New ‘Incubator’ seeks to nurture next generation of Aussie paytechs

Incubator Payments Change Financial

ASX-listed fintech and payments-as-a-service (PaaS) developer Change Financial has announced the launch of a “first of its kind” Australian Payments Incubator program, enabling local paytechs to trial their prepaid card and payment offerings.

The newly launched ‘Incubator’, also backed by Mastercard, promises to remove several major barriers for payments providing fintechs seeking to launch a card program.

The program leverages Change Financial’s Vertexon PaaS platform – which, among a range of capabilities, supports card issuing, transaction processing, and buy now, pay later services.

Through the Incubator, paytechs can launch small quantities of physical and digital prepaid cards, giving their developers a chance to test their payment products and associated commercial models.

Participating paytechs must enter into an agreement with Change establishing terms of operation, as well as a five-year exclusivity contract with Change and Mastercard.

The Incubator, developed in partnership with credit card company Mastercard and Fintech Actuator, a program manager for payments providers, will offer around 20 “well-performing” fintechs that ‘graduate’ through the Incubator the opportunity to launch their own card programs as standalone Change Financial clients.

Change will provide processing and issuing services for the Incubator, while Fintech Actuator will assist with onboarding, scoping and designing participating fintechs’ card and payment programs.

Mastercard, with whom Change has secured a Strategic Alliance Agreement, provides scheme access and funding support to Incubator participants.

Commenting on the launch, Mastercard’s vice president and head of digital partnerships Australia, Dan Martin, said the credit card company’s aim was to “foster an ecosystem that allows fintech startups to thrive, contributing to the overall advancement of the Australian fintech industry”.

He added: “Speed to market, testing and increased agility are paramount in driving innovation and propelling fintechs forwards.”

Change Financial’s chief executive, Tony Sheehan noted that Incubator would reduce the considerable barriers to entry for paytech startups.

“This partnership is one of the first of its kind in Australia and will nurture startups by providing greater access to enabling card programs, which have been previously unattainable.”

“Australia continues to be a popular global fintech hub, and we see many of these new businesses unable to complement their product offering with a card program because they don’t have the capital, expertise or understanding of the process.

“Our partnership with Mastercard and Fintech Actuator will significantly reduce these barriers to entry for startups, creating greater opportunities for local fintechs.”

Applications for the Incubator open “in the coming months”, Change said, with the first cards anticipated to be issued in the second half of 2024.

Established in 2011, Change Financial supports more than 150 clients across 40 countries. The fintech currently manages and processes more than 27 million credit, debit and prepaid cards worldwide.

The Australian Payments Incubator represents Change’s first Australian client.