Change Financial Owner's Manual (an example)

Introduction

Change Financial Limited (ASX: CCA) is a global fintech company that specialises in providing innovative and scalable payment solutions. The company plays a crucial role in the financial ecosystem, offering essential services to banks, fintechs, and other financial institutions across more than 40 countries. Through its core products, Vertexon and PaySim, Change Financial empowers its clients to deliver secure, efficient, and modern payment services.

Company Overview

Vision and Mission

Change Financial's vision is to revolutionise the payments industry by offering cutting-edge, secure, and accessible financial technology globally. The mission is to provide a comprehensive and reliable platform that enables clients to issue and manage payment solutions with ease, ensuring they remain competitive in a rapidly evolving market.

Key Offerings

1. Vertexon (Payments as a Service)
   • Card Issuing and Management: Vertexon enables clients to issue and manage debit, prepaid, and virtual cards with support for major payment schemes such as Visa, Mastercard, and UnionPay.
   • Transaction Processing: The platform offers secure and efficient processing services, essential for handling high volumes of transactions across different regions.
   • Digital Payments Integration: Vertexon integrates with popular digital wallets like Apple Pay, Google Pay, and Samsung Pay, catering to the growing demand for contactless payments.
   • Fraud Monitoring: Advanced fraud detection and prevention systems protect transactions, ensuring the security and integrity of financial operations.
2. PaySim (Payment Testing)
   • Full Payment Simulation: PaySim allows banks and fintechs to simulate the entire payment lifecycle, ensuring systems meet the reliability and compliance standards required in today’s financial environment.
   • ATM and POS Emulation: This tool is crucial for testing payment terminals and systems, reducing the risk of failures in live environments.

The Competitive Moat

Change Financial has built a significant competitive moat through its comprehensive regulatory compliance, technological innovation, and deep integration with global payment networks. The company’s ability to offer a fully integrated, scalable, and compliant solution across multiple jurisdictions (Australia, New Zealand, and the United States) creates high barriers to entry for competitors.

Key Elements of the Moat:

• Regulatory and Licensing Approvals: Change Financial holds essential licences, including the Australian Financial Services Licence (AFSL) and Mastercard Principal Memberships in key regions, enabling it to issue and manage payment cards legally and efficiently.
• Strategic Partnerships: The long-term partnership with Mastercard strengthens Change Financial’s position as a trusted provider of card issuing services.
• Technology Leadership: The Vertexon platform’s capability to seamlessly integrate with core banking systems and support for digital payment solutions positions Change Financial as a leader in the fintech space.

Customer Base

Who Are the Customers?

Change Financial serves a wide range of clients, including:

• Banks: Both large and small financial institutions use Change’s platforms to issue and manage payment cards, ensuring they can offer competitive and reliable services to their customers.
• Fintechs: Emerging financial technology companies leverage Change’s scalable solutions to quickly enter the market with innovative payment products.
• Corporates: Large corporations use Change’s services to manage employee and customer payment solutions, such as prepaid cards and loyalty programmes.

Why Are These Services Needed?

In a world where digital transactions are becoming the norm, financial institutions require robust, secure, and compliant systems to issue, process, and manage payment solutions. Change Financial’s services are essential for several reasons:

• Security and Compliance: The financial industry is heavily regulated, and compliance is non-negotiable. Change Financial’s platforms ensure that clients meet all regulatory requirements, reducing the risk of penalties and enhancing trust with customers.
• Scalability: As businesses grow, they need systems that can handle increasing transaction volumes without compromising performance. Change Financial’s solutions are designed to scale effortlessly, supporting business growth.
• Speed to Market: Fintechs and banks need to innovate quickly to stay ahead. Change Financial provides the technology infrastructure that allows these organisations to launch new payment products rapidly, ensuring they remain competitive.

Financial Performance

Recent Highlights (FY23)

• Revenue: US$8.7 million, up 4.7% from the previous year.
• EBITDA Loss: Reduced by 49% year-on-year to US$1.3 million, reflecting a more efficient cost structure and stable revenue growth.
• Net Loss: US$2.9 million, a 22.6% improvement from FY22.
• Cash Position: US$5.4 million at the end of FY23.

Strategic Focus

Change Financial has successfully established the foundational infrastructure necessary for expansive commercial operations. This includes acquiring key licences and certifications across major markets such as Australia, New Zealand, and the United States. The company is now focusing on scaling its client base, deepening customer relationships, and enhancing its product offerings to drive future growth.

Governance and Leadership

Board of Directors

• Benjamin Harrison: Chairman
• Ian Leijer: Executive Director
• Harley Dalton: Director

Corporate Governance

Change Financial is committed to maintaining high standards of corporate governance, ensuring transparency, accountability, and ethical business practices. The company adheres strictly to the guidelines set forth by the Australian Securities Exchange (ASX).

Investor Information

Recent Developments

• Client Acquisitions: In FY24, Change Financial secured several new fintech clients, further expanding its presence in the digital payments landscape.
• Financial Outlook: The company aims to achieve positive EBITDA in FY25, supported by a growing client base, increased recurring revenues, and enhanced operational efficiencies.

Dividend Policy

No dividends have been declared in the current or previous financial periods. The company is focusing on reinvesting its earnings to support its growth strategy.

Conclusion

Change Financial Limited is strategically positioned for long-term growth, supported by a strong competitive moat, a diverse and expanding customer base, and essential, innovative services that meet the critical needs of the financial industry. Investors can anticipate continued expansion and innovation as the company capitalises on its strengths and market opportunities in the global payments ecosystem.

Introductory email from CEO

Dear Valued Investors,

I am pleased to present the Owner's Manual for Change Financial Limited (ASX: CCA), a comprehensive guide to our company's strategy, operations, and growth potential.

As a leading global fintech, Change Financial is at the forefront of revolutionising the payments industry. Our commitment to providing secure, scalable, and innovative payment solutions positions us as a critical partner to banks, fintechs, and financial institutions across more than 40 countries. We are dedicated to building a strong competitive moat through strategic partnerships, robust regulatory compliance, and cutting-edge technology that secures our place in the market for the long term.

This Owner's Manual offers an in-depth overview of our core offerings, including the Vertexon and PaySim platforms, which are integral to our clients' ability to deliver fast, secure, and reliable payment services. It also highlights our strategic focus on expanding our customer base, deepening relationships, and enhancing our product suite to drive sustainable growth and long-term shareholder value. Our ongoing efforts to scale our operations and maintain our leadership in the payments space ensure that Change Financial is well-positioned to capitalise on the opportunities ahead.

Thank you for your continued support as we advance Change Financial's mission, leveraging our strengths to navigate the evolving landscape of digital payments and embrace the future of finance.

Sincerely,

Tony Sheehan

Chief Executive Officer

Change Financial Limited

Video script

"Hello, and welcome to all our valued shareholders. I’m Tony Sheehan, CEO of Change Financial Limited, and I’m excited to have you join us as partners on this journey.

At Change Financial, we are committed to transforming the payments industry through our innovative and scalable solutions. Whether you’re new to our company or a long-time investor, I’m pleased to share with you our Owner's Manual – a comprehensive guide that outlines who we are, what we do, and where we’re headed.

In this manual, you’ll find detailed information about our core platforms – Vertexon and PaySim. These are the technologies that drive our success, enabling banks, fintechs, and other financial institutions across the globe to deliver secure, efficient, and reliable payment services.

You’ll also learn about our strategic focus on expanding our customer base, deepening our relationships, and enhancing our product offerings. We’re building a strong competitive moat, with the goal of ensuring sustainable growth and long-term value for our shareholders.

As we continue to scale our operations and lead the way in digital payments, your support is more crucial than ever. Together, we’re not just navigating the future of finance – we’re shaping it.

Thank you for your trust and partnership. I’m looking forward to the exciting opportunities ahead as we continue to drive Change Financial forward."