Smartpay chair, Mr. Gregor Barclay, and CEO, Mr. Marty Pomeroy, commented on the group's results for the first half of FY21, saying:

We are extremely pleased with the overall performance of the business in the first half of the financial year in what was a very challenging period for our customers and our team.

Both our Australian and New Zealand operations showed strong resilience to the effects of the national lockdowns through the first quarter of the financial year and this was in large part due to the effectiveness of our management team and the agility and adaptability of our people.

Whilst many of our customers experienced a downturn in trading in the first quarter, most have returned to pre COVID-19 levels as trading restrictions have eased across both countries.

FY21 outlook

No guidance was provided for the remainder of the FY21 year, however, management stated it expects to generate record revenue. Despite the disruption COVID-19 has caused the business, it is well capitalised and continues to recover to normal levels.

About the Smartpay share price

The Smartpay share price has performed well over the past 12 months. Shareholders who bought into the company this time last year would be sitting on gains of more than 138%. The Smartpay share price reached an all-time high of 82 cents in February, before the onset of the COVID-19 sell-off. On the other side of the spectrum, the company's shares hit a low of 22 cents in March.

Smartpay has a market capitalisation of around $147 million and a price-to-earnings (P/E) ratio of around 90.

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The Smartpay Holdings Ltd (ASX: SMP) share price has jumped 3.3% to 62 cents following a trading update announced earlier today. At one point, the Smartpay share price hit an intraday high of 63.5 cents after opening at 59 cents. This compares to the All Ordinaries Index (ASX: XAO) which is down 1% today at 6,080 points.

What does Smartpay do?

Smartpay is the largest independently owned and operated EFTPOS provider in both Australia and New Zealand. The company develops innovative point-of-sale (POS) systems for over 25,000 business customers including banks, retailers and merchants.

Business update

Smartpay provided a trading update for the period ending 31 August. The performance in its Australasian business segments are as follows:

Australia

The EFTPOS provider saw Australian lead generation and new customer acquisition at record levels. In Australia, revenue increased 19% for June to July, and 91% year on year. This result was achieved despite the Victorian lockdown in August that caused a 6% decline in July's incoming revenue.

The company warned that while 12% of its transacting terminal base was affected, including 5% by a single merchant category, customer growth has offset this.

Smartpay advised that transactions per terminal (as well as average transaction value) have been maintained above pre-COVID levels, standing at 4,432 with hopes of reaching 5,000 in the coming months.

New Zealand

The company noted that the most recent regional lockdown in Auckland had minimal impact on its trading and operational volumes. Furthermore, Smartpay highlighted its flexible remote working plans as a driver for its New Zealand business.

Outlook

Smartpay said that its recent results lead to a positive outlook, particularly as Victoria emerges from lockdown. This is reflected by strong customer acquisition and solid transaction numbers recorded in Australia.

The company also said it expected to see a boost in trading activity levels for the September quarter and will look towards continuing organic growth.

Smartpay share price summary

The Smartpay share price has been on a rollercoaster ride over the past year. From reaching a 52-week low of 16.5 cents and a 52-week high of 82.5 cents, the Smartpay share price is currently 16.98% up in year-to-date trading. 

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The Smartpay Holdings Ltd (ASX: SMP) share price is up 18% today after the EFTPOS provider released its FY20 results. Smartpay saw a 34% increase in revenue over the year as a result of strong growth in Australia. 

What does Smartpay do? 

Smartpay is the largest independently owned and operated EFTPOS provider in Australasia. Having operating in Australia for nearly 10 years, Smartpay has supplied over 35,000 EFTPOS machines to over 25,000 merchants across Australia and New Zealand. 

Smartpay offers merchants a flat rate for MasterCard, Visa, Alipay, and WeChat pay transactions. Terminal rental fees are waived when merchants process a sufficient value of transactions each month. Merchants are offered a choice of flat rates or automated surcharging so they know charges to expect. 

What did Smartpay report?

Smartpay reported full year revenue of $28.3 million, a 34% increase on FY19. The key driver of revenue growth was strong growth in Australian acquiring revenues, which grew by 275% to $9.5 million. This was a result of a significant increase in the Australian terminal fleet, which grew from 2,200 at the start of the period to more than 4,600 at 31 March 2020. 

Monthly acquiring revenues grew from $0.5 million a month to $1 million a month (pre-COVID). In addition to growth in terminal and transaction numbers, Smartpay also saw a steady increase in gross margin per terminal as it refined its pricing and product mix through the year. 

Earnings before interest tax depreciation and amortisation (EBITDA) grew 15% in FY20 to $7.4 million. The lower EBITDA growth rate compared to revenue represents the investment of additional resources into the Australian business. The company reported a loss after tax of $4.4 million, which was largely attributable to non-cash costs related to the valuation of convertible notes on issue. 

What's next for Smartpay?

Smartpay reports that the cash impacts of COVID-19 have been largely offset thanks to government assistance packages and reductions in its cost base. Transaction volumes have recovered as restrictions have eased and are back to around 95% of pre-COVID levels in Australia. 

The proposed sale of Smartpay's NZ business was terminated as a result of COVID-19, leaving the company without the expected capital inflow. As a result, Smartpay conducted a capital raise last month. Funds will be used to pursue the company's growth strategy and significantly reduce debt. Smartpay is expecting a strong performance in the remaining 3 quarters of the financial year. 

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Smartpay Holdings Ltd (ASX: SMP) shares have stormed out of a trading halt this morning to be up by as much as 14.29% in early trade. The trading halt was put in place on Wednesday, pending the announcement of a capital raising.

Dual-listed on the NZX, Smartpay is a small-cap payments share that has been trading on the ASX since 2013. With a share price of 46 cents at the time of writing, the company's market capitalisation sits at around $80 million.

Smartpay is an independent full-service EFTPOS provider, directly servicing more than 25,000 merchants with around 35,000 EFTPOS terminals across Australia and New Zealand.

What did Smartpay announce?

Before the market opened this morning, Smartpay revealed it has raised $13 million via a placement to institutional, sophisticated, and professional investors.

Unlike many other ASX shares raising capital at meaningful discounts to their last closing price, Smartpay offered no discount to investors. It completed the raising at an issue price of 42 cents, which was in line with its last closing price on Tuesday.

Smartpay also intends to undertake a share purchase plan for retail investors at the same price of 42 cents, with more details to be announced next week.

According to the company, the funds raised will be used to capitalise the business for growth in both the Australian and New Zealand markets, as well as strengthen its balance sheet through debt reduction.

Commenting on the successful raising, managing director Bradley Gerdis, said:

After having proved up the Australian growth opportunity, as evidenced in our strong revenue growth figures recently released to the market for the year ended 31 March 2020, we are now readying the business to resume and accelerate our Australian growth and to pursue opportunities in the NZ market as we come through the COVID period.

Recent headline results

Earlier this week, Smartpay revealed it had seen a steady recovery in merchant transactions over the past 4 weeks – so much so that aggregate transactional revenue had recovered to 75% of pre-COVID-19 levels.

Prior to this, the company released a trading update in April, informing a 40% decline in aggregate transactional revenues as government restrictions affected the trading conditions of many of Smartpay's merchants.

With a financial year ending 31 March, Smartpay recently revealed unaudited full-year FY20 revenue of NZ$28.3 million, up 34% from last year's result of NZ$21.1 million.

The company expects the effects of COVID-19 to further entrench cashless and contactless payments and believes it is well-positioned to benefit from these positive tailwinds.

The post Small-cap ASX payments share jumps 14% on successful capital raise appeared first on The Motley Fool Australia.

What did Smartpay report today?

Smartpay reported strong revenue growth to $7.45 million driven primarily by Australian terminal and acquiring volume growth. Total revenue for the ASX fintech jumped 38% higher compared to the prior corresponding period (pcp) and 11% higher than the prior quarter.

Smartpay provides EFTPOS terminals to businesses to enable them to accept card payments. Smartpay currently services over 25,000 merchants with 35,000 EFTPOS terminals across Australia and New Zealand.

Australian acquiring revenue rocketed by 272% or $2.1 million on pcp and 32% on the previous quarter. Australian acquiring terminal numbers have now grown to 4,148 as at the end of December 2019.

Shares in the ASX fintech group have rocketed higher on the back of the strong growth trajectory evident in today's results. Smartpay said it is on track to achieve its full-year sales forecast of 2,500 terminals in Australia this financial year.

Positively, Australian acquiring margin remains strong and is trending upwards as we head into the final quarter of Smartpay's financial year.

Smartpay also provided an update on its New Zealand business and assets sale. The conditions for the sale include NZ Commerce Commission clearance, Smartpay shareholder approval and the assignment of material contracts.

The application for NZCC clearance has now been lodged with a decision due date of 30 March 2020.

How have the ASX fintech's shares performed recently?

The New Zealand-based ASX fintech company has seen its shares climb higher even before today's announcement. Smartpay shares are up a whopping 264% since the start of November and have become a top ASX growth stock.

Smartpay now boasts a market capitalisation of $123 million and is chasing down fellow payments groups Afterpay Ltd (ASX: APT) and Tyro Payments Ltd (ASX: TYR).

The Smartpay share price is trading at a record high of $0.71 per share after this morning's strong revenue growth report. I'd be keeping a close eye on the ASX fintech in this final quarter of the financial year.

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The SmartPay Holdings Ltd (ASX: SMP) share price exploded late last year following an offer for its New Zealand (NZ) assets for NZ$70 million from Verifone, which is 1 of the 2 key payment service providers in NZ.

SmartPay stated that the proceeds of the NZ asset sale will be used to optimise the Australian business for accelerated growth, settle all banking facilities and provide a cash distribution to shareholders. With its NZ business attracting such a premium valuation and its Australian business now poised for additional funding, could SmartPay be an emerging payments solution to challenge the likes of Tyro Payments Ltd (ASX: TYR) and the big four banks?

A closer look at SmartPay

SmartPay is a payments solution provider with more than 25,000 merchants and a simple pricing method for Mastercard, Visa, Alipay and WeChat pay transactions. The company strives to give small business owners a deal that is better than the bank.

For the 6 months to 30 September 2019, the company generated a revenue of $13.4 million, a 32% increase on the prior period. Its Australian business is building momentum, contributing $3.8 million in revenue or a 530% increase on the prior period. Australia currently has an annualised run rate (as of late November) of over $12 million.

This compares to one of its competitors, Tyro Payments, which has more than 29,000 Australian merchants and processed more than $17.5 billion in transactions in FY19. The figures indicate that Tyro would typically have larger clients, whereas SmartPay is more SME orientated. It is worth noting that SmartPay has a market capitalisation of just $90 million, whereas Tyro's market capitalisation is more than $1.5 billion.

SmartPay's refocus on the Australian business has seen significant growth across all metrics. The business now has over 4,000 terminals, up from 2,200 at March 2019 and is processing more than $1 billion of EFTPOS transactions on an annualised basis. Monthly acquiring revenue has now exceeded $1 million, which is a clear indication that growth is being achieved.

The Australian business is still in its early days – the company aims to build further momentum by optimising a rapidly growing data set, which will allow it to price more accurately and focus on higher margin opportunities.  

Foolish takeaway

SmartPay's Australian business is showing early signs of promise. The sale of its New Zealand business will help the company's balance sheet and refocus its attention and capability on Australia.

Smartpay shares are a higher risk opportunity as the company only has a market capitalisation of $90 million, so it may not be fit for the risk appetites and objectives of all investors. The SmartPay share price has held on to its gains from late last year and is currently trading for 50 cents per share.

The post Can this small-cap challenger disrupt the ASX payments sector? appeared first on The Motley Fool Australia.