Annual Report to Shareholders
In 2020 the growth of the business was impacted by the ASX suspension, which caused the Company to lose several suppliers and customers, especially in Australia. Despite this, the Company has continued to grow revenue in 2020, up 21.6%. Pleasingly the Company saw strong revenue growth from transactional banking services as we continue to diversify our revenue streams.
During the year, we were disappointed to lose our Visa membership, after a long negotiation with Visa. The Company remains a principal member of Mastercard, JCB, Diners, Discover, China UnionPay and AMEX licensed as payment capabilities and with Eurosystem central banking facilities, continues to provide deposit taking and IBAN account issuing capabilities, with SEPA transfers live since 2018. Further we continue to build out other Alternative Payment Methods, including SOFORT and POLI in Australia.
2020 also saw the company finalise the development of our flykk e-Money ecosystem. This ecosystem, brings together the Paydentity platform to perform identity verification, with ISXPay performing the payment processing and settlement, and Probanx.com performing the journaling of the settlement deposits from ISXPay, with ISXPay executing outbound SEPA transactions. This is a complex e-Money ecosystem bringing together bank account issuance, payments, and AML/CFT compliance obligations, including remote customer due diligence.
Pleasingly, in September 2020 we were approved as an Authorised Electronic Money Institution (AEMI) by the Financial Conduct Authority (FCA) in the UK, under the Electronic Money Regulations 2011.
Importantly, the AEMI provides the Company with full access and continuity to the key British market post BREXIT, and significantly extends the Group's regulatory authorisations.
The FCA's UK authorisation allows the Company's UK subsidiary to issue, distribute and redeem electronic money, as well as to offer the complete range of payment services available under the Payment Services Regulations 2017.
Unfortunately, with the onset of COVID-19, most regulatory licencing in Australia has been put on hold or delayed.
NSX Investment update
During 2020 the Company made a $6.02million investment in NSX Ltd (ASX:NSX) for 19.22% of the company, which operates NSXA, Australia's second-largest Tier 1 securities market operator. The Group also announced the ClearPay joint investment with NSX. During 2020 I was also appointed as interim Managing Director of NSX Limited, enabling NSX to focus on its technology stack build out. We saw significant progress in 2020, with the NSXA completing its Trade Acceptance Service ("TAS") integration to the ASX Clear system. TAS brings the ability to enter orders into NSXA's trading system via IRESS, resulting in NSXA securities trading now being fully automated from order routing through to clearing and settlement.
NSX also launched its Digital Exchange Sub-register System (DESS), with transactional data being written directly to both CHESS and the NSX's DESS system, managed by ClearPay Pty Ltd ("ClearPay"), our joint investment with the NSX and developed by our subsidiary Probanx Solutions Ltd.
ClearPay intends to apply for a clearing and settlement license ("CS&F") during the course of 2021, including for DESS operations. In the meantime, DESS allows the NSXA to retain control of its trading and transactional data via its own platform and is the first step towards bringing meaningful competition to clearing and settlement services in Australia.
Our Focus for the Upcoming year
In 2020 the Company's growth will be focused in the European Union and the UK, setting up operations in the UK and continuing to focus on growing our European customer base. With several customers already signed up to our new flykk e-Money product, we look forward to a full rollout in 2021 of this exciting new product and revenue stream.
I'm also looking forward to ClearPay delivering Australia's first open DLT based, multilateral, multicurrency Delivery versus Payment (DvP) platform for the NSXA in 2022.
We are hopeful in 2021, that we can quickly resolve the ASIC court action against the Company. We see this as a necessary precursor to the Companies securities being quoted on a premium exchange.
With the delivery of our second year of profit and positive operating cashflows in 2020, we remain optimistic about the Company's 2021 outlook and we look forward to sharing further news and updates as the company develops and builds scale.
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About iSignthis Ltd
iSignthis Ltd (ASX:ISX) (FRA:TA8) is a hybrid monetary financial institution and also a RegTech leader in remote identity verification, payment authentication with deposit taking, transactional banking and payment processing capability. iSignthis provides an end-to-end on-boarding service for merchants, with a unified payment, electronic money and identity service via our Paydentity(TM) and ISXPay(R) solutions.
By converging payments and identity, iSignthis delivers regulatory compliance to an enhanced customer due diligence standard, offering global reach to any of the world's 4.2Bn 'bank verified' card or account holders, that can be remotely on-boarded to meet the Customer Due Diligence requirements of AML regulated merchants in as little as 3 to 5 minutes. Paydentity(TM) has now onboarded and verified more than 1.5m persons to an AML KYC standard.
iSignthis Paydentity(TM) service is the trusted back office solution for regulated entities, allowing merchants to stay ahead of the regulatory curve, and focus on growing their core business. iSignthis' subsidiary, iSignthis eMoney Ltd, trades as ISXPay(R), and is an EEA authorised eMoney Monetary Financial Institution, offering card acquiring in the EEA, and Australia.
ISXPay(R) is a principal member of Mastercard Inc, Diners, Discover, (China) Union Pay International and JCB International, an American Express aggregator, and provides merchants with access to payments via alternative methods including SEPA, Poli Payments, Sofort, PRZ24 and others.
Probanx Solutions Ltd, a wholly owned subsidiary of iSignthis Ltd, provides API based access to CORE Banking solutions, SEPA Core, SEPA Instant and SEPA business scheme, for neobanks, banks, credit unions and emoney institutions, and provides a bridge to the Eurosystem's Central Bank of Lithuania's CENTROLink service.