iSignthis plans Australian neobank licence in 2019
Payment and identity technology firm iSignthis is on course to get a neobanking licence from the Australian regulator next year.
John Karantzis, iSignthis CEO, says the company is “well progressed” with its Australian authorised deposit-taking (ADI) licence via the Australian Prudential Regulation Authority (APRA) and anticipates licensing in late Q1 2019.
The licence will allow it to bank with the Reserve Bank of Australia (RBA), and place customer funds at the RBA repo window to earn interest.
Money matters of course to get a bank up and running. He says its tier 1 capital requirements have been agreed in principle, and its current balance sheet meets APRA’s initial capital requirements. The new bank will not offer loans or credit.
Along with the neobank ambitions, iSignthis says its tier 1 network in Europe is production live, allowing it to process transactions directly to Visa and Mastercard, without any other banks or settlement partners in between.
It now offers Visa, Mastercard and JCB as a principal licensee in the EEA/EU. Diners, Discover, ChinaUnionpay and AMEX are also licensed, with “technical integrations underway”.
In a dig at the big four banks, Karantzis says once all is in place its payment channel capability will be “not only be more extensive than Australia’s big four banks, but is comparable to card payment channel capability offered by the world’s largest banks”.
iSignthis has been making progress. In its financial results for the full year ending 30 June 2018, revenue in FY18 compared to FY17 was 362% higher – with a revenue in Q4 FY18 of $3.95 million.
In September, it acquired core banking system vendor Probanx Information Systems for €400,000 (€300,000 in cash and €100,000 in shares).
Karantzis said it came at a considerably lower cost than that of developing it in-house or purchasing a system from a vendor.
While in June, it launched its Euro-based, business-to-business (B2B) transactional banking service with paytech start-up Gobbill.
iSignthis will have rivals in the Australian challenger bank space and they can all be found here.